This blog discusses both the pros and cons of becoming a non-subscriber in Texas, potential defense strategies for non-subscribers and the ever-evolving law governing non-subscribers.
Texas enacted its first workers’ compensation laws nearly a century ago. At that time, an employer’s participation in the workers’ compensation system was elective in most jurisdictions. However, after a United States Supreme Court ruling in 1917 held that compulsory participation in the workers’ compensation system did not violate an employer’s constitutional rights, most states enacted compulsory workers’ compensation laws mandating that employers offer workers’ compensation coverage to its employees. Texas did not. In Texas, providing workers’ compensation coverage remains optional for Texas employers.
In considering whether to become a non-subscriber in Texas, a company should consider both the benefits of opting out of the workers’ compensation system as well as the ramifications of doing so, especially from a litigation perspective.