Texas workers compensation nonsubscriber basics for salons
Direct answer: Most private Texas employers can choose whether to carry workers compensation insurance. Employers who do not carry it are called nonsubscribers and still have notice and filing duties with the Texas Department of Insurance, Division of Workers Compensation (DWC).
If you have one or more employees and you do not have workers compensation coverage, you generally must file DWC Form-005 (Employer Notice of No Coverage or Termination of Coverage). File between February 1 and April 30 each calendar year, within 30 days of hiring your first employee, within 10 days after terminating coverage, and within 10 days if DWC asks you to file. Confirm current instructions on tdi.texas.gov before you file.
Nonsubscribers must also post Notice 5 where employees can see it regularly, in English, Spanish, and any other language that fits the workplace, and give written non-coverage notice to new employees.
Choosing to subscribe or not is a business and legal decision. Nonsubscribers can face different civil liability exposure than covered employers. This guide is general information, not legal advice. Talk with counsel or a qualified advisor about your situation.
CoverSmart Option 1 and Option 2 on this site are liability products for eligible barbers and stylists. They are not a substitute for workers compensation. Shop owners with employees should ask about workers compensation and employers liability as a separate conversation.
Official sources: Texas Department of Insurance DWC nonsubscriber pages and DWC Form-005 instructions.
Sole proprietors vs employers
If you truly have no employees, workers compensation nonsubscriber filing may not apply in the same way. The moment you hire, the analysis changes. Payroll companies, booth renter misclassification questions, and family employees can complicate the picture. Get advice tailored to your facts.
What CoverSmart does and does not do
Option 1 and Option 2 address general liability and professional liability for eligible barbers and stylists, with property features on Option 2. They are not workers compensation. Do not tell an injured employee that CoverSmart replaces workers compensation. That is incorrect.
Annual calendar reminder
Add February 1 to your business calendar with the note "DWC-005 window opens" and April 30 with "DWC-005 window closes." File even if you filed last year. DWC expects the annual filing from nonsubscribers who remain uncovered.
Posting and new hire packets
Keep Notice 5 posted where staff actually walk. Include non-coverage notice in new hire paperwork and keep a copy. Language access matters. English and Spanish are baseline expectations in DWC materials, with other languages when appropriate.
Where to get official forms
Use tdi.texas.gov for DWC Form-005, nonsubscriber fact sheets, and posting notices. This Stockton-Hill Insurance guide only orients Texas salon owners. It is not a filing service.
Agency license 2497116. NPN 17220910.
Conversation starters for Texas salon owners
Ask your advisor: How many people count as employees for DWC purposes in my setup? Do booth renters ever get reclassified in disputes? What does my general liability policy exclude for employee injuries? Should I subscribe to workers compensation instead of operating as a nonsubscriber?
Bring payroll summaries and booth agreements to that meeting. Edward can remind you what CoverSmart covers. He cannot answer workers compensation eligibility.
Link to other Texas guides
Read the inspection checklist if you are preparing the physical shop, and the booth rental guide if your model mixes employees and renters. Misclassification questions belong with counsel. CoverSmart questions belong with Amanda Hill or Edward on this site.