Is Workers’ Compensation Coverage Needed When An Employer Utilizes Volunteers To Perform Work?
Workers’ compensation is a system that provides medical and wage benefits to individuals who are injured or become ill at their job. This coverage is mandatory and is a no-fault system, meaning the injured employee does not need to prove the employer was negligent to receive benefits. A common question arises regarding whether these protections extend to individuals who donate their time and services without pay.
AS 23.30.230(a) provides 12 groups of workers not covered by the Act and for whom employers need not provide workers’ compensation insurance. AS 23.30.230(b) says, “The exclusion of certain persons under (a) of this section may not be construed to require inclusion of other persons as employees for purposes of compensation under this chapter.” Volunteers are not included as a class of workers under AS 23.30.230(a) to whom the Act does not apply. Therefore, depending upon an investigation’s findings, “volunteers” may be employees and entitled to benefits under the Act if injured while performing duties for the organization. Whether an organization’s volunteers are employees must be determined on a case-by-case basis.
The General Rule for Volunteers
In most circumstances, volunteers are not covered by workers’ compensation insurance. This rule’s foundation lies in the legal definition of an “employee” under state workers’ compensation acts. In Alaska, an “employee” is defined at AS 23.30.395(19) as “a person who is not an independent contractor as described in AS 23.30.230 and who, under a contract of hire, express or implied, is employed by an employer.” Typically, an employee is an individual who performs services in exchange for wages pursuant to the express or implied contract. See City of Seward v. Wisdom, 413 P.2d 931(Alaska 1966). Since volunteers offer their services without expecting financial gain and for which there is not a “contract of hire,” they do not meet this requirement.
Workers’ compensation premiums paid by an employer are calculated based on their payroll. Because volunteers do not receive a salary, they are not included in this calculation, and the insurer does not anticipate covering them under a standard policy. This leaves the volunteer outside the system, meaning if they are injured while performing their volunteer duties, they cannot file a workers’ compensation claim for medical expenses or lost income.
When a Volunteer Might Be Considered an Employee
The line between a volunteer and an employee can become blurred when the volunteer receives benefits that could be interpreted as a form of payment. Alaska no longer has the relative nature of the work test to assist in determining if an individual is an employee. Arrangements where a “volunteer” is given benefits in exchange for services, rather than as simple reimbursement for out-of-pocket expenses may be scrutinized. Such benefits may be legally defined as “payments-in-kind” when analyzing if there is an express or implied contract. AS 23.30.395(19).
When such benefits are deemed compensation, an individual may be reclassified as an employee for legal purposes, triggering an entitlement to workers’ compensation benefits. Benefits that could be viewed as a wage include:
- Recurring stipends not tied to specific expenses
- A living allowance
- Free or discounted housing
- Regular meal vouchers
Businesses and organizations must be cautious, as providing substantial, regular perks could create an employment relationship. If an organization sets precise hours and treats the individual like an employee in all aspects except for a formal salary, under AS 23.30.395(19)’s “employee” definition, the board could rule that an employment relationship exists. This would obligate the organization to provide workers’ compensation coverage, and failure to do so could result in significant penalties for failure to insure. AS 23.30.080.
Specific Exceptions for Certain Volunteer Groups
Beyond an express or implied contract providing a worker remuneration, Alaska law has created direct exceptions by mandating workers’ compensation coverage for specific categories of volunteers. Alaska’s statutes recognize the hazardous nature of certain volunteer roles and extend protection regardless of whether the individual is paid. This includes members of the organized militia (AS 23.30.236); volunteer emergency medical technicians (AS 23.30.238), special officers (AS 23.30.041); volunteer firefighters (AS 23.30.243); and emergency and disaster relief forces (AS 23.30.244). This coverage is a matter of specific legislative action. The protection is tied to the high-risk duties performed by volunteer emergency service personnel and is not a blanket extension of benefits to all who volunteer for public entities.
Alaska law also classifies members of State boards and commissions as employees when the member is traveling for or performing work for the board or commission (AS 23.30.242).
These legislative exceptions treat designated volunteers as “employees” for the sole purpose of workers’ compensation. How they are compensated is statute specific and varies depending upon the volunteer category.
Coverage for Volunteers at Nonprofit Organizations
Volunteering for a government agency or a nonprofit organization does not in itself guarantee workers’ compensation coverage. Their eligibility for benefits is still governed by state law, which varies widely. Unpaid volunteers at a nonprofit agency are generally not considered employees and therefore do not have to be covered by a standard workers’ compensation policy.
Alaska has not enacted laws that either permit or require government and nonprofit organizations to purchase workers’ compensation insurance for their volunteers. These are typically accident and medical plans which provide only medical expense coverage for volunteers and are usually less costly than workers’ compensation coverage for volunteers.
This is an optional coverage extension. In these cases, the organization can add an endorsement to its existing policy to explicitly include volunteers, offering them a safety net in case of injury. However, the Division of Insurance said some general liability policies contain exclusionary language that restricts coverage if a volunteer is injured.
Without such specific state provisions or voluntary endorsements, a volunteer for a charity is in the same position as any other volunteer.
Alternative Options for Injured Volunteers
When an injured volunteer is not covered by workers’ compensation, they may have other legal and financial remedies available. One path is to file a personal injury lawsuit against the organization. Unlike a workers’ compensation claim, which is a no-fault system, a personal injury lawsuit requires the volunteer to prove that the organization was negligent and that its negligence directly caused the injury. Personal injury actions are usually handled by an attorney who receives compensation on a contingency fee basis. In other words, if the volunteer prevails, the attorney is paid a portion of the recovery. As a plaintiff in a personal injury action, like workers’ compensation claimants, the volunteer is responsible for litigation costs.
Many organizations carry insurance policies that may offer relief to an injured volunteer. A general liability insurance policy, for example, is designed to cover injuries to third parties on the organization’s premises. A volunteer could file a claim under this policy to cover medical expenses, though it may require showing some degree of fault on the organization’s part.
Although perhaps not available through all Alaskan insurance carriers, a more direct form of protection is a specific volunteer accident insurance policy. These policies can be purchased to provide medical expense coverage for volunteers who get hurt while performing their duties, regardless of fault. The coverage amounts are typically set at a specific limit and are intended to handle immediate medical costs.
Determining if an Organization’s Volunteers are Employees
Moving forward, the Special Investigations Unit (SIU) will investigate organizations that allege to utilize only volunteers to perform work and determine if the “volunteers” are performing services under an express or implied contract. This will be done by asking questions such as:
Do volunteers have schedules established by the organization?
How often does the volunteer perform services for the organization?
What is the nature of the organization’s business?
What is the nature of the services the volunteer performs?
Are the volunteer’s tasks crucial to the organization’s day-to-day business operations?
Do volunteers receive housing or a housing allowance?
Do volunteers receive debit cards?
Do volunteers receive food or a food allowance?
Do volunteers receive any form of compensation?
Do volunteers receive any tangible items from the organization?
Are volunteers offering their services freely and without any direct or implied pressure or coercion by the employer?
Do volunteers receive any financial gain from their volunteer work for the organization?
Does the organization pay for the volunteers’ travel?
Has the organization entered into an express or implied contract with volunteers?
After investigation, if it is found that either an express or implied employment contract exists between the volunteer and the organization, a petition for finding of failure to insure will be filed. If the alleged employer continues to dispute it is an employer and does not obtain workers’ compensation insurance, at the director’s discretion, a “stop work” order can be issued. If the alleged employer does not obtain insurance and the case does not resolve through a stipulation, it will be heard by the board.
last updated: November 10, 2025
