If your Washington nonprofit has any paid staff, yes, it must carry workers compensation on them through the state fund at the Department of Labor and Industries (L&I), from the first hour they work. Being a nonprofit does not create an exemption; the state looks at whether people are working for pay, not at your tax status. Your volunteers are outside the mandate, and a nuance many nonprofits miss is that the officer exemption used by for-profit corporations usually does not fit a nonprofit, because it depends on being a shareholder.
Who this is for: Washington nonprofits with employees, paid executives, or a mix of paid staff and volunteers.
The short version
- Paid staff must be covered through L&I from the first hour; nonprofit status is not an exemption.
- Volunteers are outside the mandate, and certain unpaid students are excluded too.
- The corporate-officer exemption usually does not fit a nonprofit, because it requires being a shareholder.
- You buy only from the state fund; there is no private carrier to shop in Washington.
- Because the state fund will not pay a lawyer to defend you if a worker sues, many nonprofits add a small add-on coverage for exactly that; it is called stop-gap employers liability.
Staff, officers, and volunteers
The dividing line is pay. Anyone your nonprofit pays to work is generally a covered worker from the first hour, whether they are full-time, part-time, or seasonal. Volunteers, who receive no pay, are excluded from the mandate, though a nonprofit can elect to cover certain volunteers if it chooses. The officer question is where nonprofits differ from businesses: a for-profit corporation can leave a qualifying officer off the policy, but only if that officer is also a shareholder, and nonprofits generally have no shareholders. So a paid executive director or a paid officer of a nonprofit usually cannot use that exemption and is a covered worker like any other employee.
Who counts at your nonprofit
| Person | Covered? | Notes |
|---|---|---|
| Paid employees | Yes, from the first hour | No headcount minimum; part-time and seasonal count |
| Paid executive or officer | Usually yes | The officer exemption needs a shareholder, which nonprofits generally lack |
| Volunteers | Not required | Outside the mandate; can be covered by election if the nonprofit chooses |
| Unpaid students in some programs | Often excluded | Certain unpaid students are excluded from the mandate |
Getting the setup right
Two practical steps keep a nonprofit out of trouble. First, if you pay anyone, open an L&I account and report their hours; do not assume a small stipend or a part-time role escapes the rule. Second, decide how you handle volunteers, since a serious injury to an unpaid volunteer would not be paid by an employee policy, and some nonprofits either elect volunteer coverage or carry separate accident insurance for volunteers. Finally, because the state fund pays benefits but does not defend a lawsuit, adding stop-gap employers liability to your general liability policy protects the organization if a paid worker sues over an injury.
A Bellingham example
Illustrative, not a quote. A Bellingham nonprofit runs a food program with a paid director, two part-time coordinators, and a roster of weekend volunteers. The director and the two coordinators are paid, so all three are covered through L&I from the first hour, and the director cannot use the corporate-officer exemption because there are no shareholders. The volunteers are outside the mandate, but the board elects volunteer coverage for peace of mind and adds stop-gap employers liability to the general liability policy. See our workers comp for nonprofits page.
Real questions Washington owners ask
Does our Washington nonprofit need workers comp?
If you pay anyone to work, yes, through the state fund from the first hour. Nonprofit status is not an exemption. Only your unpaid volunteers sit outside the mandate.
Are our volunteers covered?
Not automatically, because volunteers are outside the mandate. A nonprofit can choose to elect coverage for certain volunteers, or carry separate accident insurance, since an employee policy would not pay a volunteer's injury.
Is our paid executive director exempt as an officer?
Usually not. The officer exemption requires the officer to be a shareholder, and nonprofits generally have no shareholders, so a paid executive or officer is typically a covered worker like any employee.
Where do we buy coverage?
Only from the state fund at Labor and Industries. Washington does not allow private workers comp carriers, so you open an L and I account and report your paid staff's hours each quarter.
Do part-time staff and small stipends count?
Yes. Washington has no part-time exception, and paying someone to work generally makes them a covered worker. Do not assume a small stipend or a few hours a week escapes the rule; confirm it.
Are unpaid interns or students covered?
Certain unpaid students are excluded from the mandate, but the details matter. If an intern is paid, they are generally a covered worker. Check the specific arrangement before deciding not to cover someone.
Does the state policy defend our nonprofit in a lawsuit?
No. The state fund pays a hurt worker's benefits but does not provide a legal defense. Nonprofits with paid staff usually add stop-gap employers liability to their general liability policy for that.
Why Washington owners choose Morrow
- We shop the right market for you. In Washington, workers' compensation is sold only through the state fund at the Department of Labor and Industries (L&I), with no private carriers to shop, so we help you open and run your L&I account correctly and place the stop-gap employers liability and other business coverages the state fund does not include.
- 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 Washington guides
Every Washington 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 Washington (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
- Washington nonprofit workers comp
This guide is general information, not legal advice. Washington rules and penalty amounts can change, so verify current requirements with the Washington State Department of Labor and Industries (L&I) or a licensed advisor before you rely on them. Last updated: July 2026.