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Texas Workers Compensation at a Glance
Texas, unlike other states, does not require employers to carry Workers’ Compensation insurance in most cases. However, most employers in the state carry Workers' Compensation coverage for their employees because it helps to cover expenses for injured workers as well as protect businesses against lawsuits due to work injuries.
If your business contracts with Texas governmental agencies, you're required to provide Workers' Compensation coverage for your employees working on that project. Additionally, some contractors may require subcontractors or independent contractors to carry Workers’ Compensation coverage.
Texas employers who have chosen not to carry Workers' Compensation insurance must inform the state, employees, and new hires that the business does not carry Workers' Compensation coverage. Workers then retain the right to sue the employer for a broader range of damages due to work-related injuries. For this reason, most employers choose to carry coverage.
While Workers' Compensation coverage is not required in most cases for Texas employers, the state does require that employers notify the state each year of their election not to carry Workers' Compensation coverage. The employer may be assessed a penalty of up to $500 each day for non-compliance with this notification requirement.
Frequently Asked Questions
How much are Workers' Compensation benefits in Texas?
In Texas, temporary income paid by Workers' Compensation coverage is 70% of the worker’s earnings, with workers who earn less than $10 per hour compensated at a rate of 75% of their earnings. In all cases, there is a cap on temporary income amounts which changes annually.
Where Can Texas Employers Purchase Workers' Compensation?
Texas employers can purchase Workers' Compensation coverage locally or through an online vendor, such as CoverWallet, which provides expert guidance and the ability to bundle Workers' Compensation coverage with other essential insurance coverages. Texas Mutual Insurance company provides an additional option for Workers' Compensation coverage as the state fund for Texas.
What percentage of salary is paid on Workers' Compensation in Texas?
Texas law provides temporary income for disability due to work-related injuries at a rate 70% of the worker's earnings. Workers earning less than $10 per hour are compensated at a rate of 75%. Workers' Compensation income benefits are subject to a cap which can affect higher-income earners.
What does it mean that Texas is state funded?
To help ensure the availability of coverage, many states offer a separate insurer specifically to provide Workers' Compensation coverage or similar coverages. In Texas, Texas Mutual Insurance Company serves this role, providing coverage for about 40% of Texas's Workers' Compensation market.