If a church is not exempt from workers compensation law, what is the effect of its failure to obtain workers compensation insurance?
Most workers compensation laws are compulsory. The employer has no prerogative to remain outside the system. In a "compulsory" jurisdiction, a covered employer that fails to obtain workers compensation insurance will ordinarily be subject to a direct action by an injured employee, or may be treated as a "self-insurer" and accordingly be liable for the damages prescribed by the workers compensation law. A few states permit employers to elect coverage under workers compensation law. To coerce employers into electing coverage, these states impose various legal disabilities upon employers that do not elect coverage.
For more information on labor laws, see the downloadable training resource, Understanding Labor Laws.