Commercial Cleaning Research

Workers' Comp for Commercial Cleaning in Texas (2026)

Texas is the only state where workers' comp is optional — non-subscribers must post notice and file annually with TDI. Subscribers use NCCI with a July 1, 2026 loss cost of ~$0.95/$100 for class 9014 (lowest in the U.S.), but non-subscribers face unlimited civil liability for injured workers.

Non-subscription state (WC optional); competitive private market if subscribingStatute: TX Lab. Code Ch. 401 (workers' compensation system); §401.011 (definitions); §406.002 (employer election to subscribe); §406.033 (non-subscriber liability); §415.002 (administrative penalty for subscriber violations); Division of Workers' Compensation rules at 28 TACEffective: Current; NCCI advisory loss costs effective July 1, 2026 (–3.8% overall decrease approved by TDI, Commissioner's Bulletin B-0001-26)Last reviewed: Q2 2026
State
Texas
Governing Statute
TX Lab. Code Ch. 401 (workers' compensation system); §401.011 (definitions); §406.002 (employer election to subscribe); §406.033 (non-subscriber liability); §415.002 (administrative penalty for subscriber violations); Division of Workers' Compensation rules at 28 TAC
NCCI Class Code 9014 — Janitorial Services by Contractors, No Window Cleaning Above Ground Level & Drivers (applies when subscribing to Texas WC system)
Enforcement Agency
Texas Division of Workers' Compensation (DWC), Texas Department of Insurance (TDI); 512-676-6710
Civil Penalty
Non-subscriber (no WC) must file annual DWC Form-5 and prominently post notice (28 TAC §110.101); failure to file DWC-5: administrative penalty up to $25,000 per violation; non-subscriber loses common-law defenses (contributory negligence, assumption of risk, fellow-servant rule) — injured workers may sue in civil court; subscriber violations (late reporting, premium fraud): up to $25,000 per violation; Texas has NO criminal penalty for WC non-coverage — unlike any other U.S. state

How workers' comp works for janitorial in Texas

Texas is the only state in the United States where workers' compensation is optional. Under TX Labor Code Chapter 401, employers may choose to be "subscribers" (carrying WC) or "non-subscribers" (opting out). This binary choice creates dramatically different risk profiles for janitorial operators. If subscribing: Texas uses NCCI rates and loss cost methodology administered by TDI; all coverage is through the private market. If non-subscribing: the employer retains unlimited civil liability for all work injuries and loses the three common-law defenses (contributory negligence, assumption of risk, fellow-servant rule) that would otherwise reduce exposure.

Rating bureau: NCCI (subscriber policies)

Texas is an NCCI state for employers who elect WC coverage. NCCI files advisory loss costs with TDI, and carriers set their own rates by applying approved loss cost multipliers. TDI's Property and Casualty Lines Office (512-676-6710) administers all rate filings. The most recent NCCI filing: a –3.8% overall decrease to advisory loss costs effective July 1, 2026, per Commissioner's Bulletin B-0001-26. Texas rates have declined significantly over the past decade, driven by improvements in medical cost containment and injury frequency.

Class code and rate (Texas 2025–2026)

  • Code 9014 — Janitorial Services by Contractors, No Window Cleaning Above Ground Level & Drivers. Advisory loss cost: approximately $0.94–$0.98 per $100 payroll (NCCI Texas filing; basis rates effective July 1, 2026). Texas has the lowest class 9014 rate of any NCCI state — roughly one-quarter of the national average, reflecting a favorable loss experience and streamlined medical delivery system.
  • Code 9170 — Window Cleaning Above Ground Level. Substantially higher rate; separate payroll required.
  • Code 9015 — Building or Property Management (in-house staff). Do not use for contract cleaning companies.
  • Bid-math note: at ~$0.97/$100, load WC at approximately 1.0% of gross wages in Texas subscriber bids — the most cost-competitive major state for janitorial WC.

Indemnity benefits (Texas 2025–2026)

  • Max weekly TTD: $1,271.05 (effective 10/1/2025–9/30/2026; = 100% of Texas state average weekly wage; TX Lab. Code §408.061).
  • Min weekly TTD: $191 (effective 10/1/2025–9/30/2026; TX Lab. Code §408.061).
  • Impairment Income Benefits (IIBs): paid at 70% of AWW (up to the maximum) for the number of weeks assigned under the AMA Guides impairment rating.
  • Waiting period: 7 calendar days; first 7 days paid retroactively if disability exceeds 14 days (TX Lab. Code §408.082).
  • Supplemental Income Benefits (SIBs): available if worker sustains 15%+ whole-body impairment and cannot earn 80% of pre-injury AWW; paid quarterly.
  • TTD duration: up to 104 weeks (TX Lab. Code §408.101); lifetime medical for compensable injuries.

Non-subscription: the Texas opt-out framework

Texas non-subscribers must comply with several requirements:

  • Annual filing of DWC Form-5 (Notice of Non-Coverage) with TDI by January 1 each year (28 TAC §110.101).
  • Prominent posting of notice at workplace and inclusion in new-hire paperwork.
  • Failure to file or post: administrative penalty up to $25,000 per violation.
  • Non-subscribers have NO criminal liability for WC non-coverage — Texas is unique in this regard.
  • Common-law defenses are abolished for non-subscribers (TX Lab. Code §406.033): injured workers may sue directly in civil court, and juries typically award significantly more than WC benefit schedules would provide.
  • Some large janitorial companies (particularly government contractors) operate as non-subscribers with alternative benefit plans (ERISA-governed). This is legal but creates complex insurance and legal exposure.

Experience rating (Texas)

Texas subscriber policies use NCCI's standard experience rating plan. Employers with ≥$10,000 in expected losses (approximately $1–2 million in payroll at class 9014 rates) qualify for experience rating. The experience mod is calculated from the 3-year experience period excluding the most recent year. Texas also uses the NCCI retrospective rating plan, available to larger accounts (≥$25,000 annual standard premium).

Officer/owner waivers

Under TX Lab. Code §406.097, a corporate officer, director, or owner who elects to be excluded from WC coverage must file a written election with the carrier, and the carrier must endorse the policy. Sole proprietors and partners are excluded from subscriber policies by default unless affirmatively included by written election. For LLC members, coverage depends on whether they are treated as employees — Texas follows an economic-reality test.

Penalties for non-compliance

As noted, Texas does not impose criminal penalties for WC non-coverage. Administrative penalties (up to $25,000/violation) apply for subscriber violations (late first reports, premium fraud, failure to post subscriber notice) and for non-subscriber filing failures. The real penalty for non-subscribers is civil liability exposure — in a state where personal-injury jury verdicts regularly reach seven figures for industrial injuries, the financial risk of non-subscription for a large janitorial company is substantial.

Recent rate changes (2025–2026)

  • July 1, 2025: NCCI loss costs for Texas (prior year basis).
  • July 1, 2026: TDI approved NCCI's proposed –3.8% overall advisory loss cost decrease effective July 1, 2026 (Commissioner's Bulletin B-0001-26, March 2026). Class 9014 rate falls from ~$0.98/$100 to approximately ~$0.94/$100.
  • 2025 Legislative: No significant WC legislative changes in 2025 session (Texas legislature meets biennially; next session 2027).

Cross-references

Primary sources

Authored by the Opora Editorial Team.

Sources

This page is informational only. It does not constitute legal advice, tax advice, or a professional compliance determination. Laws vary by state and locality, change over time, and apply differently depending on your specific facts and circumstances. Before taking any action with legal or business consequences, consult a licensed attorney or CPA qualified in your jurisdiction.