Why Are Texas Employers Continuing to Opt Out of Workers’ Comp?

In spite of a series of juries ruling against workers’ comp nonsubscribers last year, many employers are continuing to opt out of workers’ comp and face the risk of running into expensive lawsuits. For more than 100 years, the state of Texas has allowed employers to opt out of providing workers’ compensation. Most employers who do so, however, still provide alternative benefit plans that are not regulated by the state, therefore don’t usually provide the compensation injured workers require to recover. Yet, the general consensus is that businesses believe it is cheaper to settle costly lawsuits than it is to provide adequate workers’ comp to each employee.

Texas Businesses Settle Expensive Lawsuits, Rather Than Provide Benefits to Injured Workers

A sequence of liability lawsuits last year showed the type of risks employers are taking by choosing to opt out of providing workers’ comp to its employees. In January of 2015, the state’s 7th District required West Star Transportation Inc. to provide $5.3 million to an employee who sustained a traumatic brain injury. Eight months later, Katy Spring & Manufacturing Inc. was found guilty of negligence and was ordered to pay $780,000 to a worker who was hit in the chest by a large wire. In a prior blog, we reported an employee at Tyson Foods Inc. was awarded $2.5 million for being made to sort heavy boxes at work that caused a severe back injury.

In spite of these large settlements being made to injured workers, businesses are continuing to take the risk of opting out and gamble with liability.

If Texas Employers Provided Proper Safety and Benefits, They Would Not Pay Large Settlements

In the last 25 years, more than 100 businesses who opted out of workers’ comp have paid more than $1 million each (usually, a lot more). Typically, employers who do not subscribe to workers’ comp are supposed to provide particularly effective safety programs and provide access to quality doctors within good time constraints. However, this is not always the case. Texas has an inordinately large number of injured workers every year, and unfortunately, not all of them receive proper care or compensation during their injury.

The opt out system really doesn’t work for anyone involved. Numerous Texas businesses are paying expensive settlements and injured employees do not always receive proper compensation.

Aaron Allison is a personal injury attorney who helps victims of workplace injury in the Austin area.