Updated April 29, 2020
On April 13, THLA hosted a webinar with experts at the Texas Workforce Commission (TWC). We asked the TWC questions about applying for unemployment benefits, employee eligibility, employer unemployment tax liability, partial benefits, and more in response to the COVID-19 coronavirus crisis.
THLA’s staff are currently working with TWC to get common questions answered in writing, and answer hotelier questions TWC did not have time to answer in the webinar. Check back here for updates.
We outlined some of the FAQ’s employers should be aware of as you operate your businesses.
Who is eligible to apply for unemployment benefits?
Any individual who was working before the Pandemic Unemployment Assistance (PUA) that is now being implemented because of the CARES ACT and is no longer working is eligible to apply. Before the implementation of PUA, only employees who had regular employment with an employer were eligible. Now independent contractors, and sole proprietors, etc. will be eligible for benefits.
TWC urges individuals who may have been denied prior to the implantation of the PUA to re-apply because benefits may now be available.
Do you have any specific tips for the effective filing of a claim?
TWC has opened a vast amount of resources for filing unemployment claims and extended their hours to assist individuals who have questions. Notably, TWC has been assured that benefit seekers will receive benefits from the date they were unemployed and not the date they filed their claim.
Will employers’ unemployment tax rate be affected given the rise of claims we are seeing?
Unemployment tax rates should not be affected during this time if the layoff or the reduction in hours are related to COVID-19. It is imperative that when employers are responding to unemployment claims the employer should clearly note that the layoff or reduction in hours was due to COVID-19 because of a lack of business, or the business having to shut down completely. Notably, the State replenishment tax and State replenishment ratio may slightly increase for every employer due to the number of claims Texas is seeing across the board. More information on the replenishment tax and ratio tax can be found here.
How does the shared work program through TWC operate?
The shared work program is a voluntary program for employers who do not have enough work to keep all of their employees at their full-time hours but do not want to implement layoffs of their staff.
Eligibility requirements are as follows:
- The percentage of reduced hours can be different for different individuals, as long as the reduction in normal weekly hours ranges from 10 percent to 40 percent each week, depending on plan specifications. The range of hours worked may vary under Shared Work rules. TWC calculates the number from the number of hours you specify as normal full-time employment. The figure may differ for various plan participants.
- The reduction in hours must apply to at least 10 percent of the employees in an affected unit.
- A shared work plan must describe how the employees will be notified in advance of the plan, if possible.
- A shared work plan must be an alternative to layoffs and you must provide an estimate of the number of employees who would be laid off if you do not participate in a shared work plan.
- If you currently provide fringe benefits, you must continue to provide these benefits for the employees in the shared work plan. Fringe benefits include health insurance, retirement benefits, paid vacation, holiday or sick leave, or other employee benefits.
To participate, go https://www.twc.texas.gov/news/covid-19-resources-employers and scroll down to “Mass Claims and Shared Work Programs.”
Will my unemployment tax rate be affected by the shared work program?
No. The unemployment tax rate will not be charged if you qualify and voluntarily engage in the shared work program.
Can employees file a partial unemployment claim?
Yes. TWC has a partial unemployment claim option however a few specific requirements must be met to apply. There must be a reduction in hours through no fault of the employee which causes a reduction in earnings that causes the employee to go below a threshold amount of 125% of the weekly benefit amount if they were totally unemployed. Normally, an employee who has about 3/8’s (37.5%) reduction of hours would meet this threshold. With no reduction in hours from their part-time schedule, there will not be a viable partial unemployment claim.
Are salaried employees who had their pay reduced eligible for unemployment benefits?
Likely, no. An employee who is still with the same company but has a reduction in pay may not qualify for unemployment benefits. However, there is a rule called the “20% rule.” This rule applies to anyone who has had more than a 20% reduction in pay which might give him or her cause to voluntarily quit and file a claim with TWC but this is a separate type of claim which an employee may qualify for.
How does TWC calculate the “base period” to determine the amount of unemployment benefit that may be available for and employee?
TWC calculates the base period in quarters.
Your base period is the first four of the last five completed calendar quarters before the effective date of your initial claim. We do not use the quarter in which you file or the quarter before that; we use the one-year period before those two quarters. The effective date is the Sunday of the week in which you apply.
To have a payable claim, you must meet all of the following requirements:
- You have wages in more than one of the four base period calendar quarters.
- Your total base period wages are at least 37 times your weekly benefit amount.
- If you qualified for benefits on a prior claim, you must have earned six times your new weekly benefit amount since that time.
What if my employee was not working when the base period is calculated as stated above?
You may be able to use an alternate base period. However, you must call a TWC Tele-Center at 800-939-6631 to ask if you qualify for an alternate base period.
How do gig workers, independent contractors, etc. qualify for unemployment benefits if they participate in “gig worker” type jobs during this time?
Individuals who participate in “gig worker” like jobs during this time may not qualify for traditional unemployment insurance benefits from Texas because they may not have wages during the relevant base period, explained above to file a claim. However, the CARES ACT allows for unemployment benefits under temporary pandemic assistance which applies to gig workers, independent contractors, etc. It is recommended that these types of individuals apply for unemployment through TWC and allow their application to be rejected for the State portion of benefits and then TWC will “flag” these types of applications and process it to determine if the individual would qualify under PUA and for the additional $600 under the CARES ACT.
When I am ready to re-hire my employees, what if he or she does not want to return because they are making more from unemployment benefits?
When the employer is ready to recall his or her employees back to work, the employer should record the communication in writing. The employer should place the job duties, possible hours, rate of pay, start date, and any other important job-related information in the correspondence.
If the employee rejects the offer, TWC asks that you let the TWC know as soon as possible because then TWC can determine why the employee is denying his or her suitable job offer and may disqualify the employee from further unemployment benefits. Notably, the employer should communicate the job offer in as many forms of communication as possible (text, voicemail, letter, email, etc.). The employer can notify the TWC of the offer via the TWC’s fraud hotline.
What is an unemployment benefit chargeback?
Unemployment benefit chargebacks are amounts of paid unemployment benefits charged to an employer’s tax account for use in calculating the employer’s unemployment tax rate. A chargeback is the total amount of regular unemployment benefits (plus 50 percent of extended benefits, if applicable) paid to a claimant and charged to the base-period employers’ tax accounts. If there are multiple base period employers, the amount of each employer’s chargeback is based on the base period wages it paid. Chargebacks are not money you owe unless you have chosen to be a reimbursing employer. For information on reimbursing employers and protecting your account from reimbursements, see Wage Verification Notice, Reimbursing Employers.
Can employees who have an out-of-state driver’s license apply for unemployment benefits in Texas?
Yes. Federal law allows an employee who is out of work to apply for unemployment benefits in any state where they live, where they have worked, or where their wages have been reported to.
If an employer re-hires some of its employees with proceeds from the Pay Check Protection Program (PPP), does the employer need to inform TWC?
The employee who is currently receiving unemployment benefits should give notice TWC and stop requesting benefits or they should report their earnings to TWC in order to offset the benefits they are receiving. Employers have the option to let TWC know but are not required to. If an employer believes there is fraud taking place the employer may check with TWC.
Can an employer ask the employee for medical documentation in order to return to work?
Generally, yes. However, the employer should proceed with caution when doing so. It’s recommended that the employer consider whether the employee could afford medical clearance, or if that medical attention is currently available. Additionally, the employer should not ask for personal medical information, diagnoses, or a prognosis–only a clearance letter can be requested.
Are there any protections against terminated or resigned employees from just self-certifying that their departure was COVID-related (to protect against fraud/abuse)?
All unemployment claims are investigated on a case-by-case basis. Claimants will be asked why they separated from their last employment. There is little an employer can do to prevent an employee from providing dishonest information at the outset. However, the last employer will receive a Notice of Application for Unemployment from TWC, upon which time the employer can respond to the notice with information on the job separation. TWC will conduct its investigation based on the information received from the parties. In addition, employers who have knowledge of potential fraud or abuse of the TWC unemployment benefits system may report such activity to TWC’s Fraud department via phone at (800) 252-3642 or email at email@example.com.
If a hotel needed to lay off a J-1 visa holder who was on a paid internship program, is the intern able to receive unemployment benefits?
This J-1 intern would likely not qualify for unemployment benefits. Individuals who are legally authorized to work in the United States are eligible to receive unemployment. Normally, once the sponsorship ends under the J-1 visa, the employee is no longer legally allowed to work in the United States, and would by extension not be eligible to receive unemployment benefits. That being said, there would be no harm in the employee filing for unemployment, and if he or she is denied, appeal that decision.
Are employees within a “shared work” program eligible for the extra $600 weekly benefit (under the CARES Act) as well?
Yes. Employees who are receiving partial unemployment benefits through TWC’s Shared Work Program will also be eligible to receive the $600/week as provided under the CARES Act until July 31, 2020.
Will an employer get fined if they do not respond to an unemployment claim?
No. The employer should not get fined if they do not respond to a claim. However, TWC recommends that the employer responds to the claim noting that the employee layoff is due to COVID-19 before the initial deadline to preserve their right to appeal.
We are having issues with employees who file for unemployment benefits getting a message that their SSN does not match their name. Is this a common problem, and how should applicants go about resolving this issue?
It is possible that the individual is a victim of identity theft. Claimants who experience this issue should contact TWC’s Regulatory Integrity Division (RID). Employers with this issue may email firstname.lastname@example.org, and that department will send the issue to the appropriate individual in RID for further investigation.
Are severance payments considered wages for purposes of determining UI eligibility in Texas?
Under TWC’s current rules, employees who receive severance pay or wages-in-lieu of unemployment benefits may be disqualified from receiving unemployment benefits for the period covered by the additional pay, since they are not considered “unemployed” during that period. Employers may wish to clarify, in writing to the employee, the period of time the additional payment is meant to cover and keep documentation of such communication in the event that it is needed in the future.
When will the $600 supplement from CARES act be paid?
Payments have already started to eligible individuals.
Where can my employees check on their unemployment claim status?
An employee can check on the status of his or her claim with Julian Alvarez at the Commissioner Representing Labor at 800-832-2829 or 512-463-2829.
How can an employer contact TWC?
An employer can reach TWC at 800-558-8321 or reach out to THLA to help guide you.
Finally, a number of resources are available to employers across Texas during this time, more information can be found at https://www.twc.texas.gov/news/covid-19-resources-employers.
Additionally, THLA attorneys can answer employment-related questions.