The State of Texas Unemployment Basics


I get frustrated business owners calling me on the daily about how they don’t quite understand how or why their unemployment insurance premiums have shot up dramatically. And I completely understand their distress.  In my previous roles, I have also felt that frustration.

In my role as an HR consultant to small businesses that don’t have a dedicated HR expert on their team, I’ve learned a couple of vital things that I share with business owners to help them be prepared for responding to a Notice of Application for Unemployment Benefits.

Let’s go over a few basics.

What are unemployment benefits? 

Unemployment benefits provide temporary, partial income replacement for qualified individuals who are unemployed or partially unemployed (working part-time) through no fault of their own. The benefits help unemployed workers who are looking for new jobs. Applicants must meet requirements concerning their past wages and job separation.

Employers pay unemployment insurance taxes and reimbursements, which support unemployment benefit payments. Employees do not pay unemployment taxes, and employers cannot deduct unemployment taxes from employee paychecks.

Who qualifies for unemployment benefits?

To qualify for benefits, your former employees must be either unemployed or working reduced hours — through no fault of their own, such as a layoff, a reduction in hours not related to misconduct, or fired for reasons other than misconduct.

If an employee quits, will he/she qualify for unemployment benefits?

If your former employee chose to end their employment, then the Texas Workforce Commission interprets that as an elective quit. Most people who quit their jobs do not receive unemployment benefits. For example, if they quit their job for personal reasons, such as lack of transportation or to stay at home with their children, they will not qualify for benefits.

Former employees may be eligible for benefits if they quit for one of the reasons listed below:

  • Quit for good cause connected with the work, which means a work-related reason that would make an individual who wants to remain employed leave employment. Examples of quitting for good work-related reasons are well-documented instances of:
    • Unsafe working conditions
    • Significant changes in hiring agreement
    • Not getting paid or difficulty getting the agreed-upon pay
  • Quit for a good reason not related to work, under limited circumstances. Examples include leaving work because:
    • A personal medical illness or injury prevented them from working
    • They are caring for a minor child who has a medical illness
    • They are caring for a terminally ill spouse
    • They have documented cases of sexual assault, family violence or stalking
    • They have entered Commission-Approved Training and the job is not considered suitable under Section 20
    • They have moved with their military spouse

I’ve found that having the right human resources set up is CRITICAL to having a thriving business positioned for growth. Integrating simple business habits will make it easy to respond to notices of application, earnings verification requests, and it will even help manage chargebacks.

Things to do TODAY to ensure you are prepared to answer an unemployment application 

  • Have a progressive discipline policy and stick to it. A progressive discipline policy lets employees know what is expected from them, without ambiguity. It also provides a pathway to end a relationship with a problem employee while maintaining fairness and objectivity. Be sure you document every step of this process because you may be asked to produce discipline reports that state that continued performance at this level may lead to termination.
  • Designate a mailing address. Go on the Employer Benefits Services (EBS) online resource to manage claims online. Submit the designated address to ensure that all Unemployment Insurance mail is sent to the correct address. It’s very common that business owners do not receive correspondence and therefore fail to turn in necessary information. All correspondence has a deadline that must be met and failure to turn in necessary documents may lead to an automatic approval for your former employee.

Building better HR business habits will lead to exponential growth that will have positive ripple effects throughout your business. Better organization habits will also make it simple to respond to any requests from clients, vendors, and business partners.

As the ultimate people person, Celine Perez loves to share why your business needs another type of HR strategy that retains, motivates, and engages your team members. Celine is considered to be the small business owner’s ace in the hole for all things HR.  Her specialties include setting up HR departments/processes for growing businesses, creating compensation plans that avoid confusion and fostering connection, and teaching teams how to communicate best in sticky situations. Celine Perez, SPHR, SHRM-SCP, is the CEO of My HR Firm LLC. My HR Firm is a Small Business Administration (SBA) certified Women-Owned Small Business (WOSB) and proud member of the Women’s Business Enterprise National Council (WBENC).

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Celine Perez