Hiring a first employee is a real milestone for a Boerne business, and it’s also the moment a lot of owners assume workers’ compensation becomes mandatory. In Texas, that assumption is actually wrong, which makes this decision more complicated, not less.
Texas Is the One State That Doesn’t Require It
Texas is the only state in the country where most private employers aren’t legally required to carry workers’ compensation insurance. This surprises a lot of first-time employers who assume the rule works the same way it does everywhere else.
The Exceptions Worth Knowing
- Employers contracting with government agencies are generally required to carry it
- Construction businesses working on public contracts typically must carry coverage
- Some general contractors require subcontractors to carry their own workers’ comp as a condition of the job
Why “Optional” Doesn’t Mean “Skip It”
Choosing not to carry workers’ compensation makes a Texas business a “non-subscriber,” a specific legal status with real consequences. Non-subscribers lose certain legal protections that come standard with workers’ comp coverage, which means an injured employee can potentially sue the business directly for damages, including medical costs, lost wages, and pain and suffering, without the caps that workers’ comp claims typically carry.
What Non-Subscriber Status Actually Requires
Even choosing to go without coverage isn’t paperwork-free. Non-subscribers must file an annual notice with the Texas Department of Insurance, post notices in the workplace stating they don’t carry coverage, and provide written notice to each new employee at the time of hire.
What Boerne Business Owners Should Weigh
The type of work matters here. A Hill Country contractor with employees using ladders, tools, and vehicles daily carries a very different injury risk than an office-based business. Higher-risk operations, especially anything involving physical labor, generally benefit more from carrying coverage, even though Texas doesn’t require it.
Questions Worth Asking Before Your First Hire
- Does the type of work my new employee will do carry meaningful injury risk?
- Am I comfortable with the increased lawsuit exposure that comes with non-subscriber status?
- Do any of my current or future contracts require workers’ comp coverage as a condition of the work?
This decision deserves real thought before that first paycheck goes out, not after an injury forces the question. This connects to the broader coverage planning we’ve discussed for growing Boerne businesses, including our post on customizing your commercial insurance policy, since workers’ comp is exactly the kind of coverage that should be tailored to how your specific business actually operates.
Trevino Insurance Services helps Boerne business owners weigh workers’ compensation options before hiring their first employee. Visit Trevino Insurance Services or call 210-332-1010.
