General Coverage Information and Employer Rights and Responsibilities

The information on this page is presented on Employer Fact Sheets available for downloading and printing by clicking on the links at the bottom of the page. 

Texas employers, except for public entities, can choose whether or not to provide workers' compensation insurance coverage for their employees. Workers' compensation provides covered employees with income and medical benefits if they are injured on the job or have a work-related injury or illness. Workers' compensation is regulated by the Texas Department of Insurance, Division of Workers' Compensation (the Division).

Participation in the workers' compensation system in Texas is voluntary for most employers. Employers who choose to have workers' compensation insurance may:

• purchase a workers' compensation insurance policy from a private insurance company;
  
• self-insure, if the employer can meet the requirements to self-insure under the Texas Workers' Compensation Act (the Act) and is certified through the Division;
  
• self -insure through the Texas Department of Insurance with a group of same or similar private employers; or.
  
• if a governmental entity, purchase a workers' compensation policy from a private insurance company, or self-insure either individually or as a group

With few exceptions, workers' compensation insurance limits the employer's liability for the work-related injury or death sustained by the worker.

For additional information, visit the Division's website for:

• Information regarding benefits that employees are eligible for
  www.tdi.state.tx.us/wc/information/benefits.html.
  
• Information regarding Employer Rights and Responsibilities
  www.tdi.state.tx.us/wc/information/employers.html
  
• Information about how to become self-insured through the Division
  www.tdi.state.tx.us/wc/information/employerresources.html

Covered Employer Rights

The Texas Workers' Compensation Act provides a covered employer the following rights:

• the right to contest the compensability of a workers' compensation claim (claim) if the employer's insurance carrier accepts liability. Contesting the compensability of a claim means the employer can present evidence in dispute resolution proceedings held at the Division and in court that indicates the employee's injury, illness, or death did not occur on the job or is not work-related.
  
• the right to receive notice, after making a written request to the insurance carrier, about any dispute resolution proceeding or court proceeding related to an employee's claim, or any proposal to settle the claim by an agreement.
  
• the right to attend all dispute resolution proceedings related to an employee's claim.
  
• the right to present relevant evidence about disputed issues at dispute resolution proceedings.
  
• the right to report suspected workers' compensation fraud to the Division or to the insurance carrier.
  
• the right to contest the failure of the insurance carrier to provide accident prevention services required by the Act.

For additional information regarding dispute resolution and a list of the Division's local offices in your area, visit the Division's website at www.tdi.state.tx.us/wc/information/dispute.html or www.tdi.state.tx.us/wc/dwccontacts.html.

To obtain the forms to dispute a claim (DWC-4 and DWC-45), visit the Division's website at www.tdi.state.tx.us/wc/forms/index.html.

Reimbursement of Voluntary Payments Made by an Employer [Section 408.003, Rule 126.13, 129.7]

Whether an employer may be reimbursed for voluntary payment of benefits paid to an injured worker depends on the type of payments made and when the payments were issued.

An employer is eligible for reimbursement of voluntary payment of benefits the employer has paid to an injured worker when:

• the carrier has denied liability for the injury, and the employer does not agree and the injury is determined compensable; or
  
• the carrier has not completed its initial investigation. (Please Note: an employer is only allowed to pay benefits in this situation for the first two weeks after the injury).

In the situations above, the employer must file the Employer's Report for Reimbursement of Voluntary Payment (DWC-2) detailing the total amount of voluntary payments made up to the point when the carrier notified the employer that they have accepted liability for the injury and have begun benefit payments. The carrier must reimburse the employer for the amount of benefits the carrier would have paid. If the employer made payments in excess of what the carrier would have paid in benefits, the excess amount is not reimbursable unless there is a written agreement between the injured worker and the employer that the excess amount can be recouped from future impairment income benefits paid by the carrier, if any.

An employer is not eligible for reimbursement of wages paid to continue the employee's full salary after an injury if the carrier has initiated benefits. An employer must ensure the carrier is aware the employer is paying full salary to the employee to prevent the carrier from paying Temporary Income Benefits (lost wage benefits) for the same time period. An employer who pays salary to supplement the difference between the 70 percent or 75 percent of the employee's average weekly wage that is being paid by the carrier is not entitled to and may not seek reimbursement from the employee or the carrier.

Covered Employer Responsibilities

An employer must report the following to its insurance carrier within eight (8) days of the date:

• an employee misses more than one day of work because of a work-related injury;
  
• an employer knows about an occupational disease or illness even if the employee has not missed any work; or
  
• an employee dies because of a work-related injury, or illness.

An employer may report the injury or illness to its insurance carrier by mail, fax, telephone, or electronic transmission and should keep a record of the date each injury is reported to its carrier.

An employer is required to provide a copy of the completed Employer's First Report of Injury or Illness, (DWC-1) to the injured worker at the same time the injury is reported to its insurance carrier. An employer must also provide a copy of "Injured Workers' Rights and Responsibilities" to the injured worker.

To view or print a copy of the Injured Workers' Rights and Responsibilities visit the Division's website at www.tdi.state.tx.us/wc/information/workerrights.html.

The insurance carrier and the employer may agree to have the insurance carrier send a copy of the Employer's First Report of Injury and Illness, (F 1) and Injured Workers' Rights and Responsibilities to the injured worker. However, an employer can be fined up to $500 per occurrence if the employer or the carrier fails to provide this information.

Employer's Wage Statement [Rule 120.4]

An employer is required to report an injured worker's wages and other fringe benefits (i.e. health premiums, uniform allowance, etc.) to the insurance carrier. The employer is required to send the Employer's Wage Statement (DWC-3) to the insurance carrier and the injured worker within 30 days of the date that income benefits begin to accrue (the 8th day missed from work). An employer is not required to send a copy of the wage statement to the Division unless the Division requests the statement.

Supplemental Report of Injury [Rule 120.3]

An employer must report any changes in an injured worker's pay or employment status to the insurance carrier. The employer must send the Supplemental Report of Injury (DWC-6), to the insurance carrier and the injured worker within:

• ten (10) days from the end of a pay period in which an injured worker's pay changes; and
  
• ten (10) days from the date an injured worker resigns or is terminated; and
  
• three (3) days from the date an injured worker returns to work; and
  
• three (3) days from the date an injury causes an employee to miss additional work after returning to work.
  

If an employer does not send the required forms, or does not send the forms on time, the employer could be fined up to $500 per occurrence.

Record-Keeping Responsibilities [Section 409.006, Rule 120.1]

An employer must keep a record of all work?related injuries, illnesses, and fatalities. The records must be kept for at least five (5) years from the last day of the year in which the injury, illness or fatality occurred, or for the period of time required by the Occupational Safety and Health Administration (OSHA), whichever is longer.

If these records are not kept, an employer could be fined up to $500 per occurrence.

Notice Responsibilities [Sections 409.043, 406.007, 406.034, Rules 110.101, 110.108]

Written notice must be posted in the workplace in English and Spanish and any other language that is appropriate telling employees that:

• the employer has workers' compensation insurance, and the workers' compensation insurance company's name;
• information regarding the Division's Ombudsman program; and
• the Division's toll-free telephone number to report unsafe work conditions.

The notice must be placed in the employer's personnel office (if any) and in a prominent place where employees can see it regularly. The notice must be in the wording and format adopted by the Division (Notice-6). To obtain Notice-6, visit the Division's website at www.tdi.state.tx.us/wc/forms/gentoc/html.

If the notice is not posted, the employer could be fined up to $1,000.

Notice to New Employees [Section 406.034, Rule 110.101]

An employer is required to give written notice of coverage to new employees upon hire and inform them of their right to reject workers' compensation coverage and retain their common law right of action. If at any time the coverage terminates and then the employer again obtains new coverage, the employer is required to give all employees this information in writing. To review the rule and obtain the required wording for this notice, visit the Division's website at www.tdi.state.tx.us/wc/rules/110.pdf.

The Division encourages an employer to keep a copy of the notice provided to each new employee. The notice may be signed and dated by the employer and the new employee.

If this notice is not provided to new employees, the employer could be fined up to $500 per occurrence.

Notice of Change in Coverage [Section 406.005, Rule 110.1]

An employer must give all employees written notice if the employer requests cancellation of the workers' compensation policy or if the insurance carrier cancels the policy. The notice must be given to all employees within 15 days from the date the request for cancellation was made or the date the employer receives notice from the insurance carrier that the carrier intends to cancel the policy.

If this notice is not provided to all employees, the employer could be fined up to $500 per occurrence.

Drug Policy (if required) [Section 411.091, Rules 169.1, 169.2]

If an employer has 15 or more employees, the Act requires the employer to have a policy to eliminate drug abuse in the workplace and a copy of the policy must be given to each employee.

For a free copy of the Division's Drug-Free Workplace Resource Guide, which includes information on developing a drug-free workplace policy, visit the Division's website at http://www.tdi.state.tx.us/wc/information/videoresources/drugfree.pdf; all 1-800-372-7713, extension 4622; or write to the Division's Health and Safety Resource Center at:

Texas Department of Insurance, Division of Workers' Compensation
7551 Metro Center Drive
Suite 100, MS-25
Austin, Texas 78744-1609

Administrative and Criminal Violations

Fraud [Sections 418.001, 418.002, 415.008]

An employer could be fined up to $5,000 and prosecuted for criminal fraud if the employer knowingly or intentionally commits an act to deny workers' compensation benefits to an injured worker who is legally entitled to receive benefits. An employer could also be liable for past payments and interest. For more information on workers' compensation fraud, visit the Division's website at www.tdi.state.tx.us/wc/information/fraud.html.

Chargebacks [Section 415.006]

An employer may not charge workers' compensation premiums back to its employees, either directly or indirectly.

If premiums are charged back to employees, an employer could be fined up to $1,000 per violation and the employees may also recover damages in court.

Misrepresentation of Payroll [Section 406.008(a)(2)]

An employer could be fined up to $5,000 per occurrence if intentionally misrepresenting payroll or providing false information to get lower insurance premiums. The employer can also be held liable for unpaid premiums.

Discrimination Against Injured Workers [Sections 451.001 - 451.003]

Texas law prohibits an employer from discharging or discriminating against an employee because the employee in good faith filed a workers' compensation claim, hired an attorney to represent the employee in a claim, or requested or testified in a workers' compensation proceeding. An employee may pursue legal action against the employer in court if the employer terminates employment or discriminates against the employee for any of these reasons.

Non-Covered Employers [Sections 406.001, 406.002, 406.004, 406.005, 406.033, Rules 110.101, 160.2]

Non-covered employers are employers who DO NOT have workers' compensation insurance coverage. Although a Texas employer may choose not to have coverage, non-covered employers must comply with certain workers' compensation requirements.

Notice of No Coverage [Section 406.007, Rule 110.101]

Employers who DO NOT have workers' compensation coverage must post written notice at their workplace telling their employees that they do not have workers' compensation insurance. This notice must be in English, Spanish, and any other language that is appropriate.

This notice must be placed in the employer's personnel office (if any) and in a prominent place where employees can see it regularly. The notice must be in the wording and format adopted by the Division (Notice-5). To obtain Notice-5, visit the Division's website at www.tdi.state.tx.us/wc/forms/index.html.

If this notice is not posted, an employer may be fined up to $500.

All employers who DO NOT have workers' compensation insurance must give written notice of non-coverage to new employees upon hire. To obtain the language that must be in this notice, visit the Division's website at www.tdi.state.tx.us/wc/rules/110.pdf.

The Division encourages all employers to keep a copy of the notice provided to each new employee. The notice may be signed and dated by the employer and the new employee.

If this notice is not provided to new employees, an employer could be fined up to $500 per occurrence.

Notice of Non-covered Employer Report of Injury, Illness, or Fatality

Non-covered employers that have more than four (4) employees are required to report to the Division:

• any work-related injuries that cause an employee to miss more than one (1) day of work,
• all occupational illnesses, and
• all fatalities that occur at the work place.

All employees are included under this requirement with the following exceptions:

• a domestic worker;
• casual worker engaged in employment incidental to a personal residence;
• certain farm and ranch workers; or
• workers covered by a method of compensation established under federal law.

Reportable injuries, illnesses, and fatalities must be filed with the Division monthly, using the Non-covered Employer's Report of Occupational Injury or Illness (DWC-7). The completed DWC-7 reporting all such injuries that have occurred during a calendar month must be filed no later than the seventh (7th) day of the month following the month of the occurrence. If there are no reportable injuries for a specific month, this report is not required.

To obtain a copy of the DWC-7 form and information for non-covered employers, visit the Division's website at http://www.tdi.state.tx.us/wc/forms/index.html

For more information, view the Employer Fact Sheets (PDF):

• Employer Rights
• Employer Responsibilities
• Non-Covered Employers

For more information contact: Webstaff@tdi.state.tx.us