Texas Codes

Tex. Lab. Code § 406.123 (2026)

Election To Provide Coverage; Administrative Violation

✓ current as of May 2026
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Sec. 406.123. ELECTION TO PROVIDE COVERAGE; ADMINISTRATIVE VIOLATION. (a) A general contractor and a subcontractor may enter into a written agreement under which the general contractor provides workers' compensation insurance coverage to the subcontractor and the employees of the subcontractor.

(b) If a general contractor has workers' compensation insurance to protect the general contractor's employees and if, in the course and scope of the general contractor's business, the general contractor enters into a contract with a subcontractor who does not have employees, the general contractor shall be treated as the employer of the subcontractor for the purposes of this subtitle and may enter into an agreement for the deduction of premiums paid in accordance with Subsection (d).

(c) A motor carrier and an owner operator may enter into a written agreement under which the motor carrier provides workers' compensation insurance coverage to the owner operator and the employees of the owner operator.

(d) If a general contractor or a motor carrier elects to provide coverage under Subsection (a) or (c), then, notwithstanding Section 415.006, the actual premiums, based on payroll, that are paid or incurred by the general contractor or motor carrier for the coverage may be deducted from the contract price or other amount owed to the subcontractor or owner operator by the general contractor or motor carrier.

(e) An agreement under this section makes the general contractor the employer of the subcontractor and the subcontractor's employees only for purposes of the workers' compensation laws of this state.

(f) A general contractor shall file a copy of an agreement entered into under this section with the general contractor's workers' compensation insurance carrier not later than the 10th day after the date on which the contract is executed. If the general contractor is a certified self-insurer, the copy must be filed with the division.

(g) A general contractor who enters into an agreement with a subcontractor under this section commits an administrative violation if the contractor fails to file a copy of the agreement as required by Subsection (f).

(h) Notwithstanding Subsection (b), a person who performs work or provides a service for an oil or gas well operator and who is an independent contractor that has no employees shall be treated in the same manner as an independent contractor with employees and is not entitled to coverage under the general contractor's workers' compensation insurance policy unless the independent contractor and the general contractor enter into an agreement under this section.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 88, Sec. 1, eff. Sept. 1, 1997.

Amended by:

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.038, eff. September 1, 2005.

Notes of Decisions
Cited in 48 cases (11 in the last 5 years), 1997–2026 · leading case: Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433 (Tex. 2009).
Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433 (Tex. 2009). · cites it 14× “See TEX. LAB.CODE § 406.123(a). Summers' chief argument is that the contract for maintenance, construction, and general services was between IMC and another Entergy company, Entergy Services, Inc.”
HCBeck, Ltd. v. Rice, 284 S.W.3d 349 (Tex. 2009). · cites it 24× “(g) A general contractor who enters into an agreement with a subcontractor under this section commits an administrative violation if the contractor fails to file a copy of the agreement as required by Subsection (f).”
Willoughby v. United States Ex Rel. United States Dep't of the Army, 730 F.3d 476 (5th Cir. 2013). · cites it 5× “Tex. Lab.Code § 406.123(a). Section 406.123(a) of the TWCA provides: A general contractor and a subcontractor may enter into a written agreement under which the general contractor provides workers’ compensation insurance coverage to the subcontractor and the employees of the…”
Funes v. Eldridge Elec. Co., 270 S.W.3d 666 (Tex. App. 2008). · cites it 7× “See Tex Lab.Code Ann. § 406.123. 1 Eldridge Electric further argued that Clayco’s immunity under the Act extends to all participating subcontractors and their employees, thereby precluding Funes’s suit against Eldridge Electric, a subcontractor.”
Halferty v. Flextronics Am., LLC, 545 S.W.3d 708 (Tex. App. 2018). · cites it 7× “See Tex. Labor Code Ann. § 406.123 (a) ; 408.”
Williams v. Razor Enter., Inc., 70 S.W.3d 274 (Tex. App. 2002). · cites it 8× “See Tex. Lab.Code Ann. §§ 406.123; 406.144; 408.”
Berry Contracting, L.P. v. Mann, 549 S.W.3d 314 (Tex. App. 2018). · cites it 4× “See TEX. LAB. CODE ANN. § 406.123 (West, Westlaw through 2017 1st C.”
Etie v. Walsh & Albert Co., Ltd., 135 S.W.3d 764 (Tex. App. 2004). · cites it 5× “” See Tex. Lab.Code Ann. § 406.123. Clearly, the Act contemplates that independent contractors may, in certain circumstances, be considered “employees” despite not meeting the definition of an “employee” in section 401.”
Wingfoot Enter. v. Alvarado, 111 S.W.3d 134 (Tex. 2003). · cites it 2× “[45] Tex. Lab.Code § 406.123(a). [46] Id. § 406.”
Austin Bridge & Rd., LP v. Suarez, 556 S.W.3d 363 (Tex. App. 2018). · cites it 3× “TEX. LABOR CODE ANN. § 406.123 (West 2015).”
Hector Garza v. Zachry Constr. Corp., Zachry Indus., Inc., Gilbert Morales & Anthony Rodriguez, 373 S.W.3d 715 (Tex. App. 2012). · cites it 5× “123 indicates the Legislature’s intent to extend the exclusive remedy bar contained in section *721 408.”
Briggs v. Toyota Mfg. of Texas, 337 S.W.3d 275 (Tex. App. 2010). · cites it 2× “7 Tex. Lab.Code Ann. § 406.123 (West 2006); HCBeck, Ltd.”
— Tex. Lab. Code § 406.123(a) — 24 cases
Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433 (Tex. 2009). “See TEX. LAB.CODE § 406.123(a). Summers' chief argument is that the contract for maintenance, construction, and general services was between IMC and another Entergy company, Entergy Services, Inc.”
HCBeck, Ltd. v. Rice, 284 S.W.3d 349 (Tex. 2009). “(g) A general contractor who enters into an agreement with a subcontractor under this section commits an administrative violation if the contractor fails to file a copy of the agreement as required by Subsection (f).”
Willoughby v. United States Ex Rel. United States Dep't of the Army, 730 F.3d 476 (5th Cir. 2013). “Tex. Lab.Code § 406.123(a). Section 406.123(a) of the TWCA provides: A general contractor and a subcontractor may enter into a written agreement under which the general contractor provides workers’ compensation insurance coverage to the subcontractor and the employees of the…”
Wingfoot Enter. v. Alvarado, 111 S.W.3d 134 (Tex. 2003). “[45] Tex. Lab.Code § 406.123(a). [46] Id. § 406.”
Halferty v. Flextronics Am., LLC, 545 S.W.3d 708 (Tex. App. 2018). “See Tex. Labor Code Ann. § 406.123 (a) ; 408.”
— Tex. Lab. Code § 406.123(c) — 1 case
Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433 (Tex. 2009). “See TEX. LAB.CODE § 406.123(a). Summers' chief argument is that the contract for maintenance, construction, and general services was between IMC and another Entergy company, Entergy Services, Inc.”
— Tex. Lab. Code § 406.123(d) — 1 case
TIC Energy & Chem., Inc. v. Kevin Bradford Martin, 488 S.W.3d 344 (Tex. App. 2015).
— Tex. Lab. Code § 406.123(e) — 17 cases
Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433 (Tex. 2009). “See TEX. LAB.CODE § 406.123(a). Summers' chief argument is that the contract for maintenance, construction, and general services was between IMC and another Entergy company, Entergy Services, Inc.”
HCBeck, Ltd. v. Rice, 284 S.W.3d 349 (Tex. 2009). “(g) A general contractor who enters into an agreement with a subcontractor under this section commits an administrative violation if the contractor fails to file a copy of the agreement as required by Subsection (f).”
Etie v. Walsh & Albert Co., Ltd., 135 S.W.3d 764 (Tex. App. 2004). “” See Tex. Lab.Code Ann. § 406.123. Clearly, the Act contemplates that independent contractors may, in certain circumstances, be considered “employees” despite not meeting the definition of an “employee” in section 401.”
Willoughby v. United States Ex Rel. United States Dep't of the Army, 730 F.3d 476 (5th Cir. 2013). “Tex. Lab.Code § 406.123(a). Section 406.123(a) of the TWCA provides: A general contractor and a subcontractor may enter into a written agreement under which the general contractor provides workers’ compensation insurance coverage to the subcontractor and the employees of the…”
Maxim Crane Works v. Zurich Amer Ins, 11 F.4th 345 (5th Cir. 2021).
— Tex. Lab. Code § 406.123(f) — 6 cases
Willoughby v. United States Ex Rel. United States Dep't of the Army, 730 F.3d 476 (5th Cir. 2013). “Tex. Lab.Code § 406.123(a). Section 406.123(a) of the TWCA provides: A general contractor and a subcontractor may enter into a written agreement under which the general contractor provides workers’ compensation insurance coverage to the subcontractor and the employees of the…”
Berry Contracting, L.P. v. Mann, 549 S.W.3d 314 (Tex. App. 2018). “See TEX. LAB. CODE ANN. § 406.123 (West, Westlaw through 2017 1st C.”
Briggs v. Toyota Mfg. of Texas, 337 S.W.3d 275 (Tex. App. 2010). “7 Tex. Lab.Code Ann. § 406.123 (West 2006); HCBeck, Ltd.”
Funes v. Eldridge Elec. Co., 270 S.W.3d 666 (Tex. App. 2008). “See Tex Lab.Code Ann. § 406.123. 1 Eldridge Electric further argued that Clayco’s immunity under the Act extends to all participating subcontractors and their employees, thereby precluding Funes’s suit against Eldridge Electric, a subcontractor.”
— Tex. Lab. Code § 406.123(g) — 3 cases
Berry Contracting, L.P. v. Mann, 549 S.W.3d 314 (Tex. App. 2018). “See TEX. LAB. CODE ANN. § 406.123 (West, Westlaw through 2017 1st C.”
Funes v. Eldridge Elec. Co., 270 S.W.3d 666 (Tex. App. 2008). “See Tex Lab.Code Ann. § 406.123. 1 Eldridge Electric further argued that Clayco’s immunity under the Act extends to all participating subcontractors and their employees, thereby precluding Funes’s suit against Eldridge Electric, a subcontractor.”
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