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Under Texas Law, Employees Can Opt Out of Workers’ Comp Coverage

If you’ve ever been injured on the job before, you know how difficult it is to maneuver through the Texas workers’ compensation system. It’s a complex system with a lot forms to fill out, departments to report to, and appointments with doctors who get to call the shots every step of the way. One of the main downsides to a workers’ comp claim is that it takes away an important right that you have under the Constitution; the right to a trial by jury.

If your boss buys compensation coverage, instead of being able to sue the employer in case of an injury, you are instead subjected to a benefits system that works more like a claim for unemployment benefits than a court case. The main downside to such a claim is that you typically get paid less than you would if you were able to take the case to trial. However, under Texas law, an employee has the right to opt out of workers’ compensation coverage. In this article we’ll discuss how an employee can opt out of workers’ compensation coverage and what that could mean for the employee.


Questions answered on this page:

  • Can an employee opt out of workers’ compensation coverage?
  • How do you opt out of workers’ comp?
  • Is opting out of workers’ comp coverage a good idea?
  • How can a lawyer help if I have been injured in a workplace accident?

Texas Labor Code § 406.034

Under the Texas Labor Code section 406.034, an employee can opt out of workers’ compensation coverage.

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 unless the employee has waived coverage in connection with an agreement with the employer.

Basically, to opt out, you’ve got to provide written documentation to your employer stating you’re opting out of workers’ compensation benefit coverage because you want to reserve your right to sue them under common law instead. This has to happen before an injury occurs–so preferably you would do this on your first day at the job or as soon as your employer starts carrying comp coverage if they did not carry it before. Under either situation, you’ve got 5 days from the day you begin to be covered by the workers’ comp policy to provide that notice to your employer.

The “catch” we mentioned earlier is that even though Texas labor laws allow you to opt out of workers’ comp coverage, it also allows your employer to fire you without cause. So, in a practical sense, if you go to work somewhere that subscribes to workers’ comp coverage and you tell them that you’d rather not be covered by the policy so that you can sue them if the need arises, chances are they will fire you on the spot. You don’t have to be covered by the policy, but they don’t have to employ you, either.

Talk to an attorney before you make any big decisions.

If you are thinking about opting out of your employer’s workers’ compensation coverage, the first thing you should do is contact an experienced workers’ compensation attorney. They will be able to go over exactly how opting out of coverage will affect you and can advise you about all the procedural requirements necessary to opt out of coverage. In some lines of work where you think you are very likely to be hurt by coworker, a lawsuit would be a viable option, so opting out of comp coverage to retain that right might be a good idea.

On the contrary, if you think that, in your line of work, you’re likely to “hurt yourself,” such as a lifting injury or a repetitive motion injury, workers’ comp benefits may be a better option that trying to sue your employer and, in doing so, convince a jury that your back injury is the employer’s fault. Depending upon the circumstances, a jury may agree with you or they may not. Our attorneys at Grossman Law Offices, based in Dallas, TX, have over two and a half decades of experience and have helped thousands of clients receive the advice and compensation that they deserve. We’re happy to point you in the right direction. Call today for a free consultation at 1-855-326-0000.


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