School districts face the unique challenge of substitutes filing for unemployment benefits. It is probably one of the most common situations we receive questions about and one of the hardest to explain. Let’s dive into it.
School districts need substitutes. It is an inescapable fact of operations. Regular employees, including teachers, custodial staff, food service staff, and bus drivers are going to miss work sometimes; and their absence will create the need to hire someone to fill in. To further complicate matters, there never seem to be enough substitutes available. This can cause a district to put as many people on the substitute list as it can to fill that need.
Hiring substitutes is an expense you can budget for, but what happens when you get an unemployment claim for someone who subbed just one day for you? Are you responsible for paying unemployment benefits for one day of work as part of a temporary assignment?
The claims process
First, let’s go through the process of how the Texas Workforce Commission (TWC) handles unemployment compensation claims. When someone files a claim for unemployment benefits, TWC must send notice to the last place that person worked, even if it’s a school district for which the person worked one day as a substitute. It is up to that school district employer to reply to TWC with information about why the person is no longer working there.
TWC usually categorizes separations three ways—the person quit, was fired, or was laid off. Typically, a substitute worked a temporary assignment that ended; they didn’t quit; and weren’t fired. The remaining category, layoff, is the eligible separation category that applies.
The next step is to calculate the benefits based on all the wages from all employers paid to the claimant in the past five quarters minus the most recent completed quarter (for a total of four quarters). Benefits are then charged proportionally to all the employers in those four quarters. If the person just started working as a substitute, they may be eligible for benefits, but the benefits are not going to be charged to the school district because they have not worked there long enough.
Let’s use a hypothetical claimant who worked one day as a substitute in the month of September 2018 in a brand new school year. September is in the third calendar quarter (July, August, and September). Anyone filing a new claim for unemployment benefits in September 2018 will not use wages earned in that quarter because it isn’t over with yet (TWC does not have wage data until you report it to them after the quarter is over). We call this the filing quarter.
That means the most recently completed fifth quarter in our example would be the second calendar quarter (April, May, and June of 2018). This is the quarter that is not used and is tossed out (we call this the lag quarter). That means the four quarters TWC would use to calculate benefits would be the first quarter of 2018 (January, February, and March) and the fourth, third, and second quarters of 2017 (April through December 2017). We call these four quarters the base period.
Substitutes are treated as laid off in between assignments, but the benefits are not charged to the school district if the person just started working there this year. They keep the same base period for an entire year. The continued claims that the substitute files each week still use the same base period, even if it is up to 11 months later. It resets on the one year anniversary of the first claim and then shifts the base period forward a year. This is when substitutes can start having their school wages used to calculate benefits, so be mindful of those who have been on your substitute list and file claims each year.
Considerations for hiring substitutes
It is difficult to have enough substitutes to fill all available slots on a moment’s notice, but it is important to properly evaluate potential substitutes. Screen their work history like you would any other potential employee. If a person has been fired or has quit from the school district, they might not be the best fit for the substitute list.
If someone was previously fired from your district for misconduct, the claimant would generally be disqualified from receiving benefits. You would challenge that claim and try to prevent the claimant’s benefits being charged to your account. However, if that same person is placed on your substitute list and works even one day as a substitute, the door is open to them as a claimant to use their full time wages from the previous year. As an employer, you’ve also lost the right to fight the claim on grounds that you fired them for misconduct because their last employment for you was as a substitute on a temporary basis, which would make it a layoff. Their full-time wages from their previous position will then be used as the base period for their unemployment benefits.
Letters of Reasonable Assurance and scheduled breaks
The function of a Letter of Reasonable Assurance (LRA) is to protect schools from claimants who file unemployment claims over scheduled breaks at least a week long, between semesters, and during the summer. According to TWC, employees are technically separated from employment when they are not working, even over scheduled breaks. To protect schools, a special provision exists in the Texas Unemployment Compensation Act, reasonable assurance of returning to work when the break is over.
Every employee not working under a contract should be issued an LRA if they will have an interruption in working of a week or longer, including substitutes, administrative staff, bus drivers, food service workers, and maintenance employees. Workers who are not on a contract but who work year-round do not need to be issued an LRA.
The LRA is not a contract or guarantee of continued employment for the next year. It merely informs the employee that he or she has a reasonable expectation that the same type of work will be available when school resumes.
Employees can file for unemployment benefits over a scheduled break since they are not working, but their school wages cannot be used in the calculation for benefits if they have reasonable assurance that they will return to work after the scheduled break is finished. Wages from the claimant’s other employers, such as part-time jobs from non-educational institutions, can still be used by TWC to calculate and pay benefits.
Please keep in mind that the LRA only protects a school district from employees filing for benefits while off work for school holidays or between terms. It does not protect the district during the school year. For example, there are no scheduled breaks of a week or more in September or October, so sending an LRA to TWC offers no protection. Substitutes are still considered laid off in between day to day assignments during the year.
Issuing an LRA
In order to prove that a person is expected to come back after a break, an employer needs to be able to show TWC a copy of the claimant’s current LRA. The best practice is to issue all new substitutes an LRA when they sign up to be on the substitute list and then another one each year before summer break begins. Letters should be issued to employees expected to return to the same or similar job after the school break.
Managers should have employees sign the letter in your presence, photocopy it, and give the employee a copy immediately. This ensures that when an employee files for benefits, you will be able to produce the letter for TWC. Do not mail the letter with instructions for the employee to return it. Chances are, not everyone will follow the instructions and send it back. Many districts are now using electronic forms online to issue an LRA and track receipt of them, which is also fine.
Finally, if an employee refuses to sign the LRA, document the refusal by having a witness sign the letter instead. Photocopy the letter and give a copy to the employee. Failure to sign an LRA can be treated as a voluntary resignation from employment, thus disqualifying the employee from receiving benefits. A simple sentence that reads “failure to sign and return this letter of reasonable assurance will be treated as a voluntary resignation by the employee” is enough.
A sample LRA is available to members of the TASB Unemployment Compensation program with a valid myTASB login.
For more information about unemployment claims or letters of reasonable assurance, call James Ezell at 800.482.7276 x2857 or email email@example.com.
Editor's note: This article was originally published in June 2011 and has been updated for accuracy and comprehensiveness.