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Q&A: Workers Compensation

What happens if a church fails to obtain workers comp insurance?

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.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations." Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

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Posted:
  • August 24, 2010

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