Workers’ Compensation Insurance in Houston, TX

Choosing not to carry workers’ comp does not take you off the state’s books. It puts you on them as a non-subscriber, with duties attached:

• File with DWC every year. Non-subscribers file DWC Form-005 between 1 February and 30 April, and again whenever they first drop or decline coverage. Missing the filing is an administrative violation under § 406.004.
• Post notices and tell new hires in writing. Notices go up in the workplace, and every new employee is told in writing that they are not covered by workers’ compensation.
• Report injuries to DWC. Work injuries involving more than a day of lost time, occupational illnesses, and deaths.

We say this whichever way you are leaning, because it is the part nobody mentions until it is late. Plenty of owners who came in certain they would stay non-subscribers changed their minds at the second bullet.

Source: TDI / DWC — employer resources and non-subscriber requirements. Verified 27 July 2026.

Construction is where the election stops being one employer’s decision. The general contractor’s policy, the sub’s policy and the Labor Code’s own default all meet on the same job, and the default is not the one most subs expect.

The default: a covered general contractor’s people include the sub’s. Under § 406.122, a person working for a general contractor that carries workers’ comp is that contractor’s employee for comp purposes, unless they are operating as an independent contractor or were hired by one. For a subcontractor and its crew to stay off the general contractor’s side, the sub has to do both: operate as an independent contractor, and sign a written agreement with the general contractor taking on the responsibilities of an employer for the work. Either one alone is not what the statute says.

Section 406.121 lists what an independent contractor ordinarily does:

• Employs their own people. Pays their wages and directs their work.
• Decides how the work gets done. Including the hours worked and the method of payment.
• Brings the tools. Furnishes, or has their employees furnish, the tools, supplies and materials the job uses.
• Has the skills the work needs.

The statute’s word is ordinarily. Meeting the list does not make someone an independent contractor, and whether a particular sub is one is a legal question about the facts of the job — not one this page can answer for you. The same subchapter says a general contractor may direct a sub or its employees to stop or change an unsafe work practice (§ 406.125), and it carries parallel rules for motor carriers and owner-operators.

When the general contractor provides the coverage. Section 406.123 lets a general contractor and a sub sign a written agreement under which the general contractor provides workers’ comp to the sub and the sub’s employees. The mechanics are specific:

• With a sub who has no employees, it is automatic. A general contractor that carries comp and contracts with a subcontractor who has no employees is treated as that sub’s employer for comp purposes. That is the statute’s doing, not a choice. Work for an oil or gas well operator is the stated exception: there, an independent contractor with no employees is covered only under an agreement.
• The premium can come off the contract price. Where the general contractor provides the coverage, the actual premium for it, based on payroll, may be deducted from the contract price or other amount owed to the sub. The agreement says whether it will be.
• It is for comp purposes only. The agreement makes the general contractor the sub’s employer under the workers’ compensation laws and for nothing else.
• A copy goes to the carrier within 10 days. The general contractor files it with its own workers’ comp carrier no later than the 10th day after the contract is executed — or with DWC, if the general contractor is a certified self-insurer. Missing the filing is an administrative violation, and DWC’s rule says an illegible or incomplete copy is not considered filed.
• Coverage starts no earlier than the signatures. Under 28 TAC § 112.101 the agreement is in writing, signed and dated by both, and states its term and the estimated number of workers. Coverage begins no sooner than the date it is signed, and no premium may be deducted for any time before that.

Subcontracting to avoid comp does not work. If an employer that has workers’ comp subcontracts work with the intent to avoid liability as an employer, an injured employee of that sub is treated as the employer’s employee for comp purposes, and keeps a separate right of action against the sub (§ 406.124). That section turns on the intent. The § 406.122 default above is the broader rule.

Home building and small commercial jobs have their own rules. Subchapter G covers contractors and workers preparing to build, building, altering, repairing, extending or demolishing a residential structure, a commercial structure of not more than three stories or 20,000 square feet, or an appurtenance to either (§ 406.142). It has its own independent-contractor test: paid by the job rather than by the hour, free to hire as many helpers as they want and set their pay, and free to work for other contractors at the same time (§ 406.141). Within it:

• A sub with no employees is not covered by default. An independent contractor without employees is not entitled to coverage under the hiring contractor’s policy unless the two sign a § 406.144 agreement, under which the hiring contractor withholds the cost of coverage from the contract price and is the employer for comp purposes only, and sends a copy to its carrier (§§ 406.143, 406.144).
• A joint agreement settles status for a year. A joint agreement declaring the sub an independent contractor, signed by both and filed with DWC, makes the sub an independent contractor as a matter of law until the first anniversary of its filing. Once it is filed, an insurer may not require premium from the hiring contractor for that sub’s coverage, except under a § 406.144 agreement (§ 406.145).

That is a separate set of rules from the ones above, and a job can look as though it fits both. Which governs a particular job is a question for a phone call with the contract in hand, not for a web page.

What your own policy charges for. The Labor Code bars an insurer from demanding premium from an employer for coverage of an independent contractor, or an independent contractor’s employee, who is under a contract of hire with that employer (§ 406.127). Whether a given sub is one is the § 406.121 question again. Beyond the statute, the answer is in your policy: ask how its audit treats subcontractors who cannot show their own certificate. And remember what a certificate is — evidence that a policy exists, not the policy itself.

Sources: Tex. Labor Code ch. 406, subchapter F — §§ 406.121–406.127; subchapter G — §§ 406.141–406.145; 28 TAC § 112.101 — DWC compiled rules, pp. 30–31. Verified 28 September 2026.

On public building work, the rule reaches everyone on the site. DWC’s rule for a governmental entity’s building and construction contracts, 28 TAC § 110.110, requires coverage for every person providing services on the project, whether or not they contracted directly with the contractor and whether or not they have employees. That includes independent contractors, subcontractors, leasing companies, motor carriers and owner-operators, and “services” includes hauling or delivering equipment or materials. The rule’s own examples of what falls outside are food and drink vendors, office-supply deliveries and portable-toilet delivery. The contractor’s duties:

• A certificate before work starts. The contractor gives the governmental entity a certificate of coverage before beginning work, covering the project until the entity has completed and accepted it, and a new one before the current coverage period ends if it expires mid-project.
• A certificate from everyone below it. It collects a certificate from each person providing services before that person starts work, passes it to the entity, and passes on renewed certificates within seven days of receiving them.
• Changes in writing within ten days. By certified mail or personal delivery, within ten days after the contractor knew or should have known of any change that materially affects anyone’s coverage.
• A notice posted on every site. DWC’s Notice 8, in English and Spanish and any other language common to the workforce, telling everyone on the project that they must be covered and how to verify coverage and report a failure to cover.
• The same duties in every subcontract. So they flow down each tier.
• Records kept. The contractor keeps every certificate for the project and one year after. The governmental entity keeps them for the project and three years after.

Handing over a certificate on a public job is itself a representation: that every employee on the project is covered, and that the coverage rests on properly reported class codes and payroll. A false or misleading certificate, or failing to provide or maintain one or to report a material change, can bring administrative, criminal or civil penalties. The rule is limited to building and construction contracts for a governmental entity. It does not reach private jobs.

Sources: 28 TAC § 110.110 — DWC compiled rules, pp. 24–30; DWC Notice 8 (Rev. 12/15). Verified 28 September 2026.

Some sellers pitch non-subscriber “injury benefit plans”, or coverage from companies not licensed in Texas. The Texas Department of Insurance is blunt about these: an alternative policy bought from an unlicensed company does not count as workers’ compensation under state law. You keep the lawsuit exposure, benefits are limited to whatever the contract says, and there is no state guaranty backing behind it.

And if you have been declined everywhere, Texas keeps a door open: Texas Mutual was created by the legislature as the insurer of last resort, and an employer who cannot find coverage elsewhere can buy from it. We will tell you honestly which path fits before you spend another afternoon on hold.

Source: TDI — workers’ compensation insurance (cb030). Verified 27 July 2026.

Workers’ comp questions we get every week

Is workers’ compensation required in Texas?

For most private employers, no — coverage is elective under Labor Code § 406.002. But a governmental entity’s building or construction contract has to require it (§ 406.096), and DWC’s rule extends that to everyone providing services on the project (28 TAC § 110.110). Many private contracts demand it too, and electing out means losing key legal defenses if an employee is hurt and sues.

Do subcontractors need workers’ comp in Texas?

Not as a general rule — comp is elective for most private employers, and a sub is no different from the general contractor there (§ 406.002). What usually decides it is the job. Many general contractors ask for a certificate in the subcontract. On public building work, DWC’s rule requires coverage for everyone providing services on the project. And if the general contractor carries comp, the Labor Code treats the sub’s workers as the general contractor’s employees for comp purposes unless the sub operates as an independent contractor and has signed a written agreement taking on the employer’s responsibilities (§ 406.122). Home building and small commercial jobs run under a separate set of rules. The detail is in the contractors section above.

What happens if an employee is hurt and I don’t have workers’ comp?

The employee can sue you for damages. Under § 406.033 you cannot argue their own carelessness, their acceptance of the risk, or a co-worker’s fault — the employee needs to prove only ordinary negligence, and a waiver signed before the injury does not hold. With coverage in place, benefits are generally the exclusive remedy instead.

Do owners and officers have to be covered?

Texas lets certain executives and business owners make their own election about being included in coverage. The mechanics depend on how the business is set up, which makes it a two-minute question on the phone and a bad one to guess at from a web page.

Does my staffing agency, trucking company, or restaurant need workers’ comp?

Usually your contracts answer before the law does — clients, shippers, staffing agreements and franchise agreements require it routinely. What the industry changes is the class codes and the pricing, not the legal framework. Tell us what the business does and we quote it accordingly.

How fast can I get proof of coverage for a contract?

Tell us the deadline the contract set and we work to it. Quoting needs your headcount, your payroll and what the business does; certificates come from the same desk once the policy is placed.