As an employer in Texas, do I have to buy workers' compensation insurance for my employees?
In most cases, workers' compensation insurance is not required in Texas.
Texas employers, except for public entities, can choose whether or not to provide workers' compensation insurance coverage for their employees. Workers' compensation provides covered employees with income and medical benefits if they are injured on the job or have a work-related injury or illness. Workers' compensation is regulated by the Texas Department of Insurance, Division of Workers' Compensation (TDI-DWC).
Participation in the workers' compensation system in Texas is voluntary for most employers. Employers who choose to have workers' compensation insurance may:
- Purchase a workers' compensation insurance policy from a private insurance company;
- Self-insure, if the employer can meet the requirements to self-insure under the Texas Workers' Compensation Act (the Act) and is certified through TDI-DWC;
- Self -insure through the Texas Department of Insurance with a group of same or similar private employers; or
- If a governmental entity, purchase a workers' compensation policy from a private insurance company, or self-insure either individually or as a group
With few exceptions, workers' compensation insurance limits the employer's liability for the work-related injury or death sustained by the employee.
What are the benefits of buying a workers' compensation insurance policy?
By purchasing a workers' compensation policy, you and your employees will be protected. The policy will provide lost wages and medical benefits to your employees if they are injured on the job. Except in cases of gross negligence, workers' compensation insurance limits your liability if an employee brings suit against your business for damages.
How do I purchase a workers' compensation insurance policy?There are many insurance companies licensed to sell workers' compensation insurance, such as TDECU Insurance Agency. In addition, some employer's may have the option to be certified by TDI-DWC to self-insure.
What do I tell my employees about my workers’ compensation coverage for them? If I choose to not provide workers’ compensation insurance coverage for my employees, do I have any obligation to tell my employees or a government agency about it?
If you do not buy workers' compensation insurance, you are considered a "non-subscriber," and you must notify your employees that you do not have workers' compensation insurance. You are required to notify your employees by posting Notice 5, Notice to Employees Concerning Workers Compensation in Texas, at your work place, providing a telephone number to the Safety Violations Hotline for reporting unsafe work conditions.
This notice must be placed in your personnel office and/or in a prominent place where employees can see it regularly. You are also required to notify TDI-DWC that you choose to be a non-subscriber, or if you allow your coverage to lapse and you become a non-subscriber. Further, you must report your status as a non-subscriber each year.
Do I have any reporting requirements if one of my employees is injured?
If one of your employees is injured and you do not have workers' compensation insurance coverage and have more than four employees, you are required to complete and file the Non-covered Employer's Report of Occupational Injury or Illness (DWC Form-007) with TDI-DWC, to report all fatalities, occupational diseases of which you, the employer, has knowledge, and all work-related injuries resulting in more than one day's absence from work for the month prior to the filing date.
Are there other posting requirements for my workplace?
Various laws require employers to display several posters at the workplace. These posters are available, free of charge, from the applicable state and government agencies.A list of Texas Workforce Commission, U.S. Department of Labor Wage and Hour, Occupational Safety and Health Administration, and U.S. Equal Employment Opportunity Commission required postings can be found on the Texas Workforce Commission's web site.