Texas Workers' Comp Exemption

Texas doesn't require most private employers to carry workers' comp coverage at all — coverage is elective under the state's "non-subscriber" system (only governmental entities are required to carry it). If a business does elect to carry a policy, sole proprietors are automatically included as covered persons under that policy by default, under Texas Labor Code §406.097(a), unless specifically excluded through an endorsement to the insurance policy. So there's no separate opt-in step once a policy exists — inclusion is the default, and exclusion is the affirmative step.

Partners are explicitly named in §406.097(a) with the same default-included/exclude-by-endorsement rule as sole proprietors. The statute text we located uses "sole proprietor, partner, or corporate executive officer" and does not name "LLC member" specifically; industry practice generally treats LLC members the same way by analogy to partners, but we could not confirm that against a primary statutory or TDI administrative source — confirm directly with TDI or your carrier if your business is a Texas LLC.

Corporate officers are automatically included under §406.097(a) once the business carries a policy, unless excluded by endorsement. Rather than a headcount cap, Texas uses an equity-ownership threshold: an officer must own at least 25% equity to qualify for exclusion, under §406.097(b)/(c). Notably, §406.097(c) allows a qualifying (25%+ equity) sole proprietor, partner, or officer to be individually excluded even on projects otherwise subject to Texas's construction mandatory-coverage rule for public works (§406.096). We found no dollar-figure cap or filing fee for exclusion.

Two separate processes apply. To make the whole business a "non-subscriber" (opting out of carrying any policy), employers file DWC Form-005 with TDI-DWC online, by email, or by fax — within 30 days of hiring the first employee, within 10 days of terminating existing coverage, within 10 days of a DWC request, and with mandatory annual re-filing every February 1 through April 30. No fee was found for this filing. Ongoing obligations include written notice to employees, a required workplace posting, and monthly injury reporting (DWC Form-007) for employers with 5 or more employees. To exclude an individual owner or officer from a policy the business does carry, that's not a state filing at all — it's a policy endorsement handled through the insurance carrier, per the "excluded... through an endorsement" language in §406.097(a).

The non-subscriber option is the real "exemption" story in Texas — most owners' biggest decision is whether the business carries any workers' comp policy at all, not whether a specific owner can be excluded from one. On public and governmental construction contracts specifically, §406.096 requires the contractor to certify coverage for every employee on that project and requires subcontractors to pass certificates up the chain, but this applies to public works, not all private construction — and even there, a qualifying owner can still exclude themselves personally under §406.097(c). Going non-subscriber comes with a real legal tradeoff: employers lose three standard common-law defenses (contributory negligence, assumption of risk, and the fellow-servant rule) in a lawsuit brought by an injured worker, under Labor Code §406.033.