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New York NonProfits and Worker's Compensation Insurance Requirement

See the New York State Workers' Compensation Board here for more info.

Nonprofit Organizations

Individuals that volunteer their services for not-for-profits are generally not eligible for workers' compensation benefits. Accordingly, a not-for-profit entity that is not compensating individuals for their services is not required to obtain a workers' compensation insurance policy. Please note that compensation includes stipends, room and board, and other "perks" that have monetary value. Money used solely to offset expenses incurred while performing activities for the nonprofit are not counted as stipends.

Not-for-profits that are compensating individuals for their services are required to obtain a workers' compensation insurance policy with the following exceptions:

  • Paid clergy and members of religious orders are exempt from mandatory coverage (but can be covered voluntarily). To be exempt the clergy and members of religious orders must be performing only religious duties.
  • Members of supervised amateur athletic activities operated on a nonprofit basis, provided that such members are not otherwise engaged or employed by any person, firm, or corporation participating in such athletic activity.
  • Paid individuals engaged in a teaching capacity in or for a religious, charitable or educational institution (Section 501(c)(3) under the IRS tax code) are also exempt from mandatory coverage (but can also be covered voluntarily). To be exempt, the teachers must only be performing teaching duties.
  • Paid individuals engaged in a non-manual capacity in or for a religious, charitable or educational institution (Section 501(c)(3) under the IRS tax code) are also exempt from mandatory coverage (but can also be covered voluntarily). [Manual labor includes but is not limited to such tasks as filing; carrying materials such as pamphlets, binders, or books; cleaning such as dusting or vacuuming; playing musical instruments; moving furniture; shoveling snow; mowing lawns; and construction of any sort.]
  • Persons receiving charitable aid from a religious or charitable institution (Section 501(c)(3) under the IRS tax code) who perform work in return for such aid and who are not under any express contract of hire, and certain persons receiving rehabilitation services in a sheltered workshop.

Nonprofit Executive Officer Exclusions

A not-for-profit entity that is not compensating individuals (including executive officers) for their services is not required to obtain a workers' compensation insurance policy. Please note that compensation includes stipends, room and board, and other "perks" that have monetary value. Money used solely to offset expenses incurred while performing activities for the nonprofit are not counted as stipends.

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If a nonprofit has a workers' compensation insurance policy, its uncompensated executive officers of that not-for-profit corporation or unincorporated association are exempt, as long as that nonprofit corporation or association has elected to exclude those individuals from coverage (Form C-105.52).

Compensated executive officers of a not-for-profit corporation or unincorporated association are exempt, as long as the organization is classified as religious, charitable or educational (Section 501(c)(3) under the IRS tax code) and the executive officers perform no manual labor.

[Manual labor includes but is not limited to such tasks as filing; carrying materials such as pamphlets, binders, or books; cleaning such as dusting or vacuuming; playing musical instruments; moving furniture; shoveling snow; mowing lawns; and construction of any sort.]

All compensated executive officers of a not-for-profit corporation or unincorporated association that is not classified as religious, charitable or educational (Section 501(c)(3) under the IRS tax code) must be covered by a workers' compensation insurance policy.