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Should religious group be exempt from work comp coverage?

In a very interesting story out of Montana, the state's highest court recently heard arguments in an uninsured employer case pitting a religious group with certain ideals concerning labor against a 2009 state law mandating that all employers must provide work comp coverage.

The case in question involves the Hutterites, a Protestant-based religious group that can be found in German-speaking colonies scattered throughout Canada and the United States, and who live a religion-centered lifestyle similar to that of the Amish or Mennonites. There are roughly 50 Hutterite colonies in Montana, each of which has roughly 100 people.

While Hutterites primary make their living producing agricultural products in Montana, they have also recently made ventures into private construction -- an area in which they are very skilled. However, the Hutterites views on labor have put them at odds with the state and the construction industry in general.

Specifically, they do not carry work comp insurance, claiming that since their workers don't make wages (all money goes to the community) and don't file work comp claims (they have a community medical trust set up), they don't need to maintain work comp coverage.

"Their core belief is that they have no property. All the property and labor they have, they contribute to the colony," said Ron Nelson, the attorney representing the Big Sky Hutterite colony.

State officials and private contractors, however, believe that this position often gives the Hutterites an unfair business advantage since they are able to routinely outbid their competitors who have higher costs because of the need to pay work comp premiums.

Interestingly, the Big Sky Hutterite colony recently challenged Montana's law mandating work comp coverage for all employers, arguing that it was a violation of their religious rights.

The state court judge ultimately sided with the Hutterite colony, and the state of Montana appealed to the Montana Supreme Court, where arguments on the matter were held just last week.

Here, Montana Attorney General Stuart Segrest argued that the state's work comp law only regulates commercial activities -- something which the Hutterites entered into voluntarily -- and does not interfere with any religious matters.

"They're not allowed to become a law unto themselves," he argued.

The Montana Supreme Court has yet to make a decision in the case.

Stay tuned for developments in this intriguing case ...

If you are an uninsured employer facing a real problem -- prospective fine, prosecution, an employee injury or litigation -- there are steps that can be taken to minimize the consequences. In these difficult circumstances, you may want to consider consulting with an experienced legal professional.

This post was provided for informational purposes only and is not to be construed as legal advice.


Insurance Journal, "Montana high court hears Hutterite labor case," Matt Volz, April 27, 2012

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