Is there a specific risk or risks that a General Contractor may encounter if they hire a subcontractor that is a non-subscriber?
By Barry A. Moscowitz • Feb 20, 2017
(Question Continued) With no statutory workers' compensation in place, is the General Contractor at risk for also being liable for statutory workers' compenstation benefits? Does the use of the DWC-83 (or maybe it is the DWC-84) provide any protection?
In general, the answer is no, provided the general contractor has the subcontractor sign the proper agreement beforehand.
General contractors can utilize non-subscribing subcontractors without risk of exposure from an injured employee of that subcontractor, provided that the subcontractor is not an employee of the general contractor as defined by the workers’ compensation statute. Under section 406.122(b) of the Texas Labor Code, a subcontractor and the subcontractor's employees are not employees of the general contractor if the subcontractor is (1) operating as an independent contractor; and (2) has entered into a written agreement with the general contractor that evidences a relationship in which the subcontractor assumes the responsibilities of an employer for the performances of work.
To answer the second part of the question, the use of a DWC-83 or similar contractual language is not only helpful but necessary to satisfy the second prong of section 406.122(b) and establish that the sub’s employees are not employees of the GC.
For additional information about this response or non-subscriber law in Texas, please contact Barry Moscowitz or Travis Brown.