Texas does not require employers to retain workers’ compensation insurance. Employers who opt not to purchase such policies are referred to as “non-subscriber employers.” If an employee suffers a personal injury or illness while working for a non-subscriber employer, the employer may be liable and exposed to legal action.
The Texas Labor Code permits employees to sue their employers for damages in a “non-subscriber” situation, thus serving the interests of employees who are not protected by workers’ compensation. An employer may be held accountable for damages from an employee’s injury even if the injured employee is partially at fault.
If the employer is found to be even slightly negligent, he or she could be found to be liable, opting not to carry workers’ compensation insurance. If an employee’s injury is the fault of a negligent co-worker, the employer may nevertheless be responsible for damage as a “non-subscriber.” In such co-worker cases, the injured party may be able to sue both the employer and the co-worker.
Recoverable damages include past and future lost wages, medical expenses, past and future impairment, mental anguish, and physical and emotional losses. In the event of a fatality, the Texas Labor Code permits an employee’s family to bring legal action against non-subscriber employers in a so-called wrongful death case.
If an employee suffers a personal injury while working for a non-subscriber employer, and the injury was caused by a negligent third party—someone other than the employer—the employee is entitled to claim damages from the third party.
For example, if an employee who is on the road in a company vehicle is struck by a negligent driver, Texas law permits him/her to file a claim and potentially bring a lawsuit against the negligent driver.
If an employee is injured on the job while using a tool or machine in the workplace, and the equipment is found defective or malfunctioning, a lawsuit may be filed against the product manufacturer or vender.
An employee who delivers a package to a third-party destination, and is injured on the property of the package recipient due to a foreseeable defect, may be allowed to bring legal action against the premise owner.
Third party liability cases are an important mechanism by which injured parties without workers’ compensation are empowered by law to seek compensations for injuries and losses.
Catastrophic Accident Insurance
Some employers who do not carry workers’ compensation insurance obtain other kinds of insurance coverage, some of which is intended to cover employees in the event of a catastrophic and unforeseen accident.
An employer who obtains workers’ compensation insurance through a program not approved by the state of Texas may not be protected from lawsuits, as is the case with state-regulated workers’ compensation. Approximately one-third of Texas employers carry no workers’ compensation insurance or have unofficial, non-state-approved insurance.
In the case of such policies, injured employees may be able to seek full damages in a lawsuit if their employers’ plan benefits are inadequate. Of critical importance in such legal action is the establishment of negligence, which is why competent representation from a personal injury attorney is essential.
Required Notification of Non-Subscription
Employers who do not retain workers’ compensation insurance must notify their employees in writing, both at the time of hiring and visibly in the workplace. The employer is required to provide a newly hired employee with written notice that no workers’ compensation insurance protects them while on the job.
Further, notice of non-coverage must be posted in the workplace in English and Spanish and “any other language that is appropriate.” 1 Employers who do not provide notice of non-coverage at the time of hiring a new employee and visibly in the workplace “will be held liable for any administrative violations.”
Required Reporting of Workplace Injuries
Non-covered employers with more than four employees are required to report any and all work-related injuries that cause an employee to miss more than one day of work, all occupational illnesses, and all fatalities that happen in the work place to the Division of Workers’ Compensation.
All employees are included under this requirement except domestic workers, casual workers engaged in work that relates to a personal residence, and certain farm and ranch workers.
1 Division of Workers’ Compensation, “Non-Covered Employers: Information for Employers from the Division of Workers’ Compensation,” LINK.