Labor & Employment

Workers' Compensation

One of the great advantages of doing business in Texas is the choice most employers have concerning whether or not to carry workers' compensation insurance. The Texas Labor Code makes workers' compensation insurance optional in two ways: (1) an employer can be self-insured (remaining under the rules and regulations of the workers' compensation laws but essentially acting as a self-insurer), or (2) becoming what is termed a "non-subscriber" – that is, doing without workers' compensation insurance entirely. Employers of approximately ⅓^rd of the employees in Texas "opt out" of the system, choosing to either take on that entire risk or by purchasing an alternative type of insurance coverage and perhaps even establishing their own (sometimes better or higher) benefits for employees who are injured on the job. Some non-subscribers feel that the level of freedom and control is greater and some feel the benefits they can offer employees are superior outside the system. Some employers who opt out of the no-fault workers' compensation system, which is mandatory in every state except Texas, report a greater sense of conflict avoidance, internal control over fraudulent claims and the lack of government impositions. Others feel the risks are too great and choose to stay in the no-fault, state-controlled workers' compensation arena. You may wish to contact an attorney licensed in Texas for advice on these alternatives and the risks involved. Alternatively contacting the Texas Association of Responsible Non Subscribers, the Texas Association of Business, The Texas Department of Insurance or The Texas Alliance of NonSubscribers may be of assistance.

The Texas Workers' Compensation Commission publishes a new law guide, a quarterly newsletter, and an information brochure for employers to help them become more familiar with the basic requirements for workers' compensation in Texas. To request these publications, contact:

For information on workers' compensation classifications groups, contact:

Texas Department of Insurance Division of Workers' Compensation
7551 Metro Center Drive, Suite 100
Austin, Texas 78744-1609
512-804-4000

Texas Department of Insurance
333 Guadalupe
Austin, Texas 78701
512/322-3493