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TASB Risk Management Fund
INSIDERM

Unemployment Compensation and the CARES Act

August 12, 2020 Mary Barrett

unemployment compensation

In recent weeks, there have been tens of thousands of unemployment claims filed in Texas impacting school districts. The TASB Risk Management Fund (Fund) is in contact with the Texas Workforce Commission (TWC) about how the agency is responding to the historic surge. Here are a few ways you can work with TWC now and in the coming months.

Respond to Request for Earnings Information forms

TWC has started auditing recent UC claims against wages reported by employers for the second quarter of 2020 (April–June). TWC's Benefit Payment Control Division may send a Requests for Earnings Information form to verify each claimant’s actual earnings. Responding to these requests is one of the best ways way you can ensure benefits payments are not made to the employees your district continues to pay. Your account will be credited as any invalid payments are returned to TWC.

Appeal Wage Verification Notices

Unemployment benefits are chargeable to all employers in a claimant’s base period. Frequently, claims can include more than one employer. However, only the last employer will receive a notice that a claimant has filed a claim. If that claim is granted, all employers are subject to charge, even if the claimant voluntarily quit or was fired for work-connected misconduct from the previous employer. To protect your account from being charged, please appeal any form labeled Wage Verification Notice – Reimbursing Employer. Your appeal can protect your account and you will not have to pay on these claims. These claims can sometimes amount to 40 percent of your total bill, so it is critical to appeal them and not simply verify that the wages are accurate.

Consider an extension

TWC has extended the payment deadline for second quarter (April–June) from August 31, 2020, to December 31, 2020, and will waive interest and penalty charges for the same period. If you pay TWC directly each quarter, you may want to discuss timing of your payment with your financial audit firm as there are accounting implications for timing of payment and recognition of the CARES reimbursement.

Reimbursement credits

Under the federal CARES Act, reimbursing employers, like school districts, are due up to 50 percent credit for their payments. TWC has not determined how CARES Act credits will be applied, or if districts must pay in advance of receiving credit. We are working with TWC to identify the practical implications of various implementation scenarios.

It is not clear yet how the president's recent executive action regarding additional unemployment benefits will affect reimbursing employers or how the action can be implemented in the state's current unemployment benefit system.

Review your claims

Although most school districts continued to pay most of their employees this spring, closure of school facilities reduced the need for substitute teachers and other non-contract employees resulting in increased unemployment benefit claim filings. Claims for unemployment benefits were filed by:

  • Substitute teachers
  • Employees who may not have understood they would continue to be paid
  • Employees who had left school district employment but lost a subsequent job and whose eligibility period included their district work
  • Employees who lost second jobs 

We have seen evidence that some claims filed are not valid. Claimants may have been previous employees of the district or filed for unemployment because they lost a second job but continued to be paid by the district. Some member organizations have also reported fraudulent claims based on identity theft. It is important to review your C58R report (Fund members may access through online reports) and take action with TWC to invalidate claims that your district is not responsible for.

Contact us for help

Fund members with Unemployment Compensation coverage can email TASB Unemployment Compensation Attorney James Ezell at james.ezell@tasb.org for help accessing reports or responding to TWC.

Tagged: claims, coronavirus, COVID-19, "Risk Trends", "wage reporting"