Texas Labor Code -CHAPTER 406. WORKERS' COMPENSATION INSURANCE COVERAGE
Texas Workers Compensation Act
Title 5 - Texas Labor Code - Chapters 401-506
TABLE OF CONTENTS
LABOR CODE
CHAPTER 406. WORKERS' COMPENSATION INSURANCE COVERAGE
SUBCHAPTER A. COVERAGE ELECTION; SECURITY PROCEDURES
§ 406.001. DEFINITION. In this subchapter, "employer"
means a person who employs one or more employees.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
§ 406.002. COVERAGE GENERALLY ELECTIVE. (a) Except for
public employers and as otherwise provided by law, an employer may
elect to obtain workers' compensation insurance coverage.
(b) An employer who elects to obtain coverage is subject to
this subtitle.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
§ 406.003. METHODS OF OBTAINING COVERAGE. An employer
may obtain workers' compensation insurance coverage through a
licensed insurance company or through self-insurance as provided by
this subtitle.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
§ 406.004. EMPLOYER NOTICE TO DIVISION. (a) An employer
who does not obtain workers' compensation insurance coverage shall
notify the division in writing, in the time and as prescribed by
commissioner rule, that the employer elects not to obtain coverage.
(b) The commissioner shall prescribe forms to be used for
the employer notification and shall require the employer to provide
reasonable information to the division about the employer's
business.
(c) The division may contract with the Texas Workforce
Commission or the comptroller for assistance in collecting the
notification required under this section. Those agencies shall
cooperate with the division in enforcing this section.
(d) The employer notification filing required under this
section shall be filed with the division in accordance with Section
406.009.
(e) An employer commits an administrative violation if the
employer fails to comply with this section.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993. Amended
by Acts 1995, 74th Leg., ch. 76, § 9.47(a), eff. Sept. 1, 1995;
Acts 2005, 79th Leg., ch. 265, § 3.023, eff. Sept. 1, 2005.
§ 406.005. EMPLOYER NOTICE TO EMPLOYEES; ADMINISTRATIVE
VIOLATION. (a) An employer shall notify each employee as provided
by this section whether or not the employer has workers'
compensation insurance coverage.
(b) The employer shall notify a new employee of the
existence or absence of workers' compensation insurance coverage at
the time the employee is hired.
(c) Each employer shall post a notice of whether the
employer has workers' compensation insurance coverage at
conspicuous locations at the employer's place of business as
necessary to provide reasonable notice to the employees. The
commissioner may adopt rules relating to the form and content of the
notice. The employer shall revise the notice when the information
contained in the notice is changed.
(d) An employer who obtains workers' compensation insurance
coverage or whose coverage is terminated or canceled shall notify
each employee that the coverage has been obtained, terminated, or
canceled not later than the 15th day after the date on which the
coverage, or the termination or cancellation of the coverage, takes
effect.
(e) An employer commits an administrative violation if the
employer fails to comply with this section.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993. Amended
by Acts 2005, 79th Leg., ch. 265, § 3.024, eff. Sept. 1, 2005.
§ 406.006. INSURANCE COVERAGE AND CLAIM ADMINISTRATION
REPORTING REQUIREMENTS; ADMINISTRATIVE VIOLATION. (a) An
insurance company from which an employer has obtained workers'
compensation insurance coverage, a certified self-insurer, a
workers' compensation self-insurance group under Chapter 407A, and
a political subdivision shall file notice of the coverage and claim
administration contact information with the division not later than
the 10th day after the date on which the coverage or claim
administration agreement takes effect, unless the commissioner
adopts a rule establishing a later date for filing. Coverage takes
effect on the date on which a binder is issued, a later date and time
agreed to by the parties, on the date provided by the certificate of
self-insurance, or on the date provided in an interlocal agreement
that provides for self-insurance. The commissioner may adopt rules
that establish the coverage and claim administration contact
information required under this subsection.
(b) The notice required under this section shall be filed
with the division in accordance with Section 406.009.
(c) An insurance company, a certified self-insurer, a
workers' compensation self-insurance group under Chapter 407A, or a
political subdivision commits an administrative violation if the
person fails to file notice with the division as provided by this
section.
(d) In this section, "political subdivision" has the
meaning assigned by Section 504.001.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993. Amended
by Acts 1995, 74th Leg., ch. 76, § 9.48(a), eff. Sept. 1, 1995;
Acts 1999, 76th Leg., ch. 954, § 2; Acts 2005, 79th Leg., ch.
265, § 3.025, eff. Sept. 1, 2005.
§ 406.007. TERMINATION OF COVERAGE BY EMPLOYER;
NOTICE. (a) An employer who terminates workers' compensation
insurance coverage obtained under this subtitle shall file a
written notice with the division by certified mail not later than
the 10th day after the date on which the employer notified the
insurance carrier to terminate the coverage. The notice must
include a statement certifying the date that notice was provided or
will be provided to affected employees under Section 406.005.
(b) The notice required under this section shall be filed
with the division in accordance with Section 406.009.
(c) Termination of coverage takes effect on the later of:
(1) the 30th day after the date of filing of notice
with the division under Subsection (a); or
(2) the cancellation date of the policy.
(d) The coverage shall be extended until the date on which
the termination of coverage takes effect, and the employer is
obligated for premiums due for that period.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993. Amended
by Acts 1995, 74th Leg., ch. 76, § 9.49(a), eff. Sept. 1, 1995;
Acts 2005, 79th Leg., ch. 265, § 3.026, eff. Sept. 1, 2005.
§ 406.008. CANCELLATION OR NONRENEWAL OF COVERAGE BY
INSURANCE COMPANY; NOTICE. (a) An insurance company that cancels
a policy of workers' compensation insurance or that does not renew
the policy by the anniversary date of the policy shall deliver
notice of the cancellation or nonrenewal by certified mail or in
person to the employer and the division not later than:
(1) the 30th day before the date on which the
cancellation or nonrenewal takes effect; or
(2) the 10th day before the date on which the
cancellation or nonrenewal takes effect if the insurance company
cancels or does not renew because of:
(A) fraud in obtaining coverage;
(B) misrepresentation of the amount of payroll
for purposes of premium calculation;
(C) failure to pay a premium when due;
(D) an increase in the hazard for which the
employer seeks coverage that results from an act or omission of the
employer and that would produce an increase in the rate, including
an increase because of a failure to comply with:
(i) reasonable recommendations for loss
control; or
(ii) recommendations designed to reduce a
hazard under the employer's control within a reasonable period; or
(E) a determination made by the commissioner of
insurance that the continuation of the policy would place the
insurer in violation of the law or would be hazardous to the
interest of subscribers, creditors, or the general public.
(b) The notice required under this section shall be filed
with the division.
(c) Failure of the insurance company to give notice as
required by this section extends the policy until the date on which
the required notice is provided to the employer and the division.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993. Amended
by Acts 1995, 74th Leg., ch. 76, § 9.50(a), eff. Sept. 1, 1995;
Acts 2005, 79th Leg., ch. 265, § 3.027, eff. Sept. 1, 2005.
§ 406.009. COLLECTING AND MAINTAINING INFORMATION;
MONITORING AND ENFORCING COMPLIANCE. (a) The division shall
collect and maintain the information required under this subchapter
and shall monitor compliance with the requirements of this
subchapter.
(b) The commissioner may adopt rules as necessary to enforce
this subchapter.
(c) The commissioner may designate a data collection agent,
implement an electronic reporting and public information access
program, and adopt rules as necessary to implement the data
collection requirements of this subchapter. The commissioner may
establish the form, manner, and procedure for the transmission of
information to the division.
(d) The division may require an employer or insurance
carrier subject to this subtitle to identify or confirm an
employer's coverage status and claim administration contact
information as necessary to achieve the purposes of this subtitle.
(e) An employer or insurance carrier commits an
administrative violation if that person fails to comply with
Subsection (d).
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993. Amended
by Acts 1995, 74th Leg., ch. 76, § 9.51(a), eff. Sept. 1, 1995;
Acts 1999, 76th Leg., ch. 954, § 3, eff. Sept. 1, 1999; Acts
2005, 79th Leg., ch. 265, § 3.028, eff. Sept. 1, 2005.
§ 406.010. CLAIMS SERVICE; ADMINISTRATIVE
VIOLATION. (a) An insurance carrier shall provide claims service:
(1) through offices of the insurance carrier located
in this state; or
(2) by other resident representatives with full power
to act for the insurance carrier.
(b) Each insurance carrier shall designate persons to
provide claims service in sufficient numbers and at appropriate
locations to reasonably service policies written by the carrier.
(c) The commissioner by rule shall further specify the
requirements of this section.
(d) A person commits an administrative violation if the
person violates a rule adopted under this section.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993. Amended
by Acts 2005, 79th Leg., ch. 265, § 3.029, eff. Sept. 1, 2005.
§ 406.011. AUSTIN REPRESENTATIVE; ADMINISTRATIVE
VIOLATION. (a) The commissioner by rule may require an insurance
carrier to designate a representative in Austin to act as the
insurance carrier's agent before the division in Austin. Notice to
the designated agent constitutes notice to the insurance carrier.
(b) A person commits an administrative violation if the
person violates a rule adopted under this section.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993. Amended
by Acts 2005, 79th Leg., ch. 265, § 3.030, eff. Sept. 1, 2005.
§ 406.012. ENFORCEMENT OF SUBCHAPTER. The commission
shall enforce the administrative penalties established under this
subchapter in accordance with Chapter 415.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
SUBCHAPTER B. COVERAGE REQUIREMENTS
§ 406.031. LIABILITY FOR COMPENSATION. (a) An insurance
carrier is liable for compensation for an employee's injury without
regard to fault or negligence if:
(1) at the time of injury, the employee is subject to
this subtitle; and
(2) the injury arises out of and in the course and
scope of employment.
(b) If an injury is an occupational disease, the employer in
whose employ the employee was last injuriously exposed to the
hazards of the disease is considered to be the employer of the
employee under this subtitle.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
§ 406.032. EXCEPTIONS. An insurance carrier is not
liable for compensation if:
(1) the injury:
(A) occurred while the employee was in a state of
intoxication;
(B) was caused by the employee's wilful attempt
to injure himself or to unlawfully injure another person;
(C) arose out of an act of a third person intended
to injure the employee because of a personal reason and not directed
at the employee as an employee or because of the employment;
(D) arose out of voluntary participation in an
off-duty recreational, social, or athletic activity that did not
constitute part of the employee's work-related duties, unless the
activity is a reasonable expectancy of or is expressly or impliedly
required by the employment; or
(E) arose out of an act of God, unless the
employment exposes the employee to a greater risk of injury from an
act of God than ordinarily applies to the general public; or
(2) the employee's horseplay was a producing cause of
the injury.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
§ 406.033. COMMON-LAW DEFENSES; BURDEN OF PROOF. (a) In
an action against an employer who does not have workers'
compensation insurance coverage to recover damages for personal
injuries or death sustained by an employee in the course and scope
of the employment, it is not a defense that:
(1) the employee was guilty of contributory
negligence;
(2) the employee assumed the risk of injury or death;
or
(3) the injury or death was caused by the negligence of
a fellow employee.
(b) This section does not reinstate or otherwise affect the
availability of defenses at common law, including the defenses
described by Subsection (a).
(c) The employer may defend the action on the ground that
the injury was caused:
(1) by an act of the employee intended to bring about
the injury; or
(2) while the employee was in a state of intoxication.
(d) In an action described by Subsection (a) against an
employer who does not have workers' compensation insurance
coverage, the plaintiff must prove negligence of the employer or of
an agent or servant of the employer acting within the general scope
of the agent's or servant's employment.
(e) A cause of action described in Subsection (a) may not be
waived by an employee before the employee's injury or death. Any
agreement by an employee to waive a cause of action or any right
described in Subsection (a) before the employee's injury or death
is void and unenforceable.
(f) A cause of action described by Subsection (a) may not be
waived by an employee after the employee's injury unless:
(1) the employee voluntarily enters into the waiver
with knowledge of the waiver's effect;
(2) the waiver is entered into not earlier than the
10th business day after the date of the initial report of injury;
(3) the employee, before signing the waiver, has
received a medical evaluation from a nonemergency care doctor; and
(4) the waiver is in a writing under which the true
intent of the parties is specifically stated in the document.
(g) The waiver provisions required under Subsection (f)
must be conspicuous and appear on the face of the agreement. To be
conspicuous, the waiver provisions must appear in a type larger
than the type contained in the body of the agreement or in
contrasting colors.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993. Amended
by Acts 2001, 77th Leg., ch. 1456, § 16.01, eff. June 17, 2001;
Acts 2005, 79th Leg., ch. 265, § 3.031, eff. Sept. 1, 2005.
§ 406.034. EMPLOYEE ELECTION. (a) Except as otherwise
provided by law, unless the employee gives notice as provided by
Subsection (b), an employee of an employer waives the employee's
right of action at common law or under a statute of this state to
recover damages for personal injuries or death sustained in the
course and scope of the employment.
(b) An employee who desires to retain the common-law right
of action to recover damages for personal injuries or death shall
notify the employer in writing that the employee waives coverage
under this subtitle and retains all rights of action under common
law. The employee must notify the employer not later than the fifth
day after the date on which the employee:
(1) begins the employment; or
(2) receives written notice from the employer that the
employer has obtained workers' compensation insurance coverage if
the employer is not a covered employer at the time of the employment
but later obtains the coverage.
(c) An employer may not require an employee to retain
common-law rights under this section as a condition of employment.
(d) An employee who elects to retain the right of action or a
legal beneficiary of that employee may bring a cause of action for
damages for injuries sustained in the course and scope of the
employment under common law or under a statute of this state.
Notwithstanding Section 406.033, the cause of action is subject to
all defenses available under common law and the statutes of this
state.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
§ 406.035. WAIVER OF COMPENSATION PROHIBITED. Except as
provided by this subtitle, an agreement by an employee to waive the
employee's right to compensation is void.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
SUBCHAPTER C. COVERAGE THROUGH COMMERCIAL INSURANCE
§ 406.051. SECURITY BY COMMERCIAL INSURANCE. (a) An
insurance company may contract to secure an employer's liability
and obligations and to pay compensation by issuing a workers'
compensation insurance policy under this subchapter.
(b) The contract for coverage must be written on a policy
and endorsements approved by the Texas Department of Insurance.
(c) The employer may not transfer:
(1) the obligation to accept a report of injury under
Section 409.001;
(2) the obligation to maintain records of injuries
under Section 409.006;
(3) the obligation to report injuries to the insurance
carrier under Section 409.005;
(4) liability for a violation of Section 415.006 or
415.008 or of Chapter 451; or
(5) the obligation to comply with a commissioner
order.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993. Amended
by Acts 1999, 76th Leg., ch. 954, § 4, eff. Sept. 1, 1999; Acts
2005, 79th Leg., ch. 265, § 3.032, eff. Sept. 1, 2005.
§ 406.052. EFFECT OF OTHER INSURANCE COVERAGE. (a) A
contract entered into to indemnify an employer from loss or damage
resulting from an injury sustained by an employee that is
compensable under this subtitle is void unless the contract also
covers liability for payment of compensation under this subtitle.
(b) This section does not prohibit an employer who is not
required to have workers' compensation insurance coverage and who
has elected not to obtain workers' compensation insurance coverage
from obtaining insurance coverage on the employer's employees if
the insurance is not represented to any person as providing
workers' compensation insurance coverage authorized under this
subtitle.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
§ 406.053. ALL STATES COVERAGE. The Texas Department of
Insurance shall coordinate with the appropriate agencies of other
states to:
(1) share information regarding an employer who
obtains all states coverage; and
(2) ensure that the department has knowledge of an
employer who obtains all states coverage in another state but fails
to file notice with the department.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
SUBCHAPTER D. EXTRATERRITORIAL COVERAGE
§ 406.071. EXTRATERRITORIAL COVERAGE. (a) An employee
who is injured while working in another jurisdiction or the
employee's legal beneficiary is entitled to all rights and remedies
under this subtitle if:
(1) the injury would be compensable if it had occurred
in this state; and
(2) the employee has significant contacts with this
state or the employment is principally located in this state.
(b) An employee has significant contacts with this state if
the employee was hired or recruited in this state and the employee:
(1) was injured not later than one year after the date
of hire; or
(2) has worked in this state for at least 10 working
days during the 12 months preceding the date of injury.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
§ 406.072. PRINCIPAL LOCATION. The principal location of
a person's employment is where:
(1) the employer has a place of business at or from
which the employee regularly works; or
(2) the employee resides and spends a substantial part
of the employee's working time.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
§ 406.073. AGREEMENT ON PRINCIPAL LOCATION;
ADMINISTRATIVE VIOLATION. (a) An employee whose work requires
regular travel between this state and at least one other
jurisdiction may agree in writing with the employer on the
principal location of the employment.
(b) The employer shall file the agreement with the division
on request.
(c) A person commits an administrative violation if the
person violates Subsection (b).
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993. Amended
by Acts 2005, 79th Leg., ch. 265, § 3.033, eff. Sept. 1, 2005.
§ 406.074. INTERJURISDICTIONAL AGREEMENTS. (a) The
commissioner may enter into an agreement with an appropriate agency
of another jurisdiction with respect to:
(1) conflicts of jurisdiction;
(2) assumption of jurisdiction in a case in which the
contract of employment arises in one state and the injury is
incurred in another;
(3) procedures for proceeding against a foreign
employer who fails to comply with this subtitle; and
(4) procedures for the appropriate agency to use to
proceed against an employer of this state who fails to comply with
the workers' compensation laws of the other jurisdiction.
(b) An executed agreement that has been adopted as a rule by
the commissioner binds all subject employers and employees.
(c) In this section, "appropriate agency" means an agency of
another jurisdiction that administers the workers' compensation
laws of that jurisdiction.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993. Amended
by Acts 2005, 79th Leg., ch. 265, § 3.034, eff. Sept. 1, 2005.
§ 406.075. EFFECT OF COMPENSATION PAID IN OTHER
JURISDICTION. (a) An injured employee who elects to pursue the
employee's remedy under the workers' compensation laws of another
jurisdiction and who recovers benefits under those laws may not
recover under this subtitle.
(b) The amount of benefits accepted under the laws of the
other jurisdiction without an election under Subsection (a) shall
be credited against the benefits that the employee would have
received had the claim been made under this subtitle.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
SUBCHAPTER E. APPLICATION OF COVERAGE TO CERTAIN EMPLOYEES
§ 406.091. EXEMPT EMPLOYEES; VOLUNTARY COVERAGE. (a)
The following employees are not subject to this subtitle:
(1) a person employed as a domestic worker or a casual
worker engaged in employment incidental to a personal residence;
(2) a person covered by a method of compensation
established under federal law; or
(3) except as provided by Subchapter H, a farm or ranch
employee.
(b) An employer may elect to obtain workers' compensation
insurance coverage for an employee or classification of employees
exempted from coverage under Subsection (a)(1) or (a)(3).
Obtaining that coverage constitutes acceptance by the employer of
the rights and responsibilities imposed under this subtitle as of
the effective date of the coverage for as long as the coverage
remains in effect.
(c) An employer who does not obtain coverage for exempt
employees is not deprived of the common-law defenses described by
Section 406.033, but this section does not reinstate or otherwise
affect the availability of those or other defenses at common law.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
§ 406.092. ALIEN EMPLOYEES AND BENEFICIARIES. (a) A
resident or nonresident alien employee or legal beneficiary is
entitled to compensation under this subtitle.
(b) A nonresident alien employee or legal beneficiary, at
the election of the employee or legal beneficiary, may be
represented officially by a consular officer of the country of
which the employee or legal beneficiary is a citizen. That officer
may receive benefit payments for distribution to the employee or
legal beneficiary. The receipt of the payments constitutes full
discharge of the insurance carrier's liability for those payments.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
§ 406.093. LEGALLY INCOMPETENT EMPLOYEES. (a) The
guardian of an injured employee who is a minor or is otherwise
legally incompetent may exercise on the employee's behalf the
rights and privileges granted to the employee under this subtitle.
(b) The commissioner by rule shall adopt procedures
relating to the method of payment of benefits to legally
incompetent employees.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993. Amended
by Acts 2005, 79th Leg., ch. 265, § 3.035, eff. Sept. 1, 2005.
§ 406.094. CERTAIN PERSONS LICENSED BY TEXAS REAL ESTATE
COMMISSION. (a) An employer who elects to provide workers'
compensation insurance coverage may include in the coverage a real
estate salesperson or broker who is:
(1) licensed under Chapter 1101, Occupations Code;
and
(2) compensated solely by commissions.
(b) If coverage is elected by the employer, the insurance
policy must specifically name the salesperson or broker. The
coverage continues while the policy is in effect and the named
salesperson or broker is endorsed on the policy.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993. Amended
by Acts 2003, 78th Leg., ch. 1276, § 14A.788, eff. Sept. 1, 2003.
§ 406.095. CERTAIN PROFESSIONAL ATHLETES. (a) A
professional athlete employed under a contract for hire or a
collective bargaining agreement who is entitled to benefits for
medical care and weekly benefits that are equal to or greater than
the benefits provided under this subtitle may not receive benefits
under this subtitle and the equivalent benefits under the contract
or collective bargaining agreement. An athlete covered by such a
contract or agreement who sustains an injury in the course and scope
of the athlete's employment shall elect to receive either the
benefits available under this subtitle or the benefits under the
contract or agreement.
(b) The commissioner by rule shall establish the procedures
and requirements for an election under this section.
(c) In this section, "professional athlete" means a person
employed as a professional athlete by a franchise of:
(1) the National Football League;
(2) the National Basketball Association;
(3) the American League of Professional Baseball
Clubs;
(4) the National League of Professional Baseball
Clubs;
(5) the International Hockey League;
(6) the National Hockey League; or
(7) the Central Hockey League.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993. Amended
by Acts 1995, 74th Leg., ch. 668, § 1, eff. Sept. 1, 1995; Acts
2005, 79th Leg., ch. 265, § 3.036, eff. Sept. 1, 2005; Acts
2005, 79th Leg., ch. 815, § 1, eff. Sept. 1, 2005.
§ 406.096. REQUIRED COVERAGE FOR CERTAIN BUILDING OR
CONSTRUCTION CONTRACTORS. (a) A governmental entity that enters
into a building or construction contract shall require the
contractor to certify in writing that the contractor provides
workers' compensation insurance coverage for each employee of the
contractor employed on the public project.
(b) Each subcontractor on the public project shall provide
such a certificate relating to coverage of the subcontractor's
employees to the general contractor, who shall provide the
subcontractor's certificate to the governmental entity.
(c) A contractor who has a contract that requires workers'
compensation insurance coverage may provide the coverage through a
group plan or other method satisfactory to the governing body of the
governmental entity.
(d) The employment of a maintenance employee by an employer
who is not engaging in building or construction as the employer's
primary business does not constitute engaging in building or
construction.
(e) In this section:
(1) "Building or construction" includes:
(A) erecting or preparing to erect a structure,
including a building, bridge, roadway, public utility facility, or
related appurtenance;
(B) remodeling, extending, repairing, or
demolishing a structure; or
(C) otherwise improving real property or an
appurtenance to real property through similar activities.
(2) "Governmental entity" means this state or a
political subdivision of this state. The term includes a
municipality.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
§ 406.097. EXECUTIVE EMPLOYEES OF CERTAIN BUSINESS
ENTITIES. (a) A sole proprietor, partner, or corporate executive
officer of a business entity that elects to provide workers'
compensation insurance coverage is entitled to benefits under that
coverage as an employee unless the sole proprietor, partner, or
corporate executive officer is specifically excluded from coverage
through an endorsement to the insurance policy or certificate of
authority to self-insure.
(b) The dual capacity doctrine does not apply to a corporate
executive officer with an equity ownership in the covered business
entity of at least 25 percent and will not invalidate the exclusion
of such a corporate executive officer from coverage under
Subsection (a).
(c) A sole proprietor or partner of a covered business
entity or a corporate officer with an equity ownership in a covered
business entity of at least 25 percent may be excluded from coverage
under this section notwithstanding Section 406.096.
Added by Acts 1995, 74th Leg., ch. 980, § 1.20, eff. Sept. 1,
1995.
§ 406.098. VOLUNTEER EMERGENCY SERVICE MEMBERS AND
PERSONNEL. (a) An emergency service organization which is not a
political subdivision or which is separate from any political
subdivision may elect to obtain workers' compensation insurance
coverage for its named volunteer members who participate in the
normal functions of the organization. A person covered under this
subsection is entitled to full medical benefits and the minimum
compensation payments under the law.
(b) In this section, unless a different meaning is plainly
required by law:
(1) "Emergency service organization" means any
organization established to provide for the general public:
(A) fire prevention and suppression;
(B) hazardous materials response operations; or
(C) emergency medical services.
(2) "Volunteer members" means individuals who are
carried on the membership list of the organization as active
participants and who receive no remuneration for their services.
(3) "Normal functions" means any response to,
participation in, or departure from an incident scene; training;
meetings; performance of equipment maintenance; or organizational
functions.
(4) "Political subdivision" means a county,
municipality, special district, school district, junior college
district, housing authority, community center for mental health and
mental retardation services established under Subchapter A,
Chapter 534, Health and Safety Code, or any other legally
constituted political subdivision of the state.
(c) The commissioner of insurance shall adopt rules
governing the method of calculating premiums for workers'
compensation insurance coverage for volunteer members who are
covered pursuant to this section.
Added by Acts 1995, 74th Leg., ch. 849, § 1, eff. Aug. 28, 1995.
Renumbered from V.T.C.A., Labor Code § 406.097 by Acts 1997,
75th Leg., ch. 165, § 31.01(63), eff. Sept. 1, 1997. Amended by
Acts 2005, 79th Leg., ch. 265, § 3.037, eff. Sept. 1, 2005.
SUBCHAPTER F. COVERAGE OF CERTAIN INDEPENDENT CONTRACTORS
§ 406.121. DEFINITIONS. In this subchapter:
(1) "General contractor" means a person who undertakes
to procure the performance of work or a service, either separately
or through the use of subcontractors. The term includes a
"principal contractor," "original contractor," "prime contractor,"
or other analogous term. The term does not include a motor carrier
that provides a transportation service through the use of an owner
operator.
(2) "Independent contractor" means a person who
contracts to perform work or provide a service for the benefit of
another and who ordinarily:
(A) acts as the employer of any employee of the
contractor by paying wages, directing activities, and performing
other similar functions characteristic of an employer-employee
relationship;
(B) is free to determine the manner in which the
work or service is performed, including the hours of labor of or
method of payment to any employee;
(C) is required to furnish or to have employees,
if any, furnish necessary tools, supplies, or materials to perform
the work or service; and
(D) possesses the skills required for the
specific work or service.
(3) "Motor carrier" means a person who operates a
motor vehicle over a public highway in this state to provide a
transportation service or who contracts to provide that service.
(4) "Owner operator" means a person who provides
transportation services under contract for a motor carrier. An
owner operator is an independent contractor.
(5) "Subcontractor" means a person who contracts with
a general contractor to perform all or part of the work or services
that the general contractor has undertaken to perform.
(6) "Transportation service" means providing a motor
vehicle, with a driver under contract, to transport passengers or
property.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
§ 406.122. STATUS AS EMPLOYEE. (a) For purposes of
workers' compensation insurance coverage, a person who performs
work or provides a service for a general contractor or motor carrier
who is an employer under this subtitle is an employee of that
general contractor or motor carrier, unless the person is:
(1) operating as an independent contractor; or
(2) hired to perform the work or provide the service as
an employee of a person operating as an independent contractor.
(b) A subcontractor and the subcontractor's employees are
not employees of the general contractor for purposes of this
subtitle if the subcontractor:
(1) is operating as an independent contractor; and
(2) has entered into a written agreement with the
general contractor that evidences a relationship in which the
subcontractor assumes the responsibilities of an employer for the
performance of work.
(c) An owner operator and the owner operator's employees are
not employees of a motor carrier for the purposes of this subtitle
if the owner operator has entered into a written agreement with the
motor carrier that evidences a relationship in which the owner
operator assumes the responsibilities of an employer for the
performance of work.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
§ 406.123. ELECTION TO PROVIDE COVERAGE; ADMINISTRATIVE
VIOLATION. (a) A general contractor and a subcontractor may enter
into a written agreement under which the general contractor
provides workers' compensation insurance coverage to the
subcontractor and the employees of the subcontractor.
(b) If a general contractor has workers' compensation
insurance to protect the general contractor's employees and if, in
the course and scope of the general contractor's business, the
general contractor enters into a contract with a subcontractor who
does not have employees, the general contractor shall be treated as
the employer of the subcontractor for the purposes of this subtitle
and may enter into an agreement for the deduction of premiums paid
in accordance with Subsection (d).
(c) A motor carrier and an owner operator may enter into a
written agreement under which the motor carrier provides workers'
compensation insurance coverage to the owner operator and the
employees of the owner operator.
(d) If a general contractor or a motor carrier elects to
provide coverage under Subsection (a) or (c), then, notwithstanding
Section 415.006, the actual premiums, based on payroll, that are
paid or incurred by the general contractor or motor carrier for the
coverage may be deducted from the contract price or other amount
owed to the subcontractor or owner operator by the general
contractor or motor carrier.
(e) An agreement under this section makes the general
contractor the employer of the subcontractor and the
subcontractor's employees only for purposes of the workers'
compensation laws of this state.
(f) A general contractor shall file a copy of an agreement
entered into under this section with the general contractor's
workers' compensation insurance carrier not later than the 10th day
after the date on which the contract is executed. If the general
contractor is a certified self-insurer, the copy must be filed with
the division.
(g) A general contractor who enters into an agreement with a
subcontractor under this section commits an administrative
violation if the contractor fails to file a copy of the agreement as
required by Subsection (f).
(h) Notwithstanding Subsection (b), a person who performs
work or provides a service for an oil or gas well operator and who is
an independent contractor that has no employees shall be treated in
the same manner as an independent contractor with employees and is
not entitled to coverage under the general contractor's workers'
compensation insurance policy unless the independent contractor
and the general contractor enter into an agreement under this
section.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993. Amended
by Acts 1997, 75th Leg., ch. 88, § 1, eff. Sept. 1, 1997; Acts
2005, 79th Leg., ch. 265, § 3.038, eff. Sept. 1, 2005.
§ 406.124. CAUSE OF ACTION. If a person who has workers'
compensation insurance coverage subcontracts all or part of the
work to be performed by the person to a subcontractor with the
intent to avoid liability as an employer under this subtitle, an
employee of the subcontractor who sustains a compensable injury in
the course and scope of the employment shall be treated as an
employee of the person for purposes of workers' compensation and
shall have a separate right of action against the subcontractor.
The right of action against the subcontractor does not affect the
employee's right to compensation under this subtitle.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
§ 406.125. RESTRICTION OF UNSAFE WORK PRACTICES
UNAFFECTED. This subchapter does not prevent a general contractor
from directing a subcontractor or the employees of a subcontractor
to stop or change an unsafe work practice.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
§ 406.126. EXEMPTION. This subchapter does not apply to
farm or ranch employees.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
§ 406.127. EFFECT OF CERTAIN CONTRACTS OF HIRE. An
insurance company may not demand an insurance premium from an
employer for coverage of an independent contractor or an employee
of an independent contractor if the independent contractor is under
a contract of hire with the employer.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
SUBCHAPTER G. COVERAGE OF CERTAIN BUILDING AND CONSTRUCTION WORKERS
§ 406.141. DEFINITIONS. In this subchapter:
(1) "Hiring contractor" means a general contractor or
subcontractor who, in the course of regular business, subcontracts
all or part of the work to be performed to other persons.
(2) "Independent contractor" means a person who
contracts to perform work or provide a service for the benefit of
another and who:
(A) is paid by the job and not by the hour or some
other time-measured basis;
(B) is free to hire as many helpers as desired and
may determine the pay of each helper; and
(C) is free to, while under contract to the
hiring contractor, work for other contractors or is free to send
helpers to work for other contractors.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
§ 406.142. APPLICATION. This subchapter applies only to
contractors and workers preparing to construct, constructing,
altering, repairing, extending, or demolishing:
(1) a residential structure;
(2) a commercial structure that does not exceed three
stories in height or 20,000 square feet in area; or
(3) an appurtenance to a structure described by
Subdivision (1) or (2).
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
§ 406.143. PROVISION OF WORKERS' COMPENSATION INSURANCE;
INDEPENDENT CONTRACTOR WITHOUT EMPLOYEES. (a) Unless the
independent contractor and hiring contractor enter into an
agreement under Section 406.144, the independent contractor is
responsible for any workers' compensation insurance coverage
provided to an employee of the independent contractor, and the
independent contractor's employees are not entitled to workers'
compensation insurance coverage from the hiring contractor.
(b) An independent contractor without employees shall be
treated in the same manner as an independent contractor with
employees and is not entitled to coverage under the hiring
contractor's workers' compensation insurance policy unless the
independent contractor and hiring contractor enter into an
agreement under Section 406.144.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
§ 406.144. ELECTION TO PROVIDE COVERAGE; AGREEMENT. (a)
Except as provided by this section, a hiring contractor is not
responsible for providing workers' compensation insurance coverage
for an independent contractor or the independent contractor's
employee, helper, or subcontractor. An independent contractor and
a hiring contractor may enter into a written agreement under which
the independent contractor agrees that the hiring contractor may
withhold the cost of workers' compensation insurance coverage from
the contract price and that, for the purpose of providing workers'
compensation insurance coverage, the hiring contractor is the
employer of the independent contractor and the independent
contractor's employees.
(b) A hiring contractor and independent contractor may
enter into an agreement under Subsection (a) even if the
independent contractor does not have an employee.
(c) An agreement under this section shall be filed with the
division either by personal delivery or by registered or certified
mail and is considered filed on receipt by the division.
(d) The hiring contractor shall send a copy of an agreement
under this section to the hiring contractor's workers' compensation
insurance carrier on filing of the agreement with the division.
(e) An agreement under this section makes the hiring
contractor the employer of the independent contractor and the
independent contractor's employees only for the purposes of the
workers' compensation laws of this state.
(f) The deduction of the cost of the workers' compensation
insurance coverage from the independent contractor's contract
price is permitted notwithstanding Section 415.006.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993. Amended
by Acts 2005, 79th Leg., ch. 265, § 3.039, eff. Sept. 1, 2005.
§ 406.145. JOINT AGREEMENT. (a) A hiring contractor and
an independent subcontractor may make a joint agreement declaring
that the subcontractor is an independent contractor as defined in
Section 406.141(2) and that the subcontractor is not the employee
of the hiring contractor. If the joint agreement is signed by both
the hiring contractor and the subcontractor and filed with the
division, the subcontractor, as a matter of law, is an independent
contractor and not an employee, and is not entitled to workers'
compensation insurance coverage through the hiring contractor
unless an agreement is entered into under Section 406.144 to
provide workers' compensation insurance coverage. The
commissioner shall prescribe forms for the joint agreement.
(b) A joint agreement shall be delivered to the division by
personal delivery or registered or certified mail and is considered
filed on receipt by the division.
(c) The hiring contractor shall send a copy of a joint
agreement signed under this section to the hiring contractor's
workers' compensation insurance carrier on filing of the joint
agreement with the division.
(d) The division shall maintain a system for accepting and
maintaining the joint agreements.
(e) A joint agreement signed under this section applies to
each hiring agreement between the hiring contractor and the
independent contractor until the first anniversary of its filing
date, unless a subsequent hiring agreement expressly states that
the joint agreement does not apply.
(f) If a subsequent hiring agreement is made to which the
joint agreement does not apply, the hiring contractor and
independent contractor shall notify the division and the hiring
contractor's workers' compensation insurance carrier in writing.
(g) If a hiring contractor and an independent contractor
have filed a joint agreement under this section, an insurance
company may not require the payment of an insurance premium by a
hiring contractor for coverage of an independent contractor or an
independent contractor's employee, helper, or subcontractor other
than under an agreement entered into in compliance with Section
406.144.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993. Amended
by Acts 2005, 79th Leg., ch. 265, § 3.040, eff. Sept. 1, 2005.
§ 406.146. WRONGFUL INDUCEMENT PROHIBITED. (a) A hiring
contractor may not:
(1) wrongfully induce an employee to enter into a
joint agreement under Section 406.145 stating that the employee is
an independent contractor; or
(2) exert controls over an independent contractor or
an employee of an independent contractor sufficient to make that
person an employee under common-law tests.
(b) A hiring contractor does not exert employer-like
controls over an independent contractor or an independent
contractor's employee solely because of:
(1) controlling the hours of labor, if that control is
exercised only to:
(A) establish the deadline for the completion of
the work called for by the contract;
(B) schedule work to occur in a logical sequence
and to avoid delays or interference with the work of other
contractors; or
(C) schedule work to avoid disturbing neighbors
during night or early morning hours or at other times when the
independent contractor's activities would unreasonably disturb
activities in the neighborhood; or
(2) stopping or directing work solely to prevent or
correct an unsafe work practice or condition or to control work to
ensure that the end product is in compliance with the contracted for
result.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
SUBCHAPTER H. COVERAGE OF FARM AND RANCH EMPLOYEES
§ 406.161. DEFINITIONS. In this subchapter:
(1) "Agricultural labor" means the planting,
cultivating, or harvesting of an agricultural or horticultural
commodity in its unmanufactured state.
(2) "Family" means persons related within the third
degree by consanguinity or affinity.
(3) "Labor agent" means a person who:
(A) is a farm labor contractor for purposes of
the Migrant and Seasonal Agricultural Worker Protection Act (29
U.S.C. Section 1801 et seq.); or
(B) otherwise recruits, solicits, hires,
employs, furnishes, or transports migrant or seasonal agricultural
workers who work for the benefit of a third party.
(4) "Migrant worker" means an individual who is:
(A) employed in agricultural labor of a seasonal
or temporary nature; and
(B) required to be absent overnight from the
worker's permanent place of residence.
(5) "Seasonal worker" means an individual who is:
(A) employed in agricultural or ranch labor of a
seasonal or temporary nature; and
(B) not required to be absent overnight from the
worker's permanent place of residence.
(6) "Truck farm" means a farm on which fruits, garden
vegetables for human consumption, potatoes, sugar beets, or
vegetable seeds are produced for market. The term includes a farm
primarily devoted to one of those crops that also has incidental
acreage of other crops.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
§ 406.162. SCOPE. (a) This subtitle applies to an action
to recover damages for personal injuries or death sustained by a
farm or ranch employee who is:
(1) a migrant worker;
(2) a seasonal worker:
(A) employed on a truck farm, orchard, or
vineyard;
(B) employed by a person with a gross annual
payroll for the preceding year in an amount not less than the
greater of the required payroll for the year preceding that year,
adjusted for inflation, or $25,000; or
(C) working for a farmer, ranch operator, or
labor agent who employs a migrant worker and doing the same work at
the same time and location as the migrant worker; or
(3) an employee, other than a migrant or seasonal
worker:
(A) for years before 1991, employed by a person
with a gross annual payroll for the preceding year of at least
$50,000; and
(B) for 1991 and subsequent years, employed by a
person:
(i) with a gross annual payroll in an amount
required for coverage of seasonal workers under Subdivision (2)(B);
or
(ii) who employs three or more farm or ranch
employees other than migrant or seasonal workers.
(b) The comptroller shall prepare a consumer price index for
this state and shall certify the applicable index factor to the
division before October 1 of each year. The division shall adjust
the gross annual payroll requirement under Subsection (a)(2)(B)
accordingly.
(c) For the purposes of this section, the gross annual
payroll of a person includes any amount paid by the person to a
labor agent for the agent's services and for the services of migrant
or seasonal workers but does not include wages paid to:
(1) the person or a member of the person's family, if
the person is a sole proprietor;
(2) a partner in a partnership or a member of the
partner's family; or
(3) a shareholder of a corporation in which all
shareholders are family members or a member of the shareholder's
family.
(d) This subchapter does not affect the application or
interpretation of this subtitle as it relates to persons engaged in
activities determined before January 1, 1985, not to be farm or
ranch labor.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993. Amended
by Acts 2005, 79th Leg., ch. 265, § 3.041, eff. Sept. 1, 2005.
§ 406.163. LIABILITY OF LABOR AGENT; JOINT AND SEVERAL
LIABILITY. (a) A labor agent who furnishes a migrant or seasonal
worker is liable under this subtitle as if the labor agent were the
employer of the worker, without regard to the right of control or
other factors used to determine an employer-employee relationship.
(b) If the labor agent does not have workers' compensation
insurance coverage, the person with whom the labor agent contracts
for the services of the migrant or seasonal worker is jointly and
severally liable with the labor agent in an action to recover
damages for personal injuries or death suffered by the migrant or
seasonal worker as provided by this subtitle, and, for that
purpose, the migrant or seasonal worker is considered the employee
of the person with whom the labor agent contracts and that person
may obtain workers' compensation insurance coverage for that worker
as provided by this subtitle. If a migrant or seasonal worker is
covered by workers' compensation insurance coverage, the person
with whom the labor agent contracts is not liable in a separate
action for injury or death except to the extent provided by this
subtitle.
(c) A labor agent shall notify each person with whom the
agent contracts of whether the agent has workers' compensation
insurance coverage. If the agent does have workers' compensation
insurance coverage, the agent shall present evidence of the
coverage to each person with whom the agent contracts.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
§ 406.164. ELECTIVE COVERAGE OF EMPLOYER AND FAMILY
MEMBERS. (a) A person who purchases a workers' compensation
insurance policy covering farm or ranch employees may cover the
person, a partner, a corporate officer, or a family member in that
policy. The insurance policy must specifically name the individual
to be covered.
(b) The elective coverage continues while the policy is in
effect and the named individual is endorsed on the policy.
(c) A member of an employer's family is exempt from coverage
under the policy unless an election for that coverage is made under
this section.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
§ 406.165. NOT APPLICABLE TO INDEPENDENT
CONTRACTORS. (a) A farm or ranch employee who performs work or
provides a service for a farm or ranch employer subject to this
subchapter is an employee of that employer unless the employee is
hired to perform the work or provide the service as an employee of
an independent contractor.
(b) In this section, "independent contractor" means a
person, other than a labor agent, who contracts with a farm or ranch
employer to perform work or provide a service for the benefit of the
employer and who ordinarily:
(1) acts as the employer of the employee by paying
wages, directing activities, and performing other similar
functions characteristic of an employer-employee relationship;
(2) is free to determine the manner in which the work
or service is performed, including the hours of labor or the method
of payment;
(3) is required to furnish necessary tools, supplies,
or materials to perform the work or service; and
(4) possesses skills required for the specific work or
service.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
