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Texas Supreme Court Says Temps Are Employees For Workers Comp

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Texas Supreme Court Exclusive Remedy

According to an article in Business Insurance, the Texas Supreme Court ruled that even temporary employees are to be covered under a company’s Workers Comp policy. The case is Casados v Port Elevator.

Graphic Of Texas Supreme Court Logo
Wikimedia commons – Government of Texas

A similar ruling was handed down in Texas approximately 10 years ago. A ruling such as this can have a chilling effect on employers” Workers Compensation policies in Texas – and possibly in other states.

The three basic concerns I have with this ruling are:

  1. The employers are already paying for Workers Compensation insurance in the fee markup by the temporary agency. Requiring an employer to pay double for coverage is a violation of the basic rules on insurance. The temp agency had a valid Workers Comp policy in place at the time of the accident.
  2. Insurance carriers will likely have no choice except to charge for temporary employees when the policy is written or at the time of the premium audit. The risk of having to cover temporary workers in now in place.
  3. The worst effect is employers may decide to not hire temporary employees if part of the agency fee will also have to be paid again to the employers’ Workers Compensation carrier. Employers should not be discouraged with using temps in this economy.

 

US Texas Supreme Court Picture
Wikimedia Commons – Jarek Tuszyński

The case was a 2005 death case that involved a temporary worker who was killed his third day on the job in a grain storage facility accident. The Texas Supreme Court did make the proper decision on exclusive remedy. A jury did not apply the exclusive remedy doctrine and awarded the employee’s family $2.7 million. The appeals court upheld the award.

The bottom line is the Texas Supreme Court’s exclusive remedy part of their ruling was correct. The mistake was made when the temporary agency’s Workers Comp carrier was not held 100% liable as is usually the case. This was a weird take on the exclusive remedy doctrine.

 

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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