Workers’ compensation is not required in Texas for most private employers. The state is unusual in letting private businesses decide whether to carry a policy, and roughly a quarter of private-sector employers go without it. Coverage is mandatory, however, for every government employer in Texas and for private contractors working on public construction projects.
Who Must Carry Workers’ Compensation
Every governmental entity in Texas has to provide workers’ compensation to its employees. That includes state agencies, counties, cities, and school districts.1State of Texas. Texas Labor Code 504.001
The mandate also reaches private companies in one situation. Any private business that signs a building or construction contract with a governmental entity must carry workers’ compensation for every employee on that public project. Subcontractors on the same job face the same requirement and have to give proof of coverage to the general contractor, who passes it up to the government.2State of Texas. Texas Labor Code 406096 – Required Coverage for Certain Building or Construction Contractors
Private Employers Can Opt Out
Outside those categories, a private employer chooses. A company that buys a policy is called a “subscriber” and participates in the state’s regulated benefit system. A company that skips coverage is a “nonsubscriber” and sits outside that system entirely.3Texas Department of Insurance. Workers’ Compensation – Employer Resources
Whether an employer subscribes controls what happens after a workplace injury: an administrative benefits claim on one side, a direct lawsuit on the other.
What a Subscribing Employer Gets
Subscribers receive “exclusive remedy” protection. An injured employee’s only route to recovery runs through the workers’ compensation system, which shields the employer from negligence lawsuits over on-the-job injuries.4State of Texas. Texas Labor Code 408001 – Exclusive Remedy; Exemplary Damages
The shield is not absolute. If a worker dies because of the employer’s intentional act or gross negligence, the surviving spouse or heirs can still pursue exemplary damages in court.4State of Texas. Texas Labor Code 408001 – Exclusive Remedy; Exemplary Damages
What a Nonsubscribing Employer Gives Up
A nonsubscriber can be sued directly by an injured employee, and Texas law takes away three of the defenses that would normally be available in a negligence case:
- Contributory negligence. The employer cannot argue the employee’s own carelessness contributed to the injury.
- Assumption of risk. The employer cannot claim the employee knowingly accepted the dangers of the job.
- Fellow servant doctrine. The employer cannot shift blame to a coworker whose negligence caused the injury.
Stripped of those defenses, the employee only has to prove ordinary negligence and causation.5State of Texas. Texas Labor Code 406033 – Common-Law Defenses; Burden of Proof
Notice and Reporting Duties Apply Either Way
Opting out does not mean opting out of paperwork. Every Texas employer has to tell its employees where the company stands on workers’ compensation.
Subscribers
Employers with coverage must post a notice identifying the insurance carrier. It goes in the personnel office, if there is one, and anywhere else employees regularly see notices. The posting has to appear in English, Spanish, and any other language common in the workforce.6Texas Department of Insurance. Notice to Employees Concerning Workers’ Compensation in Texas If the carrier or coverage status changes, the notice has to be updated.7Legal Information Institute. 28 Texas Admin Code 110.101 – Covered and Non-Covered Employer Notices to Employees
Nonsubscribers
Nonsubscribers have similar posting obligations and must also give individual written notice to each new employee at hiring, in English, Spanish, and any other language needed to reach the workforce.8Texas Department of Insurance. Workers’ Compensation Non-subscriber Requirements
They also report annually. DWC Form-005, confirming the lack of coverage, is due to the Division of Workers’ Compensation by April 30 each year. Nonsubscribers with five or more employees additionally have to report on-the-job injuries on DWC Form-007. Failing to comply is an administrative violation that carries potential penalties.9Texas Department of Insurance. Workers’ Compensation Employer Forms and Notices
Deadlines for Employees of Subscribers
Workers covered by a subscribing employer face two deadlines, and missing either can sink the claim.
The employee must tell the employer about the injury within 30 days. For an occupational disease that develops over time, the 30-day clock starts when the employee knew or should have known the condition was work-related. The notice can go to the employer or to any supervisor or manager.10Justia. Texas Labor Code 409001 – Notice of Injury to Employer
The employee then has to file a formal claim with the Division of Workers’ Compensation within one year of the injury, or within one year of learning that an occupational disease was job-related.11State of Texas. Texas Labor Code 409003 – Claim for Compensation
The 30-day employer notice is the one that catches people off guard. An employee who waits two months before mentioning an injury and then tries to file may find the process much harder, though the Division can make exceptions where there was good cause for the delay.