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TASB Risk Management Fund
INSIDERM

What Makes the Unemployment Process Unique for School Districts?

April 28, 2020 James Ezell

unemployment compensation

School districts face unique challenges with the Unemployment Compensation process. Issues unique to schools include taking regularly scheduled breaks throughout the year as well as using as-needed employees like substitutes. Learn more about this process and how to navigate it successfully during this unprecedented time and into the future.

Scheduled breaks

Reasonable Assurance is a provision that exists in the Texas Unemployment Compensation Act to protect school districts during the summer and other scheduled breaks. The Letter of Reasonable Assurance (LRA) is a written agreement from the school that an employee can expect to return to the same or similar job after a scheduled break, for example, in the next school year. 

An LRA should be issued to noncontract employees, including substitutes, food service workers, teacher aides, paraprofessionals, bus drivers, and any other personnel who will not be working during a scheduled break but are expected to return after the break is over. Employees cannot receive unemployment benefits chargeable to school districts if they have reasonable assurance that they will return to work after the scheduled break.

Unscheduled breaks

The LRA does not protect the district during the school year or unexpected closures during the 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 considered laid off in between day-to-day assignments during the year.

How to treat the COVID-19 closure

With the current closure due to the COVID-19 pandemic, the LRA does not protect school districts from these claims, which will most likely need to be paid. School employees who are not working and not receiving paychecks from the district can file for unemployment benefits for time not worked through the end of the scheduled academic year. 

We recognize you may have additional Unemployment Compensation questions given that schools are currently closed due to COVID-19. Learn answers to frequently asked questions about COVID-19 and Unemployment claims fielded by TASB Risk Management Services Unemployment Compensation Attorney James Ezell. 

The claims process

The Texas Workforce Commission (TWC), which handles unemployment claims for our state, usually categorizes separations three ways—the employee quit, was fired, or was laid off. When someone files a claim for unemployment benefits, the 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.

Generally speaking, claims are denied for employees who quit for personal reasons or are fired for work-connected misconduct. Claims are granted for those employees who lose their jobs through no fault of their own, such as a layoff or temporary work stoppage.

TWC decides who qualifies for benefits, not the employer or the claimant. There can be disagreement on the reasons for separation, so TWC has a robust appeals process that starts with a claims intake agent, goes through an appeal process with hearing officers, and ends with the office of the three TWC commissioners. Parties utilize this process to determine if a claim is paid. Once a decision is made, there is a second process to determine the value of the claim and the amount of benefits to be paid.

Calculating benefits

TWC calculates any benefits paid based on all the wages paid to the employee who is filing a claim, or claimant, from all employers, for four quarters. Benefits are then charged proportionally to all the employers in those four quarters. Claimants who work at multiple districts will receive benefits from all applicable employers on a proportional basis, depending on wage amounts and when earned.

Example

Say a claimant worked one day as a substitute in the month of September in a new school year, but doesn’t have any additional work, so files a claim for unemployment that month. Learn what the phases would be in calculating benefits for this claim:

The filing quarter

In our example, any wages earned in September would not be used to calculate benefits because TWC has not received wage data for a quarter that has not ended yet. We call this the filing quarter. September is in the third calendar quarter (July, August, and September).

The lag quarter

The quarter just prior to the filing quarter is also not used because it allows employers a grace period for letting go employees if needed. This is called the lag quarter. In our example, this would be the second calendar quarter (April, May, and June).

The base period

Taking out the filing and lag quarters means the four quarters TWC would use to calculate benefits for our example would be all four quarters of the previous year. We call these four quarters the base period. The wages the claimant earned during the base period are used to calculate the weekly wage amounts of unemployment benefits.

Substitutes

School districts need substitutes. It is an inescapable fact of operations as 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.

Hiring substitutes is an expense you can budget for, but how do you manage unemployment claims for multiple subs, some of whom may have only worked one day for your district?

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.

Substitutes are treated as laid off in between assignments, which means they may file for unemployment from a single school district multiple times throughout the year. Once the first claim is filed, subsequent claims for that year—up to 11 months later—use the same base period. The base period will reset on the one-year anniversary of the first claim. If the claimant just started working as a substitute for your district, they may be eligible for benefits, but your school district will not be charged for the benefits because the claimant has not worked there long enough. If it is one year later and the substitute files a new claim, the wages your district paid the employee will be used to calculate benefits at that time.

Weekly wage amounts

The TWC calculates an employee’s benefit amounts based on past wages. The current minimum weekly benefit amount is $69, and the maximum is $521. This adjusts every year. Claims are payable for up to 26 weeks, so the maximum claim total is $13,546. TWC has an online benefits estimator tool that can show potential unemployment benefit amounts based on salary.

Annual income before employment Approximate weekly wage for UC benefits
$53,000 $521
$43,000 $430
$33,000 $330
$23,000 $230
$6,900 $69

Additional resources

The TWC and U.S. Department of Labor (DOL) are updating their websites as new information on the topic is available:

How the Fund can help

Contact Ezell with additional questions at james.ezell@tasb.org or 800.482.7276, ext. 2857. 

Editor's note: This article was originally published in June 2011 and has been updated for accuracy and comprehensiveness. 

 

Tagged: benefits, coronavirus, COVID-19, "Fund Basics"