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Work with experienced legal counsel to manage non-subscription policy liabilities, P.1

For businesses, managing liabilities surrounding the health and safety of employees is a critical ongoing task. Reducing liability in this area requires not only ensuring that employees are properly trained and that the work environment is free of unnecessary hazards, but also ensuring that employees understand their options for recovering from a workplace injury.

For employees in Texas whose employer is covered by the workers’ compensation system, this will be their primary avenue for recovery after an accident, at least in most cases. In Texas, employers are not required to provide workers’ compensation benefits to their employees if they opt out of the system. For employees of these companies, the primary avenue for compensation is to seek recovery directly from their employer, either in personal litigation or under a so-called non-subscription policy. 

Non-subscription policies allow employers in Texas set their own terms for compensating injured employees. While these policies are popular in Texas, they have been criticized by employee advocates. The argument against these policies is that they almost always include terms which put employees at a disadvantage and give the employer complete control over the terms of compensation. One example: non-subscription policies often require employees to take disputes through arbitration rather than to court. And because employers typically select the arbitrator, the argument goes, they tend to come out ahead of workers.

Proponents of the non-subscription policies, though, argue that workers receive better medical care, get back to work quicker, generally receive more wage replacement under the policies than is provided in the workers’ compensation system, and that employers pay more attention to workplace safety because of they run the risk of personal injury liability when an injured worker case is unresolved.

In our next post, we’ll continue looking at this topic, and the importance of working with experienced legal counsel when negotiating the terms of non-subscription agreements. 

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