Quick Article Summary

• Texas employees must meet specific earnings and employment separation criteria to qualify for unemployment benefits from the Texas Workforce Commission.
• Employers should proactively prepare detailed employment records, maintain clear documentation on separations, and consistently apply company policies to manage unemployment claims effectively.
• Understanding how to respond promptly and thoroughly to TWC notices and appeals can significantly reduce employer liability and improve outcomes.

For Texas employers, handling unemployment claims through the Texas Workforce Commission (TWC) can be complex and daunting. Mismanagement or delayed responses to claims can lead to increased unemployment insurance costs, legal disputes, and operational disruptions. By understanding how to proactively manage unemployment claims, employers can effectively navigate this process, reduce costs, and mitigate potential risks. This guide covers essential considerations, eligibility criteria, and detailed steps employers must follow to effectively handle unemployment claims in Texas.

Employee Eligibility Requirements for Texas Unemployment Benefits

Before employers can adequately prepare for unemployment claims, they must thoroughly understand the basic eligibility criteria set by TWC.

Understanding Monetary Eligibility for Texas Unemployment Claims

To qualify for unemployment benefits through the Texas Workforce Commission (TWC), former employees must meet certain wage-based criteria known as monetary eligibility. Specifically, TWC requires that claimants demonstrate sufficient earnings within their base period, defined as the first four of the last five completed calendar quarters prior to filing a claim.

To be eligible, employees must satisfy two conditions:

1. Earnings in at Least Two Base-Period Quarters

Claimants must have earned wages in at least two separate quarters within the defined base period. This criterion ensures claimants maintained regular employment rather than short-term or intermittent work. (TWC Monetary Eligibility Guidelines)

Simply put: Employees can’t qualify for unemployment benefits unless they earned wages in at least two separate three-month periods during the year preceding their claim.

2. Total Base-Period Earnings of at Least 37 Times the Weekly Benefit Amount (WBA)

The TWC calculates the claimant’s weekly benefit amount by dividing the highest-earning quarter within the base period by 25, then rounding the result to the nearest dollar. The total earnings across all four quarters must then be equal to or greater than 37 times this weekly benefit amount. (TWC Weekly Benefit Calculation)

Formula for calculating Weekly Benefit Amount (WBA)

To find out the weekly unemployment payment, divide the employee’s best quarterly earnings by 25.

The minimum total earnings required to qualify is then:

Minimum Total Earnings Required

Multiply the weekly benefit amount by 37; that gives the minimum earnings the employee must have made during their base period to qualify.

TWC Minimum Wage Claim Eligibility Calculator

Use our Texas Workforce Claim Eligibility Calculator below to help determine if your employee meets the financial eligibility requirements to file an unemployment claim.

Separation Criteria: Voluntary vs. Involuntary

Eligibility also hinges on the circumstances surrounding an employee’s separation from employment. Typically, unemployment benefits are available to those separated through no fault of their own, such as layoffs, reductions in force, or business closures. Employees who voluntarily quit without “good cause connected with the work” or who are terminated for “misconduct connected with the work” generally are not eligible. Texas Workforce Commission guidelines define misconduct as a willful violation of company policy, deliberate disregard of employer interests, or negligence serious enough to disrupt normal business operations, as outlined in the TWC’s Eligibility & Benefit Amounts guidelines.

Proactive Employer Preparation: Before a Claim is Filed

Employers that successfully navigate TWC claims typically take proactive steps long before an employee files for unemployment benefits.

Maintain Detailed and Accurate Employment Records

From the moment of hire, it is essential to keep detailed and precise employment records. These should include employment applications, wage and payroll records, attendance logs, performance evaluations, disciplinary actions, and signed acknowledgments of policies. Comprehensive recordkeeping serves as essential evidence to support employment decisions and defend against unwarranted unemployment claims.

Establish and Communicate Clear Employment Policies

A clearly defined attendance policy, disciplinary policy, and a handbook detailing workplace expectations and rules are invaluable tools. Employees should regularly acknowledge in writing that they have received and understood these policies. Consistent enforcement and documented acknowledgment help employers demonstrate fair and impartial treatment if unemployment claims or legal disputes arise.

Regular Supervisor Training on Employee Separation

Provide training for supervisors and HR professionals on proper separation procedures. This training should focus on identifying and documenting conduct issues, correctly classifying terminations, and understanding the nuances of TWC’s definition of misconduct. Such training helps prevent procedural mistakes that could inadvertently grant unemployment eligibility.

Responding Effectively to a Notice of Application

When an unemployment claim is filed, the Texas Workforce Commission issues a Notice of Application to the employer. Timeliness and accuracy in responding to this notice are critical.

Utilizing TWC’s Employer Benefits Services (EBS) Portal

The TWC’s Employer Benefits Services (EBS) portal allows employers to manage unemployment claims online efficiently. Upon receipt of the Notice of Application, immediately log into the EBS portal to review the claim and respond promptly. The TWC requires a response typically within 14 days; failure to respond timely can forfeit your rights to contest the claim.

Crafting a Detailed and Fact-Based Response

Clearly outline the circumstances of the employee’s separation, supported by objective documentation. Whether your former employee voluntarily resigned or was terminated for cause, provide explicit dates, instances, and supporting documentation such as warning notices, policy violations, and relevant communications. Providing comprehensive information in your initial response increases your chances of a favorable determination.

Supporting Documentation: A Must-Have

Attach supporting documents, including attendance logs, disciplinary warnings, written policies the employee violated, resignation letters, and performance records. Thorough documentation substantiates your position, enabling TWC adjudicators to make informed decisions quickly.

Navigating Unemployment Claims Appeals

Sometimes, despite your best efforts, the initial determination by TWC may not reflect the facts as you see them. You have the right to appeal an unfavorable ruling.

Filing a Timely Appeal

If you disagree with TWC’s initial determination, file your appeal within 14 calendar days from the date the determination was mailed. Detailed instructions are included in the determination notice you receive from TWC, and you can conveniently file appeals through the EBS portal.

Preparing for and Participating in Appeals Hearings

During the appeal hearing, you’ll have the opportunity to present evidence, call witnesses, and testify regarding the separation. Prepare thoroughly, ensure documentation is complete, and clearly present your narrative. The TWC provides detailed guidance on preparing for these hearings through their Appeals Process page.

After the Appeal: Next Steps

Following the appeal, TWC issues a written decision. If you still disagree with the outcome, further appeals can be made to the Commission and eventually through the court system. Understanding this process in depth is crucial; TWC outlines all further steps clearly in their employer Appeals Handbook.

Considering Termination with Caution

While termination is sometimes justified and necessary, proceeding cautiously and methodically is crucial to avoid wrongful termination claims and increased unemployment costs.

Legal Grounds and Consistent Enforcement

Termination decisions should always align strictly with company policies, documented misconduct, and TWC standards. Consistency and fairness across your workforce help protect against claims of discrimination or retaliation.

Pre-Termination Steps

Before termination, exhaust progressive discipline measures such as written warnings, performance improvement plans, and clearly communicated consequences for continued violations. Thoroughly document each step and retain signed acknowledgments.

Professional HR Support from The Unit Consulting

Handling unemployment claims and employee terminations can be legally intricate and challenging for Texas businesses. At The Unit Consulting, our dedicated HR professionals help you navigate complex TWC unemployment claims, create legally compliant employment policies, and provide training and support throughout disciplinary processes, terminations, and appeals. Ensure your business maintains compliance, mitigates risks, and effectively manages unemployment costs with expert support. Contact The Unit Consulting today and secure your business’s HR compliance and workforce stability.