Workers' compensation insurance provides essential protection for both employers and employees in Texas. As a subscriber to workers' compensation insurance, a company pays an insurance provider a premium to cover potential work-related injuries. This means that if an employee were to be injured while on the job, say by tripping over a cord in the office, they would not sue the employer directly. Instead, they would file a workers' compensation claim to receive insurance benefits.
What is Workers' Compensation?
Workers' compensation is a form of insurance that provides wage replacement and medical benefits to employees injured while at work. In exchange, the employee gives up the right to sue the employer for negligence. In Texas, employers are not required to subscribe to workers' compensation insurance, but those who do not must follow strict guidelines under the Texas Labor Code, Section 406.005.
What Happens if the Employer Doesn't Have Workers' Compensation?
Texas is unique in that it allows employers to opt out of providing workers' compensation insurance. If an employer chooses not to carry this insurance, they must post a notice in a visible location at the workplace, typically in break rooms or other common areas, informing employees that they are a "non-subscriber." This notice is required by Texas Labor Code Section 406.005.
For employers who are non-subscribers, the legal implications are significant. If an employee is injured, they can file a personal injury lawsuit against the employer, potentially resulting in higher costs for the employer than what would have been covered by a workers' compensation claim.
Benefits of Workers' Compensation
- For Employees: Workers' compensation covers medical expenses and provides wage replacement for employees injured on the job. It simplifies the process for employees by providing a structured path to benefits without needing to go through the courts.
- For Employers: Employers who subscribe to workers' compensation insurance are protected from lawsuits. Injured employees must go through the insurance claims process rather than taking legal action against the employer. This protection offers peace of mind, reduces legal fees, and ensures a streamlined response to workplace injuries.
What Should Employers Do?
If you are an employer in Texas, it's important to decide whether to subscribe to workers' compensation insurance or not. If you choose not to subscribe, you must comply with posting requirements and be prepared for the potential of employee lawsuits. For businesses with higher risks of employee injuries, subscribing to workers' compensation insurance might be a cost-effective way to mitigate the financial and legal risks associated with workplace injuries.
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