Every other state requires most private employers to carry workers’ compensation insurance. Texas lets them choose. That single difference shapes how a Texas employer should prepare for injuries, respond when one happens, and think about legal risk afterward.

Texas is the only state where coverage is optional for most private employers

A Texas private employer that buys workers’ compensation coverage is a subscriber. One that does not is a non-subscriber. According to the Texas Department of Insurance’s most recent employer survey, about 75 percent of Texas private employers were subscribers in 2022, covering about 83 percent of private-sector employees. The remaining 25 percent of employers, mostly smaller businesses, employed about 17 percent of the workforce. Some non-subscribers provide their own occupational injury benefit plans instead.

Public employers and some government contractors must carry coverage. For everyone else, the choice comes with trade-offs.

What subscribing gets you

  • Exclusive remedy. For a covered employee, workers’ compensation benefits are generally the exclusive remedy against the employer for a work injury. The employee receives medical and income benefits without proving fault, and in most cases cannot sue the employer for negligence. The main exception allows the surviving spouse and heirs of an employee whose death was caused by the employer’s gross negligence or intentional act to seek exemplary damages.
  • A defined system. Benefits, disputes, and medical care run through the Division of Workers’ Compensation and the insurance carrier, not the courts.
  • Return-to-work help. TDI runs a reimbursement program for small subscribers, with 2 to 50 employees, that can reimburse up to $5,000 for equipment or workplace changes that help an injured employee come back to work.

What opting out costs you

  • Lost defenses. An injured employee can sue a non-subscriber for negligence, and the employer cannot argue that the employee was contributorily negligent, assumed the risk, or was hurt by a co-worker’s negligence. The employee still has to prove the employer was negligent, but the employer’s usual defenses are gone.
  • No pre-injury waivers. A waiver an employee signs before an injury, giving up the right to sue a non-subscriber, is void.
  • Filings. A non-subscriber with one or more non-exempt employees must file DWC Form-005 with the Division every year between February 1 and April 30, and must tell employees that it does not carry coverage. A non-subscriber with five or more non-exempt employees must report each death, each injury causing more than one day away from work, and each occupational illness on DWC Form-007, by the seventh day of the following month.

Opting out can make sense for some employers, usually with a well-designed occupational benefit plan and a strong safety program. Without both, a single serious injury can become an uninsured negligence lawsuit.

Prevention: what works

The best injury claim is the one that never happens. The programs that work share a few habits:

  • Written safety rules people actually follow, trained at hire and refreshed, with supervisors held to them.
  • Near-miss reporting without blame, so hazards are fixed before someone is hurt.
  • A job hazard review for the tasks that cause most injuries in your business: lifting, vehicles, ladders, machinery, repetitive work.
  • A clear drug and alcohol policy, applied consistently. Texas law relieves a carrier of liability for an injury that occurred while the employee was intoxicated.
  • A return-to-work program with light or modified duty, written down before you need it.

When an injury happens: the first days

  1. Get care first. Call 911 for anything serious. Do not discourage reporting or treatment.
  2. Report to OSHA when required. A work-related death must be reported within 8 hours. An in-patient hospitalization, an amputation, or the loss of an eye must be reported within 24 hours.
  3. Report to your carrier. When an injury keeps an employee out of work for more than one day, or on notice of an occupational disease or a death, a subscriber must send DWC Form-001, the Employer’s First Report of Injury or Illness, to its carrier and the employee within 8 days. Keep a copy as your record of the injury.
  4. Investigate the incident, not the person. Photograph the scene, preserve video, and interview witnesses the same day. The goal is to find the cause and fix it. The approach in effective workplace investigations applies here too.
  5. Stay in contact with the employee, and offer modified duty in writing when the doctor allows it.

Employees have their own deadlines: they must notify the employer within 30 days of the injury, or of learning that an illness may be work-related, and generally must file a claim with the Division within one year. Missing those deadlines can bar a claim, but an employer that discourages reporting invites a much larger problem.

Retaliation, leave, and terminations

Texas law prohibits discharging or discriminating against an employee because they filed a workers’ compensation claim in good faith, hired a lawyer for one, or testified in a proceeding. That does not freeze every employment decision. The Texas Supreme Court has held that uniformly enforcing a reasonable absence-control policy is not retaliation. But timing and consistency matter, and a termination soon after a claim draws scrutiny.

A workplace injury can also trigger other obligations: FMLA leave for employers with 50 or more employees, and the reasonable-accommodation duties of the ADA for employers with 15 or more. Those laws run alongside workers’ compensation, not instead of it. Before ending the employment of an employee who is out on a work injury, check all three, document the legitimate reason, and confirm that it has been applied the same way to others.

Where to start

If you have not looked at your coverage decision, injury-reporting process, and return-to-work program recently, start there. I help employers set up those processes, train supervisors on them, and handle the employment questions an injury raises. See the workplace practice and the trainings.

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