Rep. Paul Workman (R-Austin) and Senator Kevin Eltife (R-Tyler) have introduced legislation responding to a recent Corpus Christi Court of Appeals case that has cast doubt on whether the employees of a subcontractor covered by the general contractor’s consolidated insurance program for purposes of the exclusive remedy under the workers’ compensation system.
Deviating from other courts of appeals decisions, in its opinion in Martin v. TIC (January 8, 2015) the 13th Court of Appeals suggested the existence of a conflict between §406.122 and §406.123, Labor Code. The former provides that, for purposes of workers’ compensation insurance, employees of a subcontractor are not employees of the general contractor if the subcontractor operates as an independent contractor and has a written agreement with the general evidencing the subcontractor’s responsibility for the employees’ work. The latter statute, however, creates an exception in which the subcontractor’s employees are “deemed” to be employees of the general contractor if the general contractor agrees to provide workers’ compensation coverage for the subcontractor’s employee. Ignoring well-established case law to the contrary, the Corpus Christi court seemed to indicate that a subcontractor’s employees could never be deemed employees for workers’ compensation insurance purposes, even if the general contractor covers them under a consolidated insurance program.
HB 1668 and SB 666 addresses the Corpus Christi court’s decision by clarifying that §406.123 exception controls the employee status of a contractor’s employee if the employee is covered by a consolidated insurance program.