Texas Unemployment Insurance Updates: What Texas Employers Need to Know
Thursday, April 16, 2020

As we previously reported, Texas cities have responded to the COVID-19 pandemic by issuing “Stay at Home” Orders, essentially halting all non-essential business operations that cannot be conducted remotely.  As a result, many workers have been furloughed, laid off, or terminated, and are in the process of seeking monetary relief through unemployment insurance (“UI”) benefits.  As of today, the Texas Workforce Commission (“TWC”) has helped more than 1.2 million Texans apply for unemployment benefits since March 14, 2020, and paid out more than $400 million in benefits.

Recent Updates to Texas Unemployment Insurance Benefits

In response to this overwhelming increase in applications for UI benefits, the TWC updated its website to include a COVID-19 Resource webpage for employers.  The webpage features a helpful list of answers to Frequently Asked Questions (“FAQs”) that may arise for Texas employers facing COVID-19-related challenges, including a surge in UI benefit claims.

To address some of these challenges faced by employers and employees, the following modifications have been enacted:

  • Texas UI benefits paid as a result of the COVID-19 pandemic will not be charged against employer accounts. Employers should carefully review benefit-chargeback statements to ensure that they have not been charged for any UI benefits paid to employees as a result of the COVID-19 pandemic.  Any inappropriate charges should be disputed within the 30-day time limit by including a copy of the shutdown order with the erroneous unemployment claim, and an explanation that the closure was mandated by local or state order.  Note, however, that if the reason for the work separation was merely a health precaution, then the employer is unlikely to be entitled to chargeback protection;

    • The TWC has eliminated the one-week waiting period for employees to file for UI benefits, so that workers in Texas are able to receive benefits immediately after unemployment benefit applications are approved;

    • As part of the COVID-19 pandemic relief effort, the TWC has suspended the work search requirement that normally must be met in order for the employee to be eligible for UI benefits;

  • The TWC has extended the deadline for first quarter UI tax reports and payments from April 15, 2020 to May 15, 2020. Employers may begin filing on April 15, 2020; and

  • Employers who lay off their employees temporarily or permanently, as a result of COVID-19, are encouraged to submit a “Mass Claim” for unemployment benefits on behalf of all impacted employees. The Mass Claims program streamlines the UI benefit claims process for employers, and employers may submit basic information about the employees to initiate claims for their unemployment benefits.

Texas Shared Work Program

As an alternative to a mass lay-off in response to the COVID-19 pandemic, the TWC encourages employers to allow employees to work from home whenever possible, or to engage in the Texas Shared Work Program (“SWP”).  The SWP, which was in place prior to the COVID-19 crisis, is a voluntary program administered by the TWC, and provides opportunities for employees to supplement lost wages that are the result of reduced hours, with partial UI benefits. Employers are eligible for the SWP when employees that are part of the same unit have had their hours reduced by at least 10%, but not more than 40%.  The reduction in hours must affect at least 10% of employees in the unit.  Employees who do not wish to participate may choose not to participate in an employer’s SWP.  Note that the SWP is not available to seasonal employers during an off-season.

The TWC also clarified that employees who do not qualify for regular Texas UI benefits are not eligible to participate in a SWP. Those claimants may, however, be eligible for Pandemic Unemployment Assistance (“PUA”), which is part of the federal Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Among other things, PUA provides supplemental benefits for workers affected by the COVID-19 pandemic, who would not ordinarily qualify for UI benefits.  More information about PUA and the CARES Act is available here and here.


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