Is Workers’ Comp Required in Texas? What Happens If Your Employer Is a Nonsubscriber

Is workers’ comp required in Texas?

Is workers’ comp required in Texas? Not for most private employers. The Texas Department of Insurance says coverage is not required in most cases. Under Texas Labor Code Section 406.002(a), an employer other than a public employer may choose whether to carry workers’ compensation insurance, unless another law provides otherwise. Under Section 406.002(b), an employer that elects workers’ compensation insurance coverage is subject to the Texas Workers’ Compensation Act.

If you or a family member had a work-related injury or illness on the job, confirm the company’s workers’ compensation insurance for the date of injury. For injured workers, Sections 408.001 and 406.033 distinguish workers’ compensation claims from personal injury lawsuits against nonsubscribers. The coverage check below helps you identify which path may apply before you sign a waiver or file a claim.

Insurance carriers and self-insured employers

Section 406.003 provides two ways to obtain workers’ compensation in Texas: a policy from a licensed insurance carrier or certified self-insurance. Covered businesses use one of these authorized methods:

• A business can buy workers’ comp insurance from a licensed insurance carrier. The insurer provides the policy and handles claims under it.
• Self-insured employers self-insure through certification under the Texas Workers’ Compensation Act instead of buying an insurance policy.

Because Section 406.003 names only those two methods, a private health insurance plan or a nonsubscriber’s own injury benefit plan is not, by itself, workers’ compensation coverage.

The Texas Department of Insurance calls a business without this coverage a nonsubscriber. Under Section 406.033, an injured worker may have the right to file a negligence lawsuit against a nonsubscriber instead of a workers’ compensation claim.

Who is required to carry workers’ compensation insurance in Texas?

Public employers must provide workers’ comp coverage, according to the Texas Department of Insurance, and Texas Labor Code Section 406.096 requires coverage certifications for public building or construction projects.

TDI states that all Texas governmental entities must have workers’ compensation coverage, including public schools, utilities, cities, and counties. So does Texas require workers’ comp from these employers? Yes. They do not have the elective coverage choice described for most private employers in Section 406.002(a).

Workers’ compensation insurance on public projects

• Under Section 406.096(a), a governmental entity entering a building or construction contract must require the contractor to certify in writing that it provides workers’ compensation insurance for each of its employees on the public project.
• Under Section 406.096(b), each subcontractor must give its coverage certificate to the general contractor, who must provide it to the governmental entity.

What is a nonsubscriber under Texas workers’ compensation law?

A nonsubscriber is a Texas business that does not carry workers’ compensation insurance, according to the Texas Department of Insurance, Division of Workers’ Compensation.

TDI states that a company becomes a nonsubscriber on the date its workers’ comp insurance policy ends if new coverage is not in place. When a company ends workers’ compensation insurance coverage, TDI requires a notice of no coverage.

Notices to the Division of Workers’ Compensation

Under Texas Labor Code Section 406.004, nonsubscribers must notify the Division of Workers’ Compensation in writing about their lack of coverage.

TDI’s nonsubscriber guidance identifies DWC Form-005 as the notice for employers without workers’ compensation insurance. Nonsubscribers file that notice:

• Between February 1 and April 30 each year.
• After the business hires its first employee.
• After ending a workers’ compensation insurance policy.

Workplace notices for employees

Under Section 406.005, every employer must tell new employees whether it has workers’ comp coverage and post a notice at the workplace. The employer must revise that notice when the information changes and notify employees not later than the 15th day after coverage, or its termination or cancellation, takes effect.

TDI requires a nonsubscriber to post its notice of no coverage in English, Spanish, and any other language as needed. When you start a job, check the company’s notice of whether it carries workers’ compensation insurance. If you later have a work-related injury or illness, use TDI’s verification tools to check coverage for that date.

Reporting workplace injuries and occupational diseases

TDI’s nonsubscriber guidance says nonsubscribers with five or more employees must report work-related injuries, illnesses, and deaths with more than one day of lost time. A company’s report of a qualifying injury or illness is separate from its DWC Form-005 notice that it lacks workers’ compensation insurance.

If your employer is a nonsubscriber, you can get help with a nonsubscriber claim from a work injury attorney.

How can I tell if my Texas employer carries workers’ comp?

Use the Texas Department of Insurance’s coverage verification page to check whether the company had workers’ compensation insurance on the date of injury. TDI provides insurance coverage lookup tools, coverage lists, and an email option if you cannot determine the company’s status.

• Check the posted workplace notice. Section 406.005 requires every employer to post whether it has workers’ comp insurance.
• Search TXCOMP or use the NCCI lookup linked by TDI. TDI’s TXCOMP instructions explain how to search by employer name and coverage date, using the date of injury.
• Review the Texas Open Data lists of businesses linked from TDI’s coverage verification page.
• Email TDI directly if coverage is unclear. Send coverage.verification@tdi.texas.gov the business name, physical address, and date of injury. TDI says a Division of Workers’ Compensation representative will respond with coverage information within one business day.

If the results are confusing or conflicting, ask a lawyer handling claims for injured workers to review the company’s coverage information before you file a claim. Confirm whether the company was covered on the date you were hurt, not just whether it has coverage now.

What benefits does Texas workers’ compensation provide?

When a company carries workers’ comp insurance, workers’ compensation in Texas provides benefits for a compensable injury through the company’s insurance carrier or certified self-insurance. Workers’ compensation provides medical and income benefits, plus death and burial benefits, under Chapter 408 of the Texas Labor Code.

Under Section 406.031(a), the insurance carrier is liable for compensation without regard to fault or negligence when the employee is subject to the Act and the injury arises out of and in the course and scope of employment.

Medical benefits and choice of doctor

Under Section 408.021, an employee who sustains a compensable injury is entitled to all health care reasonably required by the nature of the injury as and when needed. Medical benefits are payable from the date of the compensable injury. Except in an emergency, health care must be approved or recommended by the employee’s treating doctor.

Outside a workers’ compensation health care network, Section 408.022 requires medical treatment from a doctor on the division’s list of approved doctors, except in an emergency. Doctor selection inside a network follows separate rules. The employee is entitled to an initial choice of doctor from that list and may ask the division in writing for authority to select an alternate doctor.

Income benefits

Section 408.081 entitles an injured employee to timely and accurate income benefits. Income benefits are paid weekly as and when they accrue, unless the employee and the insurance carrier agree to monthly payments under the commissioner’s rules.

Death benefits and burial benefits

If a compensable workplace injury results in death, Section 408.181 makes the insurance carrier responsible for paying death benefits to the legal beneficiary. Section 408.186 requires the insurance carrier to pay reasonable burial expenses, up to the limit in the statute, to the person who incurred the burial costs.

Deadlines to report an injury and file a claim in Texas

Texas Labor Code Chapter 409 sets the deadlines for workers’ compensation claims against a covered employer:

• Report the injury to your employer within 30 days. Section 409.001 requires notice not later than the 30th day after the injury, or for an occupational disease, after the employee knew or should have known it may be related to work. Notice may go to the employer or a supervisor or manager.
• The company reports to its insurer. Under Section 409.005, the employer must report to its insurance carrier not later than the eighth day after an injury keeps the employee away from work for more than one day, or after the employee gives notice of an occupational disease. The employer must give the injured employee a written copy of that report.
• File a claim with the Division of Workers’ Compensation within one year. Section 409.003 requires a claim not later than one year after the injury occurred, or for an occupational disease, after the employee knew or should have known it was related to work.

Missing either deadline can end the claim, but Sections 409.002 and 409.004 list exceptions, including good cause and an employer or carrier that does not contest the claim. Talk with a lawyer even if a deadline has passed.

These Chapter 409 deadlines apply to workers’ compensation claims. They do not govern a negligence lawsuit against a nonsubscriber, and Section 406.033 does not set a filing deadline for that lawsuit, so ask a lawyer promptly which deadline applies to you.

If a workers’ compensation claim is disputed or denied

Under Texas Labor Code Chapter 410, a dispute over an insurance carrier’s liability for workers’ compensation benefits, including a denied claim, goes through the Division of Workers’ Compensation:

1. A benefit review conference, which Section 410.021 describes as an informal proceeding to explain the parties’ rights, review the claim, and mediate disputed issues.
2. A contested case hearing under Section 410.151.
3. An appeal to the appeals panel, filed in writing not later than the 15th day after the party receives the administrative law judge’s decision, not counting weekends and listed holidays, under Section 410.202.
4. Judicial review under Section 410.251, after the party has exhausted its administrative remedies.

If you hire a lawyer, they can help you prepare for each step of a disputed claim for workers’ compensation in Texas.

Can I sue my employer, or is workers’ comp my only remedy?

Under Texas Labor Code Section 408.001(a), workers’ compensation benefits are generally the exclusive remedy against a covered employer for a work-related injury or death. Under workers’ compensation in Texas, an injured employee generally uses the Texas workers’ compensation system to claim workers’ compensation benefits rather than filing a personal injury lawsuit against that employer.

Section 408.001(b) provides an exception for exemplary damages: the surviving spouse or heirs of the body of a deceased employee may be able to recover those damages if the death was caused by the employer’s intentional act or omission or gross negligence.

If the company is a nonsubscriber, Section 406.033 provides rules for injured workers who sue for negligence. You can learn more about suing after a workplace injury to understand how these rules interact.

Suing a Texas nonsubscriber employer after a work injury

A worker may sue a Texas nonsubscriber for negligence, but Texas Labor Code Section 406.033(d) requires proof of negligence by the employer or by its agent or servant acting within the general scope of the agent’s or servant’s employment.

Defenses under Texas workers’ compensation laws

Section 406.033(a) provides that a nonsubscriber cannot defend the lawsuit by arguing that:

• The employee was guilty of contributory negligence.
• The employee assumed the risk of injury or death.
• A fellow employee’s negligence caused the injury or death.

A nonsubscriber sued for negligence cannot use those three defenses.

Under Section 406.033(c), the employer may still defend on the grounds that the injury was caused by an employee’s act intended to bring about the injury or occurred while the employee was intoxicated.

An employer may be held liable for injuries resulting from negligence only if the injured worker meets Section 406.033(d)’s proof requirement. The restrictions on defenses in Section 406.033(a) do not remove that requirement.

Waivers before and after an injury

Section 406.033(e) provides that a waiver of this negligence claim signed before the injury or death is void and unenforceable.

Section 406.033(f) allows a post-injury waiver only if all four conditions are met:

1. The employee enters into the waiver voluntarily, with knowledge of its effect.
2. The waiver is entered into no earlier than the 10th business day after the initial report of injury.
3. Before signing, the employee has received a medical evaluation from a nonemergency care doctor.
4. The waiver is in writing and specifically states the parties’ true intent.

Section 406.033(g) also requires the waiver terms to appear conspicuously on the face of the agreement, in type larger than the body text or in contrasting colors.

Have a lawyer review any waiver before you sign it after a workplace injury or illness.

Keeping your right to sue when your employer has workers’ comp coverage

Under Texas Labor Code Section 406.034(b), an employee of a covered employer may retain common-law rights by giving the employer written notice no later than the fifth day after starting the job. If the employer obtains coverage later, the deadline is no later than the fifth day after the employee receives written notice of that coverage.

• Section 406.034(b) requires the notice to state that the employee waives workers’ compensation coverage and retains all common-law rights of action.
• Section 406.034(c) provides that an employer may not require an employee to retain common-law rights as a condition of employment.
• Under Section 406.034(d), a later lawsuit is subject to all defenses available under common law and Texas statutes, unless the employee waived coverage in connection with an agreement with the employer.

What to do after a Texas work injury and how Zinda Law Group can help

After a Texas work injury or illness, seek needed medical care, report the injury, and confirm whether the company carries workers’ comp coverage before deciding how to pursue a claim.

• Seek needed medical care for the job injury.
• Report the injury to your employer. If the employer carries workers’ comp, Section 409.001 requires notice within 30 days.
• Confirm coverage for the date of injury through TDI’s tools and the posted workplace notice.

Avoid signing releases or waivers, especially with a nonsubscriber employer, until you understand how those documents may affect your rights to recover compensation or file a claim.

Learn more about steps after a work injury.

Zinda Law Group helps injured employees evaluate whether to file a workers’ compensation claim or pursue a claim against a nonsubscriber employer. Request a free case evaluation or call 800-863-5312 to discuss your situation with a Texas work injury attorney. No Win, No Fee.