Are Employers Required to Carry Workers’ Compensation Coverage in Texas?

Texas is different from other states in many ways. One of those ways is that Texas is the only state that does not require employers to carry Workers’ Compensation insurance.

Is There Any Workers’ Compensation Insurance in Texas?

Texas encourages employers to carry Workers’ Compensation insurance. Employers have the right to choose to protect their employees using Workers’ Compensation. If they choose not to, the employer loses several common law defenses in employee personal injury claims. When an employer offers Workers’ Compensation to their employees, they are immune from employee lawsuits, except for gross negligence.

The employer only needs to offer the coverage, since the employee can choose to opt out. The opting out choice happens at the initial offering, not after an injury. At the time of hiring, each new employee receives notification of non-coverage or coverage. The same notice posts on the bulletin board with all other announcements required in the workplace. Each new hire has five days to choose to waive their right to workers’ compensation insurance. If they waive this right, they retain the common law right to sue their employer for work related injuries. The notice informs the employee that giving up workers’ compensation means they also give up any income or medical benefits under workers’ compensation law.

Non-subscriber employers that go without coverage remain open for personal injury lawsuits from injured employees. Damages and fees seem almost unlimited. Plus, some typical personal injury defenses like assumption of risk, last clear chance, contributory negligence, or co-worker negligence, do not apply.

How Common Is Workers’ Compensation in Texas?

Many Texas employers choose not to provide protection for their employees through Workers’ Compensation. Premiums are high in hazardous industries, because of the many previous claims. Companies at high risk for claims frequently chose alternate, inferior injury employee benefit plans. Sometimes these companies offer their employees no protection at all.

When employers discontinue Workers’ Compensation insurance coverage, they must inform the Workers’ Compensation Division of the Texas Department of Insurance and their employees, as soon as possible.

Very large corporations that provide Workers’ Compensation insurance by law in every other state do not do so in Texas.

• Home Depot
• Kroger
• Lowes
• Macy’s
• Sam’s Club
• Target
• Walmart
• What-a-Burger

These companies find that their choice in Texas to forgo Workers’ Compensation insurance premiums increases profitability.

Do Injured Employees Have Rights When Employers Do Not Offer Workers’ Compensation Insurance?

This can be tricky and confusing from a legal standpoint. The company’s employee handbook outlines the alternative options for injured employees. The agreement may require waiving employee rights to bring a claim or submitting disputes to binding arbitration instead of filing a lawsuit. Legal advice is helpful before taking any other action.

If the employee handbook outlines no plan at all, the injured party has the right to file a legal claim against the employer. When injuries result from the negligence of an employee, another company or a visitor, a third-party negligence claim may result.

What Does Workers’ Compensation Cover?

Workers’ Compensation covers an injury or illness, without considering fault, when sustained during the normal course of employment. This includes any injuries sustained during travel that relates to the employee’s usual work.

Injuries not covered include the results of the employee’s willful criminal act, horseplay, or self-injury, intoxication from alcohol or drugs, voluntary participation in off-duty recreational activities, third party criminal acts directed at the employee for personal reasons unrelated to work, and acts of God.

Texas Workers’ Compensation laws make work injuries specifically complex. It is certainly wise to speak with an attorney to determine the options associated with any work-related injury.