Texas Workers’ Comp Exemption
We file workers’ compensation exemptions for Texas sole proprietors, LLC members, and corporate officers. Send us your details and we’ll confirm whether you qualify and handle the filing.
When coverage is required in Texas
Workers' compensation is ELECTIVE for the great majority of private Texas employers -- there is no general mandatory-coverage law. An employer may lawfully choose to be a 'non-subscriber' (carry no workers' compensation insurance at all) for its ordinary private-sector operations. This is fundamentally different from an 'owner exemption' model used in other states: in Texas the employer itself opts out of the whole system, not just specific owners. The major exception is building/construction contracts with a governmental entity (see 'construction' below), where coverage is mandatory.
Who can be excluded in Texas
Sole proprietors
Not applicable in the exemption sense used by other states -- there is no 'employee' status to exempt an owner from, because coverage itself is optional for the business as a whole. A sole proprietor with no employees is not required to have coverage or file anything with the state.
Partners
Same as sole proprietor -- coverage is elective for the business; no owner-specific exemption filing exists because the employer as a whole either subscribes or does not.
LLC members
Same as sole proprietor/partners -- elective at the business level, not at the individual-member level.
Corporate officers
Same as above -- Texas has no owner/officer 'exemption' concept parallel to South Dakota, Utah, or Vermont. The employer entity either carries a workers' compensation policy (a 'subscriber') or does not (a 'non-subscriber').
Construction rules in Texas
Texas Labor Code § 406.096 requires that a governmental entity entering into a building or construction contract must require the contractor to certify in writing that the contractor provides workers' compensation coverage for each employee working on the public project. Each subcontractor on that public project must provide its own coverage certification to the general contractor, who passes it to the governmental entity. Coverage may be provided through a group plan or other method acceptable to the governmental entity. This requirement applies specifically to public-sector (governmental) construction contracts -- it does not make coverage mandatory for private, non-governmental construction work in Texas.
How the exemption is filed
Non-subscriber notice (not an 'exemption' filing -- it is the required disclosure for choosing not to carry coverage): a Texas employer with no workers' compensation coverage and one or more employees not otherwise exempt (e.g., certain domestic and farm/ranch workers) must file DWC Form-005, Non-subscriber Notice to Division of Workers' Compensation, with the Texas Department of Insurance, Division of Workers' Compensation (DWC). No fee. Filing deadlines per the official form/FAQ: within 30 days of hiring the first employee; within 10 days of terminating a workers' compensation policy; within 10 days if DWC requests it; and an annual re-filing required of every non-subscriber between February 1 and April 30 each year. Non-subscribers must also: give written notice of non-coverage to new employees; post a workplace notice (Notice 5) in English, Spanish, and other languages as appropriate; and, if they have 5 or more employees, report qualifying work-related injuries/illnesses monthly on DWC Form-007. Filing channels: online at tdi.texas.gov/wc/nonsubscribers.html, by email to coverage.verification@tdi.texas.gov, by fax, or via a TXCOMP profile.
- Statute
- Tex. Labor Code § 406.096 (public building/construction contractor coverage requirement); DWC Form-005 filing requirements are set by DWC rule/form instruction rather than a single labor-code section identified in this research
- Market
- Competitive — coverage is bought from a private carrier.
Notes and open questions
Texas must not be described using 'exemption' language for owners -- the correct framing is elective/non-subscriber status for the whole business. The DWC Form-005 (fetched directly, current revision 01/25) is the authoritative primary source for filing deadlines and notice obligations; a secondary source's claim of a strict 'within 10 days of terminating coverage' deadline matches the form's own FAQ, so that detail is confirmed. Texas Labor Code Chapter 406, Subchapter E covers additional employee-coverage-application nuances (e.g., §406.096 for public contracts) not fully explored beyond what is cited here.
Sources
- https://www.tdi.texas.gov/wc/nonsubscriber.html
- https://www.tdi.texas.gov/forms/dwc/dwc005nocovst.pdf
- https://law.justia.com/codes/texas/labor-code/title-5/subtitle-a/chapter-406/subchapter-e/section-406-096/
- https://codes.findlaw.com/tx/labor-code/lab-sect-406-096/
Source material dated DWC Form-005 revision 01/25; agency page as retrieved 2026-08-30. Compiled from official Texas sources as a starting point, not legal advice — rules change, and your situation may turn on facts this page cannot see. Confirm with Texas Department of Insurance, Division of Workers' Compensation (DWC) or ask us and we’ll check it for you.
Workers' comp exemption filing in Texas
Tell us about your Texas business and we'll confirm whether you qualify for an exemption.