Texas is the only state in the U.S. where employers are not required to carry workers’ compensation insurance. Instead, they can opt to become Texas non-subscriber employers, meaning they forgo the state-regulated workers’ comp system in favor of alternative injury benefit plans. This choice has significant financial and legal implications for businesses—and major consequences for employees who suffer workplace injuries.
Warren Armstrong of Armstrong Personal Injury Law specializes in representing injured workers in the DFW Metroplex whose employers are non-subscribers as a work injury attorney. Understanding why companies make this decision and how it affects employees is critical for protecting workers’ rights.
Why Employers Opt Out of Workers’ Compensation in Texas
Employers in Texas may choose to be non-subscribers for several reasons, often tied to cost savings and greater control over workplace injury claims. However, this decision shifts risks onto employees, who lose the automatic protections of workers’ comp.
Financial Incentives for Employers
- Lower costs. Workers’ compensation premiums can be expensive, especially for high-risk industries like construction or manufacturing. Non-subscriber employers often replace traditional coverage with cheaper, customized benefit plans that limit payouts.
- Avoiding state-mandated benefits. Texas workers’ comp provides guaranteed medical care and wage replacement for injured employees. Non-subscribers can design plans with stricter eligibility requirements or lower payouts.
- Reduced litigation risks. While workers’ comp generally prevents employees from suing their employers, non-subscribers lose this legal shield. However, many employers believe they can manage or dispute claims more effectively outside the system.
Legal Flexibility
- Custom injury benefit plans. Non-subscriber employers can create their own workplace injury policies, which may include arbitration clauses or limited appeal options for employees.
- Fewer regulatory requirements. Texas workers’ comp laws impose strict rules on claims processing and dispute resolution. Non-subscribers operate under less oversight, which can lead to delayed or denied benefits.
Despite these advantages for employers, opting out of workers’ comp carries risks—especially if an injured worker pursues a lawsuit.
How Non-Subscription Affects Employees
When a workplace injury occurs, employees of Texas non-subscriber employers face a different legal landscape than those covered by workers’ comp. Key differences include:
Loss of Automatic Benefits
- No guaranteed coverage. Under workers’ comp, employees receive medical care and partial wage replacement regardless of fault. Non-subscriber plans may deny claims if the injury is deemed “pre-existing” or not work-related.
- Limited dispute options. Many employer-sponsored plans require arbitration instead of court trials, making it harder for employees to challenge unfair denials.
Greater Burden of Proof
- Negligence claims become necessary. Since non-subscriber employees can’t access workers’ comp, they must prove their employer’s negligence caused their injury to recover damages. This might involve showing unsafe working conditions, lack of training, or failure to provide proper equipment.
- Longer legal battles. Unlike workers’ comp claims, which are typically resolved administratively, non-subscriber cases often require litigation, delaying compensation for injured workers.
Potential for Higher Recoveries
- Full damages may be available. While workers’ comp limits payouts to medical bills and a portion of lost wages, successful lawsuits against non-subscribers can include pain and suffering, full lost wages, and punitive damages in extreme cases.
Common Industries with Non-Subscriber Employers
Non-subscription is prevalent in certain Texas industries, including:
- Construction and oilfield work. High injury rates make workers’ comp costly, leading some employers to opt out.
- Retail and hospitality. Low-wage employers may prioritize cost-cutting over coverage.
- Healthcare. Some hospitals and nursing facilities use alternative benefit plans to reduce expenses.
What Injured Employees Should Do
If you’re hurt while working for a Texas non-subscriber employer, take these steps:
- Report the injury immediately. Delays can give employers grounds to deny your claim.
- Seek medical attention. Document all treatments and follow your doctor’s orders.
- Avoid signing employer-provided documents without legal review. Some forms may waive your right to sue.
- Consult an attorney. Warren Armstrong can help determine if negligence played a role in your injury and fight for fair compensation.
The Role of an Attorney in Non-Subscriber Cases
Since non-subscriber claims hinge on proving employer negligence, legal representation is crucial. Warren Armstrong investigates workplace conditions, gathers evidence, and negotiates with employers or insurers to secure:
- Medical expense coverage
- Lost wages (past and future)
- Compensation for pain and suffering
- Punitive damages in cases of gross negligence
Texas non-subscriber employers gain flexibility and cost savings by opting out of workers’ comp, but employees pay the price when injuries occur. Without the safety net of guaranteed benefits, injured workers must navigate complex legal battles to recover damages.
If you’ve been hurt at a non-subscriber workplace, Armstrong Personal Injury Law can help you understand your rights and pursue the compensation you may be entitled to.
