Montana nonprofits follow the same workers compensation rule as for-profit businesses: once you have any paid employee, you need a policy. Being a 501(c)(3) or other nonprofit does not exempt you, and paid staff are covered from the first hire, whether they are full-time, part-time, or seasonal.
Who this is for: Montana nonprofit boards and directors sorting out coverage for paid staff and volunteers.
The short version
- Nonprofit status is not an exemption. Coverage is required at your first paid employee (section 39-71-401).
- Volunteers are generally not employees. Unpaid volunteers usually do not trigger the duty, but stipends can change that.
- Part-time and seasonal staff count from the first hire.
- Paid officers and directors can be employees. A director who draws a salary can be covered like any worker.
- Grants and contracts often require proof of coverage before funds or work begin.
Employees versus volunteers
The line that matters most for a nonprofit is paid versus unpaid. A paid worker is an employee and counts toward the coverage duty; a true volunteer generally does not. The gray area is stipends, small payments, and in-kind compensation, which can turn a volunteer into a paid worker in the state's eyes. Review anyone you pay, in any form.
| Worker | Counts toward the duty? | Notes |
|---|---|---|
| Paid full-time or part-time staff | Yes | Covered from the first hire, no hours minimum |
| Seasonal or program staff | Yes | Seasonal paid workers are employees |
| Unpaid volunteer | Generally no | True volunteers usually are not employees |
| Stipended volunteer | Possibly yes | Payments or in-kind compensation can create employee status |
| Salaried officer or director | Yes | A director who draws pay can be a covered employee |
What triggers coverage for a nonprofit
Coverage turns on that first paid employee, not on your tax status or your budget. A nonprofit with even one paid part-time coordinator generally needs a policy, while an all-volunteer group may not. Because funders often require proof of workers comp, many nonprofits carry it as soon as they add paid staff, both to comply and to keep grants and contracts on track. If you are unsure whether someone you pay is an employee, treat them as covered until you confirm.
A Bozeman example
Illustrative, not a quote. A Bozeman youth nonprofit runs on volunteers but hires one paid part-time program coordinator. From that first paid hire, Montana requires a policy covering the coordinator, even though the volunteers do not trigger the rule. When a foundation grant requires proof of coverage, the nonprofit already has a policy and produces a certificate the same day. See our workers comp for nonprofits page.
Real questions Montana owners ask
Does a Montana nonprofit need workers comp?
Yes, once it has any paid employee. Nonprofit status does not exempt you from the coverage rule.
Are volunteers covered?
Usually not, because unpaid volunteers are generally not employees. Paying stipends or wages can change that, so review anyone you pay.
Do part-time staff at a nonprofit count?
Yes. Part-time and seasonal paid staff count from the first hire.
Are officers and directors covered?
A director or officer who draws a salary can be a covered employee. Unpaid board members generally are not.
Does a grant require proof of coverage?
Often yes. Many grants and contracts require a certificate of workers comp before funds are released or work begins.
What if we only have one paid employee?
You still need coverage. One paid employee triggers the duty under section 39-71-401.
Why Montana owners choose Morrow
- We shop the right market for you. In Montana you buy workers' comp on the open market, where private insurers compete with the state-chartered Montana State Fund, which by law must insure almost any Montana employer that asks, so we can shop your rate across carriers and still keep the State Fund 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 Montana guides
Every Montana 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 Montana (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
- Montana nonprofit workers comp
This guide is general information, not legal advice. Montana rules and penalty amounts can change, so verify current requirements with the Montana Department of Labor and Industry, Employment Relations Division or a licensed advisor before you rely on them. Last updated: July 2026.