Texas Restaurant Workers' Comp: Non-Subscriber Guide

Texas restaurants are generally not required to carry workers’ compensation. Most private employers may elect coverage under Labor Code §406.002. A restaurant that declines becomes a non-subscriber: it must file a notice with the Texas Department of Insurance, Division of Workers’ Compensation, notify employees, and it loses key legal defenses if an injured worker sues. Government contractors must cover employees on the project.

Texas is the one state where a restaurant owner truly chooses. This page explains that choice for independent restaurants, bars, cafes, caterers and franchise groups: what the law requires either way, the injuries that drive restaurant claims, how premium is calculated, and how to keep costs in check.

Is workers’ comp required for Texas restaurants?

For most private employers, no. Labor Code §406.002 states that an employer may elect to obtain workers’ compensation insurance coverage. The main exception is government work: private employers that contract with a governmental entity must cover employees working on that project. Your franchise agreement, landlord or a large catering client can also require coverage by contract, even though the state does not.

Opting out is not a paperwork-free choice. Under §§406.004 and 406.005, a non-subscriber must file a non-coverage notice with TDI-DWC and must notify employees and post notices at the workplace. Failing to do so is an administrative violation. Nothing else in the statute penalizes simply going without coverage.

Plenty of Texas food businesses make this choice. TDI estimates that in 2022, 25% of Texas private employers were non-subscribers, employing 17% of workers, and the rate in the arts, entertainment, accommodation and food services sector was 27%, down from 32% in 2018.

What non-subscriber status really means for a restaurant

The biggest consequence sits in §406.033. If an employee sues a non-subscriber over a workplace injury, the employer cannot argue that the employee was contributorily negligent or assumed the risk of the job. A line cook who slipped on a wet floor he was supposed to mop can still sue, and the restaurant cannot point to his own carelessness as a defense. Verdicts in those cases are not limited to the scheduled benefits of the comp system.

Subscribing, by contrast, generally makes workers’ comp the injured employee’s remedy, with medical care and income benefits paid under the state system. Some non-subscribers buy an occupational injury benefit plan or non-subscriber liability coverage to fund injuries and defend lawsuits. Those products can be useful, but they are not workers’ comp and do not restore the lost defenses.

How the Texas comp market is set up

Texas does not run a monopolistic state fund. Coverage is sold by licensed private insurers, large employers can self-insure, and Texas Mutual Insurance Company serves as the insurer of last resort for employers that cannot find coverage elsewhere. TDI-DWC regulates the system. NCCI files classification and loss-cost items with TDI for Texas, and restaurant payroll is assigned to classifications that the carrier confirms at quote and audit. For more on comp across the country, our sister site USA Workers Comp covers the basics.

Kitchen and dining room injuries behind restaurant claims

Burns — fryer oil, flat-tops, steam wands and hot sheet pans.
Cuts and lacerations — knives, slicers, mandolines and broken glass in the dish pit.
Slips and falls — greasy kitchen tile, walk-in floors and wet dining room entrances.
Lifting and strain injuries — produce cases, kegs, stock pots and repetitive scooping or pressing.
Heat illness — hot kitchens during a Texas summer.
Workplace violence — late-night robberies and confrontations with intoxicated guests.
Driving injuries — employees delivering food or running errands.

How a Texas restaurant comp premium is figured

Premium starts with payroll. Each job is assigned to a classification, and the carrier applies a rate to each unit of payroll in that class. The result is then adjusted by your experience modification factor, which compares your own claims history with what is expected for businesses your size, so a restaurant with frequent claims pays more and one with a clean record can earn a credit. Carriers may also apply schedule credits or debits for safety programs and management practices. At year end, a payroll audit reconciles the estimate with actual payroll. We do not publish figures here because they depend on payroll, classification and history.

Keeping comp costs under control

The levers are practical. Report payroll accurately and make sure employees are in the correct classifications before the audit. Report every injury promptly, since late reporting tends to make claims more expensive. Build a return-to-work program with light-duty tasks such as prep or host work. Invest in anti-slip flooring, cut-resistant gloves, fryer splash guards, lifting carts and heat-illness breaks, and document the training. Those records help at renewal.

Comparing comp and non-subscriber options through our agency

Provident Financial Group is an independent agency. With one application, we compare workers’ comp quotes from multiple carriers side by side and, if you are weighing non-subscription, explain the trade-offs so you can decide with full information. Once you bind, we issue live certificates of insurance for landlords, franchisors and clients. Call (866) 964-6660. Coverage is subject to underwriting.

Frequently asked questions

Can a Texas restaurant legally operate without workers’ comp?

Yes, most private employers may choose not to carry it. You must file the non-coverage notice with TDI-DWC and notify employees, and you lose the contributory-negligence and assumption-of-risk defenses in injury lawsuits.

What if no carrier will write my restaurant?

Texas Mutual Insurance Company is the state’s insurer of last resort for workers’ comp. An independent agent can also check several private markets first.

Does my franchisor or landlord care whether I carry comp?

Often, yes. Franchise agreements, leases and catering contracts can require workers’ comp regardless of state law, so read them before deciding.

Do I need comp to bid on a government catering contract?

Private employers that contract with a governmental entity must provide coverage for employees working on that project.

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Restaurant Workers’ Compensation in Texas