Updates on Texas and Federal CARES Act Unemployment Insurance Benefits 

April 14, 2020

The Texas Workforce Commission has updated its guidance regarding the availability of unemployment insurance benefits, as supplemented by the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act.

The CARES Act provides three enhancements to Texas’s existing unemployment insurance benefits (see Cozen O’Connor’s explanation of ordinary Texas unemployment benefits here):

  1. Pandemic Emergency Unemployment Compensation (PEUC) — applicable to claimants who have exhausted their regular unemployment insurance benefits, and extends regular state-level benefits by an additional 13 weeks.
  2. Pandemic Unemployment Assistance (PUA) — applicable to claimants who are ineligible for regular unemployment insurance benefits, such as part-time workers, independent contractors, gig workers, and self-employed individuals. Provides for unemployment benefits to these otherwise ineligible individuals for up to 39 weeks.
  3. Federal Pandemic Unemployment Compensation (FPUC) — provides an additional $600 per week in unemployment benefits to individuals who qualify for regular state-level benefits, PEUC, or PUA. These benefits are available only until July 31, 2020 (unless extended by congress).

As an example of how FPUC operates, an individual who qualifies to receive $521 per week in regular unemployment benefits (the maximum under Texas law) will receive an additional $600 per week, for a total of $1,121 per week, through July 31, 2020, after which the benefits will revert to their regular amounts. This $600 is available to all employees who qualify for unemployment benefits — even partially unemployed individuals. According to the Department of Labor, “[i]f the individual is eligible to receive at least one dollar ($1) of underlying benefits for the claimed week, the claimant will receive the full $600 FPUC.”

PEUC, PUA, and FPUC are all 100 percent federally funded, which means they are not chargeable to Texas employers’ unemployment insurance tax accounts. The most important update for employers is the TWC’s announcement that Texas employers’ unemployment insurance tax accounts will not be charged for any claims filed due to COVID-19, and benefits paid to a former employee as a result of COVID-19 will not be included in the employer’s future tax rate calculations. See the TWC’s COVID-19 guidance for employers here. The TWC is encouraging employers to provide a detailed reason for an employee’s separation in order to facilitate their determination as to whether a given employee’s benefits will be charged to the employer’s account.

 


Authors

Adam C. Gutmann

Associate

agutmann@cozen.com

(832) 214-3919

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