Do Churches Need To Carry Workers’ Compensation Insurance?

Do Churches Need To Carry Workers’ Compensation Insurance?
By Mary Walsh | 10/23/2023 | 8 min read

Churches often inquire about workers' compensation coverage, and we understand that the matter can be complex. The reason being is that guidelines differ from state to state, and insurance prerequisites for religious institutions are not identical to those of commercial employers in some restricted instances. 

Do Churches Need Workers Comp?

In general, churches do need workers' compensation insurance for at least some of their employees. It really does vary widely from state to state. In California, for example, the rules are very strict. Churches there must provide workers comp to every employee of the church and even to some people who are not employees of the church, such as volunteers and church elders.

In New York, churches are only required to provide workers compensation for employees who do manual labor. This includes lifting or carrying things, shoveling snow, lawn mowing, or other tasks. Under those guidelines, churches don't have to pay worker's compensation for clergy, teachers, or unpaid volunteers, so long as their positions do not require any manual labor.

The rules vary widely based on the state jurisdiction where a church is based. As a good rule of thumb, if an employee has a W-2, it is a good idea to have workers' compensation insurance for them. The legal liability for not having the proper insurance can be considerable if that person gets sick or injured on the job.

An important thing to keep in mind is that if a church does not carry workers comp, a court could hold it liable to pay for every aspect of an employee's on-the-job injury.

Protection Against Employer Liability

Medical insurance covers hospital expenses for sick or injured employees, but not ongoing care, lost wages, or other losses from workplace injuries. Workers' compensation provides recourse to injured employees and gives employers peace of mind. It also offers cash benefits for temporary or permanent disability. It also provides a lump sum payment for certain types of permanent injuries and can help workers' families in the event of death.

Workers compensation streamlines the payment of benefits in the event of a workplace injury. An employee can simply file a claim with their state's workers comp system to begin quickly receiving benefits. It also provides a fair adjudication process for both parties in the event of an injury.

Peace of Mind for Both Parties

It's worth noting that most health insurance companies don't cover workplace accidents, nor do they provide compensation for wages lost while an employee is recovering from an injury. However, churches can take advantage of workers' compensation, which offers swift payment of benefits and ensures that their employees are well taken care of without the church having to bear the financial burden. Additionally, workers' comp protects churches from lawsuits in the event of an on-the-job injury.

Even if workers' compensation is not required for every employee in your state, carrying it can still be a good idea. Having it provides peace of mind for the church as an employer, and most workers consider it a required benefit that protects them in the event of an injury.

Payroll and HR for Churches

Looking for streamlined HR solutions tailored for religious institutions? We offer customized solutions for payroll, workers' compensation, and other benefits for religious institutions. We know the "ins and outs" when it comes to staying current and compliant with state laws. Contact us today for a consultation.

DISCLAIMER: The information provided herein does not constitute the provision of legal advice, tax advice, accounting services or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional legal, tax, accounting, or other professional advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation and for your particular state(s) of operation.