Is Disability and Paid Family Leave Benefits Coverage Required?
Nonprofit entities that are compensating individuals for their services are required to obtain disability and paid family leave benefits coverage for all employees with the following exceptions:
- Clergy and members of religious orders that are performing religious duties (WCL § 3 Group 18).
- People engaged in a professional1 or teaching capacity in or for a nonprofit institution designated under the IRS tax code as a religious, charitable, or educational organization. Teachers must only be performing teaching duties to be exempt from coverage.
- Persons receiving charitable aid from a religious or charitable institution who perform work in return for such aid and who are not under any express contract of hire, and certain persons receiving rehabilitation services in a sheltered workshop.
- Compensated executive officers of a not-for-profit corporation or unincorporated association are exempt, if the institution is designated under the IRS tax code as a religious, charitable, or educational organization.
Individuals who volunteer their services for nonprofit organizations and receive no compensation do not require disability and paid family leave benefits coverage.
1 Professional Capacity
A person engaged in a "professional capacity" exercises discretion and judgment rather than outside supervision in work that is predominantly intellectual and varied in character.
A person is engaged in a "professional capacity" when:
- Their primary work requires knowledge of an advanced field of science or learning, usually earned through specialized intellectual instruction or study; or
- They do original and creative work in a recognized artistic field that depends primarily on their invention, imagination or talent