Texas is the only state that allows employers to opt-out of the workers' compensation system. Nonsubscriber status comes with benefits and disadvantages. Wal-Mart Stores' recent announcement that it would opt-out of the Texas workers' compensation system is significant given that Wal-Mart is one of the largest private employers in the state.
As one might expect Walmart's recent decision to operate as a nonsubscriber to workers’ compensation in Texas is drawing a lot of attention. Walmart represents its new program will give the company “an opportunity to provide better care for our associates while also better managing our costs.” I think Walmart will ultimately determine its own fate in the court of public opinion.
As we all know the key to nonsubscription is balance. It is no secret that a well designed, well governed nonsubscriber program can reduce workplace injuries and therefore significantly reduce related injury costs. But only those programs that utilize a proactive safety culture focused on injury prevention and quality benefits balance the desire for cost-savings without cost to employee welfare.
As the largest nonsubscriber in Texas and the largest employer in the nation, Walmart’s plan and plan governance will undoubtedly face intense scrutiny. I am hopeful Walmart will choose responsible leadership by building a nonsubscriber program to not only reduce workplace injuries but also offer quality benefits in a manner that its own employees agree is superior to options previously available.
I am hopeful Walmart will choose responsible governance and
Measure its success through injury prevention and the quality of care available to injured associates rather than mere cost savings.
Provide quality benefits in a straightforward manner rather than implementing an overly complex plan that provides avenues to escape responsibility.
Provide impartial options to address employee disputes rather than requiring employees to enter into agreements that limit options.
Work with independent professionals that support the needs of Walmart and its associates rather than those willing to only side with Walmart.
The importance of Walmart’s decision to become a Texas nonsubscriber is that Walmart’s actions will not only reflect on the entire nonsubscriber community but also the nonsubscriber option and the unique nature of Texas’ workers’ compensation system, which allows most private sector employers to choose nonsubscription.
If the nation’s largest employer can demonstrate an ability to operate as a responsible nonsubscriber; freedom, choice and innovation will hopefully prevail. If not, Walmart could prove to be a tipping point in the battle to maintain the freedom to provide quality benefits outside of workers' compensation.
If you are interested in learning more about nonsubscription status or keeping apprised of the most recent developments in this area, I would encourage you to contact Steve and join his organization.
Follow me on Twitter @RussellCawyer.