Can You Sue a Workers’ Comp Non-Subscriber Employer for Injuries?

Without workers’ compensation coverage in Texas, an employer is directly liable for on-the-job injuries. It can mean opening the doors wider for more extensive compensation by an employee: medical expenses, lost income, and even pain and suffering. The Law Offices of Aaron Allison guide injured workers through Texas non-subscriber vs. workers’ compensation cases to get them the results they need and deserve.

Can I sue a workers comp non-subscriber after a work-related injury? Austin work injury attorney Aaron Allison explains in this video. For more information, call (512) 474-8346.

Video Transcription:

The Texas legislature developed a special clause in the labor code called 406.033. Which is called the non-subscriber statute. What the legislature said was that all employers in Texas can be non-subscribers. They can opt out. But they can be sued for negligence and they are stripped of the defenses of comparative negligence. So, in those situations, you have a non-subscriber case, an injured employee, if they can prove them employer was just a degree of negligent in how they were injured, the employer is 100 percent responsible for that injury. And that was intended to be a poison pill that the legislature inserted into the law to persuade Texas employers to become subscribers. If you’re injured on the job for a non subscribing employer, most of the non subscribing employers will have what is called an injured employee plan. It’s a type of insurance that they buy and it looks very much like and operates very much like real workers comp insurance. Now, those employers, for non-subscribers, they own those injured employee plans, they fund them and they administer them, so they have a lot of control over those plans and a lot of times there are disputes and/or denials for medical services or lost wages to the injured worker under those plans. Another key difference in the law is that a non subscribing employer can be sued by the employee. If the employer has workers comp insurance, they can never be sued by an employee. It’s called the exclusive remedy provision. It completely bars a claim of negligence against a subscribing employer. For more information, go to AaronAllisonLawFirm.com.

Can You Sue an Employer Who Isn’t Subscribed to Workers’ Comp Insurance?

Defining a Texas Worker’s Comp Non-Subscriber

A Texas workers’ compensation non-subscriber is an employer who opts out of the state’s workers’ compensation insurance program and assumes direct liability for negligence-related workplace injuries. To declare their status, employers must file a Non-Subscriber Notice Form with the Texas Department of Insurance. This filing serves to provide transparency and inform employees about their employer’s coverage status, as well as clarify the rights of those seeking compensation. It also enables regulatory oversight to ensure that non-subscribers meet basic requirements or accept associated risks.

Process Overview

Employers that are non-subscribers may establish their own occupational injury benefit plans in lieu of workers’ compensation. These unregulated plans differ tremendously in benefits and often require injured workers to show the employer’s negligence in a personal injury suit. Pain and suffering and punitive damages can be requested in nonsubscriber cases, whereas nondiscriminatory damages are not available under workers’ compensation. 

Overview of the Non-Subscriber Statute

The non-subscriber statute is an alternative system that enables Texas employers to opt out of workers’ compensation. It is established by Section 406.002 of the Texas Labor Code. It may lessen insurance costs to employers, but raises the potential liability for them in light of workplace injuries. Since there is no uniformity afforded to such plans, it leaves open great variation in what protections are offered to employees, often requiring litigation before workers receive appropriate recompense. 

Reasons Companies Opt Out

Many companies will drop out of workers’ compensation insurance purely for financial reasons. Some of the key reasons include the high costs of the insurance premium, sometimes a heavy burden, especially to businesses in industries with higher injury rates, such as construction or manufacturing. By dropping out of the insurance program with their plans to provide benefits for injuries, employers start wanting to avoid that cost and be able to engage the claims process on their own terms, offering their benefits and dealing with disputes internally. Such flexibility may benefit the employer, but it could leave employees having to navigate far more convoluted and far less systematic processes of claims calls. 

Understanding Injured Employee Plans

Injured employee plans are occupational benefit plans offered by non-subscribed employers as a substitute for workers’ compensation. These plans may cover medical expenses, income replacement, and rehabilitation but do not have regulatory agency oversight, resulting in extensive variations in wording and fewer protections. Employers often create these plans to limit financial exposure, thus presenting challenges to employees in fighting for full compensation. Injured workers often face complex claiming processes and would need legal assistance to protect their rights. 

Understanding the Exclusive Remedy Provision

An exclusive remedy provision is a clause within the workers’ compensation laws preventing subscribing employers from facing antinomy lawsuits against employee injuries. This means that the injured party covered under workers’ compensation cannot file lawsuits against the employer, even due to imaginable negligence. With regard to Texas Labor Code Section 408.001, the exceptions to this provision are incorporated for non-subscribers only. Employees of non-subscribers, however, maintain the right to sue for personal injury and to recover better compensation than that which workers’ compensation provides. This is the critical indicator of the impending risks with which non-subscribing employers will have to contend, and the importance of these rights would need to be appreciated in filing claims of workplace injuries. 

How Do Workers’ Comp and Non-Subscriber Claims Differ?

Workers’ Compensation Claim

Workers’ compensation claims are generally no-fault claims that cover medical expenses, compensation for lost wages, and disability benefits for pain and suffering. Because of the exclusive remedy provision, employees cannot sue their employers for liability; they must limit their legal recourse to these predefined benefits.

Non-Subscriber Claim

Essentially, the potent course for non-subscriber claims involves the necessity of proving employer negligence, encompassing larger awards due to pain and suffering, medical expenses, lost wages, and potentially punitive damages in cases concerning gross negligence. Such cases usually involve so much legal complexity that the necessity of representation by a legal professional is critical to duly pursuing a fair outcome. 

Industries with High Numbers of Non-Subscribers

Industries like construction, retail, and hospitality would typically have non-subscriber employers because workers’ compensation premiums were regarded as high. Given the physical demands of their workplaces and the high risk for workplace injuries, such businesses often look to reduce their costs and take more control over the processes dealing with injury claims. Although this can help business cost management, the majority of risk tends to be shifted onto employees in the process. 

Comparing Non-Subscriber and Workers’ Compensation Benefits

Not allowing symptoms to manifest allows the employee to know a wide range of damages, such as full medical expenses, unlimited lost wages, pain and suffering, and punitive damages in case of gross negligence. On the contrary, worker injuries provide limited benefits for treatment-related expenses and income benefits for a short period. No additional compensation for pain and suffering is offered. It prioritizes quick provision for medical expenses and wages, purposely excluding compensation for non-economic damages. Non-subscriber cases may involve more issues, yet they require proof on the employee’s part as to the employer’s behavior, which obviously is likely to garner objections without expert legal representation. 

How Our Legal Team Can Help

At The Law Offices of Aaron Allison, we specialize in representing injured workers for Austin, TX, for anything pertaining to non-subscriber employers. Our firm understands the nuances of Texas non-subscriber vs. workers’ compensation matters, and we labor relentlessly to see that you get the compensation you deserve. Call us today to schedule a consultation to learn how we can fight for your rights.

Aaron Allison, Attorney

For 50 years, my father, served as a trial lawyer to get just compensation for the people of Austin. At age 14, I began to take up the mantle to continue my father’s practice as a second generation trial lawyer serving Austin’s community. The strength of his legacy continues through its commitments to a communal presence, honoring that each case is as unique as the individual pursuing compensation.

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