CHAPTER 406. WORKERS' COMPENSATION INSURANCE COVERAGE
LABOR CODE
TITLE 5. WORKERS' COMPENSATION
SUBTITLE A. TEXAS WORKERS' COMPENSATION ACT
CHAPTER 406. WORKERS' COMPENSATION INSURANCE COVERAGE
SUBCHAPTER A. COVERAGE ELECTION; SECURITY PROCEDURES
Sec. 406.001. DEFINITION. In this subchapter, "employer" means
a person who employs one or more employees.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Amended by Acts 1995, 74th Leg., ch. 76, Sec. 9.47(a), eff. Sept.
1, 1995.
Amended by:
Acts 2005, 79th Leg., Ch.
265, Sec. 3.023, eff. September 1, 2005.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Amended by:
Acts 2005, 79th Leg., Ch.
265, Sec. 3.024, eff. September 1, 2005.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Amended by Acts 1995, 74th Leg., ch. 76, Sec. 9.48(a), eff. Sept.
1, 1995; Acts 1999, 76th Leg., ch. 954, Sec. 2.
Amended by:
Acts 2005, 79th Leg., Ch.
265, Sec. 3.025, eff. September 1, 2005.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Amended by Acts 1995, 74th Leg., ch. 76, Sec. 9.49(a), eff. Sept.
1, 1995.
Amended by:
Acts 2005, 79th Leg., Ch.
265, Sec. 3.026, eff. September 1, 2005.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Amended by Acts 1995, 74th Leg., ch. 76, Sec. 9.50(a), eff. Sept.
1, 1995.
Amended by:
Acts 2005, 79th Leg., Ch.
265, Sec. 3.027, eff. September 1, 2005.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Amended by Acts 1995, 74th Leg., ch. 76, Sec. 9.51(a), eff. Sept.
1, 1995; Acts 1999, 76th Leg., ch. 954, Sec. 3, eff. Sept. 1,
1999.
Amended by:
Acts 2005, 79th Leg., Ch.
265, Sec. 3.028, eff. September 1, 2005.
Sec. 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. If an
insurance carrier uses the services of a person required to hold
a certificate of authority under Chapter 4151, Insurance Code,
the carrier must comply with the requirements of that chapter.
(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, Sec. 1, eff. Sept. 1, 1993.
Amended by:
Acts 2005, 79th Leg., Ch.
265, Sec. 3.029, eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch.
1176, Sec. 3.01, eff. September 1, 2007.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Amended by:
Acts 2005, 79th Leg., Ch.
265, Sec. 3.030, eff. September 1, 2005.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
SUBCHAPTER B. COVERAGE REQUIREMENTS
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Amended by Acts 2001, 77th Leg., ch. 1456, Sec. 16.01, eff. June
17, 2001.
Amended by:
Acts 2005, 79th Leg., Ch.
265, Sec. 3.031, eff. September 1, 2005.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
SUBCHAPTER C. COVERAGE THROUGH COMMERCIAL INSURANCE
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Amended by Acts 1999, 76th Leg., ch. 954, Sec. 4, eff. Sept. 1,
1999.
Amended by:
Acts 2005, 79th Leg., Ch.
265, Sec. 3.032, eff. September 1, 2005.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
SUBCHAPTER D. EXTRATERRITORIAL COVERAGE
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Amended by:
Acts 2005, 79th Leg., Ch.
265, Sec. 3.033, eff. September 1, 2005.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Amended by:
Acts 2005, 79th Leg., Ch.
265, Sec. 3.034, eff. September 1, 2005.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
SUBCHAPTER E. APPLICATION OF COVERAGE TO CERTAIN EMPLOYEES
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Amended by:
Acts 2005, 79th Leg., Ch.
265, Sec. 3.035, eff. September 1, 2005.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.788, eff.
Sept. 1, 2003.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Amended by Acts 1995, 74th Leg., ch. 668, Sec. 1, eff. Sept. 1,
1995.
Amended by:
Acts 2005, 79th Leg., Ch.
265, Sec. 3.036, eff. September 1, 2005.
Acts 2005, 79th Leg., Ch.
815, Sec. 1, eff. September 1, 2005.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Sec. 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, Sec. 1.20, eff. Sept. 1,
1995.
Sec. 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, Sec. 1, eff. Aug. 28,
1995. Renumbered from Labor Code Sec. 406.097 by Acts 1997, 75th
Leg., ch. 165, Sec. 31.01(63), eff. Sept. 1, 1997.
Amended by:
Acts 2005, 79th Leg., Ch.
265, Sec. 3.037, eff. September 1, 2005.
SUBCHAPTER F. COVERAGE OF CERTAIN INDEPENDENT CONTRACTORS
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Amended by Acts 1997, 75th Leg., ch. 88, Sec. 1, eff. Sept. 1,
1997.
Amended by:
Acts 2005, 79th Leg., Ch.
265, Sec. 3.038, eff. September 1, 2005.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Sec. 406.126. EXEMPTION. This subchapter does not apply to farm
or ranch employees.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
SUBCHAPTER G. COVERAGE OF CERTAIN BUILDING AND CONSTRUCTION
WORKERS
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Amended by:
Acts 2005, 79th Leg., Ch.
265, Sec. 3.039, eff. September 1, 2005.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Amended by:
Acts 2005, 79th Leg., Ch.
265, Sec. 3.040, eff. September 1, 2005.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
SUBCHAPTER H. COVERAGE OF FARM AND RANCH EMPLOYEES
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Amended by:
Acts 2005, 79th Leg., Ch.
265, Sec. 3.041, eff. September 1, 2005.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff. Sept. 1, 1993.