Texas is unique.
In 49 of the 50 states, workers compensation is mandatory. Every employer must carry it. Every workplace injury claim runs through the workers comp system. The injured worker receives capped benefits (medical care, partial wage replacement, impairment income benefits). In exchange, the worker generally cannot sue the employer in tort.
Texas is the only state where this is not mandatory. Texas employers can opt out of workers comp — becoming "non-subscribers." When they do, the bargain changes dramatically:
- The worker keeps the right to sue the employer directly in tort
- The employer loses several key defenses under Tex. Lab. Code § 406.033
- The damages available to the worker are uncapped (subject only to ordinary tort principles)
This is why the question "was my employer a subscriber or a non-subscriber?" is the most important threshold question in every Texas workplace injury case.
Subscriber cases — workers comp.
When the employer is a subscriber, the workers compensation system governs the injury. The benefits are administered through the Texas Department of Insurance — Division of Workers' Compensation (DWC). The structure is:
Medical benefits
The worker is entitled to reasonable and necessary medical care, generally for the lifetime of the injury. Treatment is administered through the comp carrier's approved provider network in many cases.
Temporary income benefits (TIBs)
Replace a percentage of the worker's average weekly wage during the period of disability, subject to statutory weekly maximums.
Impairment income benefits (IIBs)
Triggered when the worker reaches maximum medical improvement (MMI) and is assigned an impairment rating. The IIB amount and duration is formulaic.
Supplemental income benefits (SIBs)
Available for some workers with 15%+ impairment ratings who cannot earn 80% of their pre-injury wage despite job search efforts.
Lifetime income benefits (LIBs)
Available only for catastrophic injuries — total blindness, total disability, traumatic brain injury with significant limitations, paraplegia, quadriplegia, severe burns covering most of the body.
Death benefits
Available to legal beneficiaries (spouse, minor children, dependent parents) in fatality cases, also formulaic and capped.
What's NOT available
Pain and suffering. Mental anguish. Punitive damages. Loss of consortium. These are all unavailable under workers comp. For a worker with a severe but not catastrophic injury, the total benefits over the life of the claim might be $50,000-200,000. For the same injury under a non-subscriber tort framework, the recovery could be $500,000-2,000,000+.
Non-subscriber cases — tort claim against the employer.
When the employer opted out of workers comp, the workplace injury becomes an ordinary tort claim. The worker sues the employer directly. The procedure is identical to a car accident case or any other negligence claim. The damages include:
- Past and future medical expenses (full amount, not capped)
- Past and future lost wages and earning capacity
- Pain and suffering — past and future
- Mental anguish — past and future
- Disfigurement, impairment, and loss of enjoyment of life
- Punitive damages where the employer's conduct involved gross negligence (subject to CPRC § 41.008 cap)
- Loss of consortium for a spouse
The § 406.033 defenses that don't apply
Tex. Lab. Code § 406.033 strips three traditional defenses from non-subscribers:
- Assumption of risk — the employer cannot defend by arguing the worker accepted the dangers inherent in the job.
- Contributory negligence — the employer cannot defend by arguing the worker was at fault. (Note: comparative fault under § 33.001 still applies in non-subscriber cases — a 51%+ at-fault worker still recovers nothing — but ordinary contributory negligence is eliminated.)
- Fellow servant rule — the employer cannot defend by blaming a co-worker.
The combined effect is that any negligence by the employer that contributed to the injury creates liability. The fact-finder doesn't get to subtract because of the worker's own conduct in most circumstances. This is why non-subscriber cases settle at much higher values than workers comp claims.
How to find out — subscriber or non-subscriber?
The Texas Department of Insurance — Division of Workers' Compensation maintains a publicly searchable database of every Texas employer's workers comp status. Your attorney can check this within minutes:
- Go to tdi.texas.gov
- Navigate to "Coverage Verification" or use the DWC "Texas Employers" lookup
- Enter the employer name
- The database returns subscriber status and (if subscriber) the comp carrier
This is one of the first things we check after being retained on a workplace injury case. The answer drives the entire case strategy.
Common non-subscriber industries.
Texas industries with high non-subscriber rates include:
- Oil and gas (oilfield services and operators) — many Permian Basin contractors are non-subscribers, particularly mid-size and large oilfield service companies.
- Construction — particularly smaller and mid-size subcontractors.
- Trucking and warehousing — many smaller fleet operators.
- Retail and food service — particularly some large retail chains and restaurant operators that have opted out.
- Manufacturing — selective.
- Home care and domestic services — frequently.
The largest non-subscribers in Texas include some of the largest employers — household-name companies — many of which have made a calculated business decision to opt out of comp, accept higher individual case exposure, but save the systemic cost of comp insurance.
Arbitration agreements — the wrinkle.
Some non-subscribers require employees to sign arbitration agreements as a condition of employment. These agreements require workplace injury claims to be resolved through binding arbitration rather than in court.
The enforceability of these agreements is heavily litigated:
- Was the agreement clear and conspicuous? Or buried in an employee handbook?
- Did the worker have the chance to meaningfully review it?
- Are the arbitration procedures fundamentally fair?
- Does the arbitration agreement cover the specific type of claim being made?
- Does the arbitration agreement require the worker to pay arbitration fees that effectively bar the claim?
Texas courts have struck down some non-subscriber arbitration agreements while enforcing others. A careful review of the specific agreement, the circumstances under which it was signed, and the procedural rules it imposes is part of every non-subscriber case where arbitration is asserted.