By Linda H. Evans,
Senior Associate.
Last summer, the Texas Workforce Commission (TWC), in conjunction with the Federal Unemployment Tax Act, adopted a new rule that it quietly put into place without most of us noticing. Like many states, Texas normally will correct an employer’s unemployment account if the state finds charges were made improperly. However, this new rule provides that the state will not necessarily correct an employer’s account when benefit charges were improperly made if: 1) the employer is at fault for failing to respond to the TWC’s request for information relating to a claim that was later overpaid; and 2) if the employer has established a pattern of failing to respond timely and/or adequately to requests from the TWC for information relating to the claim for unemployment benefits. This prohibition applies if the employer has a pattern of failing to respond timely, adequately, or failing to respond both timely and adequately. (See Texas Administrative Code, Title 40, Part 20, Chapter 815)
In enacting these amendments, Congress anticipated that the possibility of an employer having an improper charge left on its account would prompt the employer to be more accurate and timely in responding to information requests for future unemployment benefits. And the result would be fewer improper payments to folks who were not eligible for them.
What does this mean for employers? When you receive notice that a former employee has filed for benefits with the TWC and you are going to contest the eligibility for benefits, you should promptly respond with any written documentation you possess showing why you believe the employee is not eligible. Then, if you receive any telephone calls from the TWC, be sure to answer and return them promptly. Failure to do both of these actions could result in the TWC making an award of benefits to someone who is not actually entitled to them and the TWC would not have an obligation to correct its mistake. But, the rule has left a bit of wiggle room for employers. An adequate notification does not mean it has to be perfect, and an employer may show a good reason for failing to provide timely/adequate notice due to circumstances beyond the employer’s control.
And one final tip: If you are going to terminate an employee, be sure to decide ahead of time if you are going to contest the employee’s claim for unemployment benefits. This will determine how you handle the termination process and can make it more likely that you will prevail with the TWC.
