Information for Texas Nonsubscribers
Is Workers’ Compensation Coverage Required in Texas? The answer is NO! But there are some things every Texas employer should know.
- Texas, unlike other states, does not require an employer to have workers’ compensation coverage.
- Subscribing to workers’ compensation insurance puts a limit on the amount and type of compensation that an injured employee may receive – the limits are set in the law.
- Being a “non-subscriber”, i.e., going “bare” or without coverage, leaves an employer open to personal injury lawsuits from employees who are injured on the job – the damages and attorney’s fees are almost unlimited – in addition, certain defenses available in most personal injury lawsuits, such as assumption of the risk, contributory negligence, “last clear chance”, and co-worker negligence, are not available to a non-subscriber in a job injury case.
- At hire, notify each new hire of coverage (Notice 6 (PDF)) or non-coverage (Notice 5 (PDF)) and post the same notice along with other required workplace posters – also, let each new hire know that they have five days to elect to waive their right to workers’ compensation benefits and retain their common-law right to sue the employer for a work-related injury – the notice must let the employee know that if they give up workers’ compensation, they give up the right to receive medical or income benefits under the workers’ compensation law (the Division of Workers’ Compensation at the TDI has a form available for that purpose at http://www.tdi.state.tx.us/forms/dwc/newemployeenotice.pdf (PDF)).
- If an employer discontinues its workers’ compensation coverage, it must inform employees and the Workers’ Compensation Division of the Texas Department of Insurance as soon as possible via a Form DWC005 (PDF).
- Under workers’ compensation law, an injury or illness is covered, without regard to fault, if it was sustained in the course and scope of employment, i.e., while furthering or carrying on the employer’s business; this includes injuries sustained during work-related travel.
- Injuries are not covered if they were the result of the employee’s horseplay, willful criminal acts or self-injury, intoxication from drugs or alcohol, voluntary participation in an off-duty recreational activity, a third party’s criminal act if directed against the employee for a personal reason unrelated to the work, or acts of God.
- Injured workers must file injury reports within thirty days of the injury, must appeal the first impairment rating within 90 days of its issuance, and must file the formal paperwork for the workers’ compensation claim within one year of the injury. If the work-related nature of the injury or illness was not immediately apparent, those deadlines run from the date on which the employee should have known the problem was work-related.
- Three main types of benefits: medical benefits, income benefits, and death benefits – each type is statutorily defined and limited.
- The law places a heavy emphasis on return-to-work programs, since all studies show that recovery is faster and more efficient if an employee has some kind of useful work to do.
- An employee’s refusal of suitable light-duty work can stop the payment of workers’ compensation benefits.
- A job injury can involve other laws as well, such as the FMLA and the ADA – in multiple-law situations, whatever law provides the greatest protection should be applied (see “Medical Leave-Related Laws”).
- Chapter 451 of the workers’ compensation law prohibits discrimination or retaliatory action against employees who have filed workers’ compensation claims or are somehow in the process of doing so – stray remarks can be harmful to a company’s legal position in a Chapter 451 lawsuit, so never let anyone with your company be heard talking about a claim in terms of it being a problem, since any negative remarks can be twisted and spun to make the employer look as if it intended to retaliate against the claimant.
- Design your paid leave policies to avoid “benefits stacking”, i.e., the combining of workers’ compensation and leave-related benefits in such a way that the employee ends up getting more than 100% of his or her regular wage each week – for a sample policy, see “Limits on Leave Benefits” in “The A to Z of Personnel Policies” in this book.
- Employees on workers’ compensation do not have to be allowed to continue accruing leave or other benefits, but should be treated at least as favorably as other absent employees in that regard.
- Loss of health insurance benefits while on workers’ compensation leave is a COBRA-qualifying event.
- If a workers’ compensation claimant files an unemployment claim, he or she will be disqualified from unemployment benefits unless the workers’ compensation benefits are for “permanent, partial disability”, which translates to “impairment income benefits” under the current law – in addition, the claimant’s medical ability to work would be in question and should be raised by the employer as an issue in its response to the unemployment claim.
Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Fort Worth, Texas nonsubscriber defense attorneys in Tarrant County who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.