Arkansas treats nonprofits differently from most employers. The state Workers' Compensation Commission says the Act does not apply to employment by nonprofit religious, charitable, or relief organizations, so many Arkansas nonprofits are outside the mandate no matter how many people they employ. That is the opposite of the usual rule, where a nonprofit follows the same size trigger as any business. But being outside the mandate is not all upside: it means an injured staff member is not covered by comp either.
Who this is for: Arkansas nonprofits, from a small volunteer-run group to a staffed community organization, deciding whether they need a policy for their team.
The short version
- Religious, charitable, and relief nonprofits are excluded. Arkansas does not apply the workers comp Act to their employment, so the state does not require coverage.
- The exclusion is about the kind of organization. Confirm your group fits, because not every nonprofit purpose is treated the same, and the Commission decides close cases.
- No mandate also means no comp for injuries. If a staff member is hurt, there is no workers comp claim unless you bought a voluntary policy.
- Grants and contracts often require it anyway. Funders, government contracts, and landlords frequently demand proof of coverage below any state rule.
- You can buy voluntarily. A nonprofit that wants to protect its staff can carry a policy even though the state does not require one.
How the exclusion plays out
| Situation | State requires coverage? | Notes |
|---|---|---|
| Religious, charitable, or relief nonprofit with paid staff | Generally no | Employment is excluded from the Act |
| Staff member hurt at an excluded nonprofit | Not covered by comp | No claim unless a voluntary policy is in place |
| Grant or contract requires proof | By contract, not state law | A voluntary policy answers it |
| Volunteers who do physical work | Not covered by comp | Check whether general liability protects them |
| Unsure your nonprofit fits the exclusion | Confirm with the Commission | Purpose and structure decide it |
The trade-off with the exclusion
Being outside the Act sounds like a saving, and it can be. But it removes the safety net too. If a staff member or volunteer is injured doing your work, there is no workers comp to pay the medical bills or lost wages, and a serious injury can drain a small operating budget or lead to a lawsuit that comp would normally head off. Because federal tax-exempt status, such as being a 501(c)(3), is not the test, and because the Commission decides whether a specific group is a religious, charitable, or relief organization, confirm your status with the Arkansas Workers' Compensation Commission rather than assuming you are excluded.
Why nonprofits buy it anyway
Plenty of Arkansas nonprofits carry workers comp even when the state does not require it. Grant agreements, government contracts, and landlords frequently require proof of coverage, and a single staff injury without it can be costly. Volunteers are the other reason: if volunteers lift, load, or drive, a policy can be arranged to protect them where comp otherwise would not. If a funder is asking for proof, see how to get a policy in Arkansas, and our national explainer on what workers comp does not cover.
A North Little Rock example
Illustrative, not a quote. A North Little Rock food-bank nonprofit has three paid staff and a rotating group of volunteers. As a relief organization it is outside the state mandate, so Arkansas does not require a policy, but a county grant requires proof of workers comp, so the group buys one voluntarily. The board also asks us about the volunteers who lift and load, and we walk through how to protect them since the state Act would not. See the trade detail on our workers comp for nonprofits page.
Real questions Arkansas owners ask
Does an Arkansas nonprofit need workers comp?
Often not. Arkansas does not apply its workers comp Act to employment by nonprofit religious, charitable, or relief organizations, so many nonprofits are outside the state mandate. Confirm your group fits the exclusion with the Commission.
Are our staff covered if the nonprofit is excluded?
No, not by workers comp, unless you bought a voluntary policy. Being outside the mandate means the state does not require coverage, but it also means an injured staff member has no comp claim to fall back on.
Does being a 501(c)(3) decide it?
No. Federal tax-exempt status is not the test in Arkansas. What matters is whether the organization is a religious, charitable, or relief group, and the Commission decides close cases, so confirm your status with them.
Do volunteers count or get covered?
At an excluded nonprofit there is no comp coverage for volunteers or staff unless you buy a policy. If volunteers do physical work, ask us how to protect them, because your general liability policy may not treat them as fully covered.
A grant requires proof of coverage. Can we buy a policy?
Yes. You can carry workers comp voluntarily even though the state does not require it. This is common for Arkansas nonprofits, because grants, government contracts, and landlords often require proof of coverage.
Should we buy coverage even though we are exempt?
Many nonprofits do. A voluntary policy protects paid staff and, if arranged, volunteers, and it satisfies funders and landlords. Without it, a serious injury can drain a small budget or turn into a lawsuit.
Who can tell us whether we are excluded?
The Arkansas Workers' Compensation Commission. Because the exclusion turns on the nature of your organization, they are the right place to confirm whether your specific nonprofit falls inside or outside the Act.
Why Arkansas owners choose Morrow
- We shop the right market for you. In Arkansas you buy workers comp on the open market from any private insurer licensed in the state, because Arkansas has no state fund, and if no carrier will take you the assigned risk plan run by the rating organization NCCI, the Arkansas Workers' Compensation Insurance Plan, is the guaranteed backstop, so we can shop your rate freely and still cover hard-to-place work.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related Arkansas guides
Every Arkansas business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in Arkansas (start here)
- Workers comp: the owner's overview
- I own an LLC: do I need workers comp?
- I'm a sole proprietor: do I need workers comp?
- I own a corporation (C-corp or S-corp): do I need it?
- We're a partnership: do we need workers comp?
- My workers are 1099: do I still need it?
- Only part-time or seasonal staff: do I need it?
- I only employ family: do I need workers comp?
- Remote or out-of-state staff: do I need coverage?
- What happens if I don't carry workers comp?
- How much does workers comp cost?
- How do I get workers comp (even if turned down)?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- Hiring your first employee: what changes
- What workers comp does not cover
- Arkansas nonprofit workers comp
This guide is general information, not legal advice. Arkansas rules and penalty amounts can change, so verify current requirements with Arkansas Workers' Compensation Commission or a licensed advisor before you rely on them. Last updated: July 2026.