Texas Guide · Updated 2026
Texas Workers' Compensation: The Non-Subscriber Choice
This is the single most distinctive feature of Texas employment law: workers' compensation is optional. Texas is the only state where a private employer can decline coverage.
Subscriber vs. non-subscriber
A subscribercarries workers'-compensation insurance and gets the usual trade-off: covered employees receive no-fault benefits and generally cannot sue for negligence. A non-subscriberdeclines coverage (Tex. Labor Code § 406.002).
What a non-subscriber gives up
A non-subscriber loses the common-law defenses— contributory negligence, assumption of risk, and the fellow-servant rule — in an employee injury suit. That often makes a single serious injury the employer's largest dollar exposure in Texas. Many non-subscribers adopt private occupational-injury benefit plans instead.
Required notices
A non-subscriber must file an annual notice of non-coveragewith the Texas Department of Insurance, Division of Workers' Compensation (DWC Form-005), post notice in the workplace, and notify employeesof the lack of coverage (Tex. Labor Code § 406.004–.005).
Reporting an injury
If you are a subscriber, an injured employee should report the injury to the employer within 30 days and file a claim within one year; report and process the claim through your carrier and the DWC. Government contracts may require coverage regardless of the non-subscriber option.
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