--- title: "Texas Workers' Comp Requirements for Employers | MCC" description: "Texas workers' comp: optional for private employers, owners and officers, penalties and the required notice, in the agency's words." url: "https://mcc-solutionsnj.com/bookkeeping/workers-comp-texas" --- Workers' comp · Texas # Texas workers' compensation requirements Which employers must carry coverage, how owners and contractors are treated, and what the agency's pages say about penalties, the workplace notice, self-insurance and checking a policy. [![Intuit ProAdvisor Gold tier badge](/img/credentials/intuit-proadvisor-gold.png)](https://proadvisor.intuit.com/app/accountant/search?searchId=matthew-coleman77)Gold tier in Intuit's ProAdvisor program. [See my Intuit listing](https://proadvisor.intuit.com/app/accountant/search?searchId=matthew-coleman77) Keeping your own books? Tallyfinch does invoices, bank import and reports on your computer. [See Tallyfinch](/bookkeeping/mcc-books-downloadable-bookkeeping-software) **Short answer.** Private employers choose whether to carry it. Employers without it are non-subscribers and must file notices and post a notice of no coverage. ## At a glance Who must carry it Private employers choose whether to carry it. Employers without it are non-subscribers and must file notices and post a notice of no coverage. Owners and officers If the business has coverage, a sole proprietor, partner or corporate executive officer is covered as an employee unless specifically excluded by a policy endorsement (Labor Code 406.097, as quoted by TDI). Independent contractors For the contractor rules in Labor Code Subchapter G, an independent contractor must be paid by the job, not by the hour or another time-based measure, among other tests (section 406.141). Self-insurance Some employers may be certified by TDI to self-insure. Going without Going without coverage isn't itself penalized on the pages we read, but a non-subscriber that doesn't file the notice of no coverage (DWC Form-005) or doesn't tell new employees in writing may face administrative penalties (Labor Code 406.004 and 406.005). Workplace notice Covered employers post Notice 6 (commercial insurance), Notice 7 (certified self-insurer) or Notice 10 (self-insurance group). Non-subscribers post Notice 5, in English and Spanish, and tell new hires in writing. Check a policy Use the division's Verify employer coverage page. [Open the lookup](https://tdi.texas.gov/WC/employer/coverage.html) Agency Texas Department of Insurance, Division of Workers' Compensation ## In the agency's words **The rule** Hiring in another state? [Employer registration in Texas, done for you](/bookkeeping/out-of-state-employer-registration), or [a free bookkeeping health check](/bookkeeping/health-check). "In Texas, private employers can choose whether to provide workers' compensation insurance coverage." **Owners** "unless the sole proprietor, partner, or corporate executive officer is specifically excluded from coverage" **Contractors** "paid by the job and not by the hour or some other time-measured basis" **Going without** "An employer who does not file the form may face administrative penalties." **Notice** "If you have coverage through a commercial insurance company, use notice 6." ## Three example businesses What the stated rule says for three common setups: - **2 employees, most businesses (not construction), llc:** Your choice (private employers). [See why](/bookkeeping/do-i-need-workers-comp-checker?state=tx&employees=2&industry=other&biz=llc) - **4 employees, construction, corporation:** Your choice (private employers). [See why](/bookkeeping/do-i-need-workers-comp-checker?state=tx&employees=4&industry=construction&biz=corporation) - **6 employees, most businesses (not construction), sole proprietor:** Your choice (private employers). [See why](/bookkeeping/do-i-need-workers-comp-checker?state=tx&employees=6&industry=other&biz=sole) Your own numbers: [open the checker for Texas](/bookkeeping/do-i-need-workers-comp-checker?state=tx). ## Worth knowing Non-subscribers file a notice of no coverage each year between February 1 and April 30; those with five or more employees also report lost-time injuries. ## Official sources - [Employer FAQ (Texas Department of Insurance, DWC)](https://tdi.texas.gov/WC/employer/employerfaq.html) (checked November 2026) - [Employer E-File online reporting (non-subscribers, Texas DWC)](https://www.tdi.texas.gov/WC/nonsubscriber.html) (checked November 2026) - [Exempt filing notification on Manual Rules V and IX (Texas Department of Insurance, 2006)](https://www.tdi.texas.gov/rules/2006/0215-059.html) (checked November 2026) - [Texas Labor Code Chapter 406 (Texas Legislature)](https://tcss.legis.texas.gov/resources/LA/pdf/LA.406.pdf) (checked November 2026) - [Employers without coverage (non-subscribers), Texas DWC fact sheet (updated 08/2022)](https://www.tdi.texas.gov/pubs/factsheets/noncoveremp.pdf) (checked November 2026) General information, not legal or insurance advice; we are not lawyers or insurance agents. Rules as published on the pages above, checked November 2026. We don't recommend or sell any insurer; the agency or a licensed agent can say how a rule applies to your business. ## Common questions **Who has to carry workers' comp in Texas?** Private employers choose whether to carry it. Employers without it are non-subscribers and must file notices and post a notice of no coverage. The agency puts it as "In Texas, private employers can choose whether to provide workers' compensation insurance coverage." **Do owners and officers need coverage in Texas?** If the business has coverage, a sole proprietor, partner or corporate executive officer is covered as an employee unless specifically excluded by a policy endorsement (Labor Code 406.097, as quoted by TDI). **What about independent contractors in Texas?** For the contractor rules in Labor Code Subchapter G, an independent contractor must be paid by the job, not by the hour or another time-based measure, among other tests (section 406.141). **What happens to a Texas employer with no coverage?** Going without coverage isn't itself penalized on the pages we read, but a non-subscriber that doesn't file the notice of no coverage (DWC Form-005) or doesn't tell new employees in writing may face administrative penalties (Labor Code 406.004 and 406.005). **What notice must a Texas employer post?** Covered employers post Notice 6 (commercial insurance), Notice 7 (certified self-insurer) or Notice 10 (self-insurance group). Non-subscribers post Notice 5, in English and Spanish, and tell new hires in writing. **Can an employer self-insure in Texas?** Some employers may be certified by TDI to self-insure. All states: [workers' comp requirements by state](/bookkeeping/workers-comp-requirements-by-state) · [Tennessee](/bookkeeping/workers-comp-tennessee) · [Virginia](/bookkeeping/workers-comp-virginia) Keeping coverage records in Texas? ## Workers' Comp and Business Insurance Records Kit A state coverage checklist with Texas's rule and official link, a certificate of insurance log for subcontractors, an injury report and claim log, and a workbook that flags policy renewals and expiring certificates, as Word files and PDFs. [Get the kit ($15)](/toolkits/workers-comp-and-insurance-records-kit) [Free sample](/toolkits/workers-comp-and-insurance-records-kit#free-starter)14-day full refund Hiring under a business name that isn't your own? [File a Texas DBA (assumed name certificate)](/bookkeeping/dba-texas) before the name goes on payroll. Tallyfinch ### Books you keep on your own computer Tallyfinch does invoices, bills, bank import, reconciliation and the main reports, in a file you own. $99 once, then $5 a month for updates; the app keeps working if you stop the plan. It does not do payroll or sales tax filing. The free download records up to 60 entries. [See Tallyfinch](/bookkeeping/mcc-books-downloadable-bookkeeping-software) [Download it free](/tools/pro/trial/mccBooks) [Compare the three apps](/software) ## Want payroll and insurance records kept for you? [See bookkeeping services](/bookkeeping/)[Call (908) 444-6373](tel:+19084446373)