We're a Colorado Nonprofit: Need Comp?

Colorado does not exempt nonprofits from workers compensation. A 501(c)(3) is treated like any other employer and must carry coverage once it has even one paid employee (C.R.S. 8-44-101). Unpaid volunteers are generally not employees, so they usually do not trigger the duty, but paid staff do.

Who this is for: Colorado nonprofit leaders and board members, from an all-volunteer group thinking about its first paid hire to an established charity with staff.

The short version

No nonprofit exemption. Colorado applies the same first-employee rule to charities that it applies to businesses.
Paid staff trigger the duty. Once you have one paid employee, coverage is required (C.R.S. 8-44-101).
Volunteers usually do not count. An unpaid volunteer is generally not an employee under the law, so they normally do not create the duty.
Part-time and seasonal staff count the same as full-timers, with no minimum hours and no waiting period.
One narrow carve-out exists for a person serving a charity in an advisory role who is paid 750 dollars a year or less.

Who counts at a nonprofit

The test is the same as for any Colorado employer: it turns on whether someone is a paid worker you employ, not on the charitable mission. Volunteers, unpaid board members, and true independent contractors sit outside the count in most cases.

Person at the nonprofit	Triggers the coverage duty?	Notes
Full-time paid employee	Yes	Covered from day one; the first paid hire is enough
Regular part-time or seasonal paid staff	Yes	No hours minimum and no waiting period
Unpaid volunteer	Generally no	Not an employee under the law in most cases
Unpaid board member	Generally no	Counts only if also a paid employee
Advisory-role member paid 750 dollars a year or less	No	A narrow statutory carve-out for charitable organizations
A worker you direct day to day but call a contractor	Often yes	Colorado presumes an employee unless the two-part test is met

Volunteers and why coverage still matters

Because volunteers are generally not employees, an all-volunteer group with no paid staff usually is not required to carry workers comp. That does not make injuries free. If a volunteer is hurt, comp will not respond, and the nonprofit may face a general liability claim instead, which is a different policy. As soon as a nonprofit hires its first paid worker, the comp duty attaches. Many charities buy a policy earlier because a grant agreement, a lease, or a partner organization requires proof of coverage, and because a single staff injury can strain a tight budget.

Turning paid hires into a policy

The practical trigger for most nonprofits is the first paid role. A program that adds even one part-time coordinator has an employee, and at that point coverage is mandatory from that person's first day. Colorado does keep one narrow carve-out for people who serve a charitable, religious, or similar organization only in an advisory capacity and are paid 750 dollars a year or less, but that is a tight exception, not a general volunteer or stipend rule. If your organization relies heavily on volunteers, we can help you document who is paid staff and who is a genuine volunteer so your policy is rated on the right payroll.

A Grand Junction example

Illustrative, not a quote. A Grand Junction food-bank nonprofit runs on volunteers, then hires its first paid coordinator to manage a new grant. That single paid hire creates an employee, so Colorado now requires a policy, effective from the coordinator's first day. The dozens of volunteers still do not trigger the duty. When the grant agreement asks for proof of coverage, the nonprofit provides a certificate the same day. See our workers comp for nonprofits page.

Real questions Colorado owners ask

Does a Colorado nonprofit need workers comp?

Yes, once it has even one paid employee. Colorado does not exempt nonprofits, so a 501(c)(3) follows the same first-employee rule as any other employer.

Do volunteers count toward the requirement at a nonprofit?

Generally no. An unpaid volunteer is usually not an employee under the law, so volunteers normally do not trigger the duty. The requirement turns on your paid staff.

How many paid staff before a nonprofit needs a policy?

One. Coverage becomes mandatory once the nonprofit has a single paid employee. Part-time and seasonal paid staff count the same as full-timers.

Are board members counted as employees?

Not if they are unpaid. An unpaid board member is generally not an employee for coverage. A board member who is also paid staff would count like any other employee.

Is there any nonprofit carve-out in Colorado?

One narrow one: a person who serves a charitable or similar organization only in an advisory capacity and is paid 750 dollars a year or less is not covered. It is a tight exception, not a general stipend rule.

A grant requires proof of workers comp but we have no paid staff. What now?

You can buy a policy voluntarily to meet the grant requirement, even though the state does not require it with no paid employees. We can produce proof of coverage for the funder quickly.

What if a volunteer gets hurt at our nonprofit?

Workers comp generally will not respond, since volunteers are not employees. That kind of injury is usually a general liability question, which is a separate policy worth reviewing.

Why Colorado owners choose Morrow

We shop the right market for you. In Colorado you buy workers' comp on the open market, where private insurers compete with the state-chartered fund, Pinnacol Assurance, which by law cannot turn away a Colorado employer, so we can shop your rate across carriers and still have Pinnacol as a guaranteed backstop for 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 Colorado guides

Every Colorado 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.

This guide is general information, not legal advice. Colorado rules and penalty amounts can change, so verify current requirements with the Colorado Division of Workers' Compensation or a licensed advisor before you rely on them. Last updated: July 2026.