Before You Remodel that Gymnasium, Think about Workers’ Compensation Coverage!

by Stacy Hobbs

So, you are bidding out to build a new gymnasium where the state championship will surely be played and won! A few weeks later, the contract is ready to roll. Wait! Make sure you are informed about workers’ compensation insurance coverage requirements and postings before you sign anything. As a political subdivision (governmental entity) when you sign a contract for construction or building, you are required by the Texas Workers’ Compensation Act and Division of Workers’ Compensation (DWC) Rules to ensure contractors (all of them) have a  workers’ compensation policy and that verbiage must be specified in any contract you sign.

You are also required to post the DWC-Notice 8: Required WC Coverage for Building or Construction Projects for Governmental Entities. This posting can be found on the DWC Web Site, and it is available in English and Spanish.

Texas Labor Code §406.096 clearly states the requirements below.

 “(a)  A governmental entity that enters into a building or construction contract shall require the contractor to certify in writing that the contractor provides workers' compensation insurance coverage for each employee of the contractor employed on the public project.
(b)  Each subcontractor on the public project shall provide such a certificate relating to coverage of the subcontractor's employees to the general contractor, who shall provide the subcontractor's certificate to the governmental entity….”

So, maybe after the gymnasium is complete, you want to hire a contractor to paint the hallways of the high school. After all, you need clean and nice walls for a back drop to display all those trophies the kids have earned. Refer to the definition of “building or construction” below. As you can see this is a very broad definition. Pay special attention to (e)(1)(C). 

(e)  In this section:
(1)  "Building or construction" includes:
(A)  erecting or preparing to erect a structure, including a building, bridge, roadway, public utility facility, or related appurtenance;
(B)  remodeling, extending, repairing, or demolishing a structure; or
(C)  otherwise improving real property or an appurtenance to real property through similar activities.

Many projects, such as painting, could qualify as “improving the real property”.
Better to be safe than sorry. Always require a certificate of workers’ compensation coverage when contracting with anyone working in the school, unless that person is a sole proprietor, in which case the certificate of coverage is not required as stated in Texas Labor Code §406.097.

For specifics on building or construction contracts and these requirements, visit the DWC Web Site. Choose “Rules” from the left side navigation and then DWC Rule §110.110.