If your Hawaii nonprofit has any paid employees, yes, it must carry workers compensation insurance, because Hawaii requires coverage once you have any employee under Chapter 386 and there is no blanket nonprofit exemption. What Hawaii does exclude is genuinely unpaid volunteer service for a religious, charitable, educational, or nonprofit organization, so your true volunteers are not employees, but your paid staff are.
Who this is for: Hawaii nonprofits and charitable organizations, from all-volunteer groups to nonprofits with paid program and administrative staff.
The short version
- A nonprofit with any paid employee must carry workers comp; being a nonprofit does not exempt you.
- Genuine unpaid volunteers are not employees, so they do not trigger the requirement.
- Part-time and seasonal paid staff count the same as full-time employees.
- A stipend, housing, or other pay can turn a volunteer into a covered worker.
- Grants and contracts often require proof of coverage before funds are released.
Volunteers versus paid staff
The line that matters for a Hawaii nonprofit is pay, not mission. Hawaii's law excludes voluntary service performed without pay for a religious, charitable, educational, or nonprofit organization, and it also excludes someone who receives aid from such a group and works incidental to that aid. Those people are not employees. But once you pay someone a wage to work, they are a covered employee like anyone else, and the nonprofit needs a policy. A ministers-and-clergy exclusion also applies to ordained or licensed religious leaders acting in their ministry.
| Worker | Employee for comp? | Notes |
|---|---|---|
| Unpaid volunteer | No | Genuine volunteer service is excluded |
| Paid full-time or part-time staff | Yes | Covered from day one, no nonprofit exemption |
| Volunteer paid a stipend or given housing | Often yes | Pay or in-kind value can make them an employee |
| Ordained minister in their ministry | No | Clergy exclusion applies |
Watch the stipend trap
The most common mistake a Hawaii nonprofit makes is treating a paid person as a volunteer. If you give a coordinator a monthly stipend, cover an intern's housing, or pay a small wage, that value can make the person a covered employee, and the coverage rule applies. It is safer to assume anyone you pay is an employee and to confirm the handful of true volunteers separately. Many funders also require proof of workers comp in the grant agreement, so carrying it keeps your funding on track as well as your workers protected.
A Honolulu example
Illustrative, not a quote. A Honolulu nonprofit runs largely on volunteers but pays one part-time program coordinator and a seasonal event assistant. Because it has paid staff, Hawaii requires a policy, and both paid workers are covered from day one even though most of the team is unpaid. The genuine volunteers do not count toward the rule. When a county grant requires proof of coverage before releasing funds, the nonprofit already has a policy and sends the certificate the same day. See our workers comp for nonprofits page.
Real questions Hawaii owners ask
Does my Hawaii nonprofit need workers comp?
If you have any paid employees, yes. Hawaii has no blanket nonprofit exemption, so coverage is required once you pay even one employee under Chapter 386.
Do volunteers need workers comp coverage?
No. Genuine unpaid volunteer service for a charitable or nonprofit group is excluded in Hawaii, so true volunteers are not employees and do not trigger the requirement.
We only have part-time paid staff. Do we still need it?
Yes. Part-time and seasonal paid staff count the same as full-time employees in Hawaii, so a nonprofit with any paid worker needs a policy.
Does paying a volunteer a stipend change things?
Often yes. A stipend, housing, or other pay can turn a volunteer into a covered employee, which means the nonprofit needs coverage. Assume anyone you pay is an employee.
Are clergy or ministers covered?
Usually not. Hawaii excludes an ordained, commissioned, or licensed minister acting in their ministry, so a religious leader in that role is not a covered employee.
Why do our grants ask for proof of workers comp?
Because many funders require it in the grant agreement. Carrying coverage keeps your funding on track and protects your paid staff at the same time.
Does our tax-exempt status exempt us from workers comp?
No. Tax-exempt status is separate. Hawaii ties the workers comp rule to having paid employees, not to how you are taxed, so a tax-exempt nonprofit with staff still needs coverage.
Why Hawaii owners choose Morrow
- We shop the right market for you. Hawaii has no state-run fund, so private insurers compete for your business and we can shop your rate freely. If no insurer will take you, there is a guaranteed backstop: HEMIC, a member-owned insurer that has to cover businesses others turn down.
- 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 Hawaii guides
Every Hawaii 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 Hawaii (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
- Hawaii nonprofit workers comp
This guide is general information, not legal advice. Hawaii rules and penalty amounts can change, so verify current requirements with the Hawaii Department of Labor and Industrial Relations, Disability Compensation Division or a licensed advisor before you rely on them. Last updated: July 2026.