CHAPTER 815. UNEMPLOYMENT INSURANCE
PROPOSED RULES WITH PREAMBLE TO BE SUBMITTED TO THE TEXAS REGISTER.
THIS DOCUMENT WILL HAVE NO SUBSTANTIVE CHANGES BUT IS SUBJECT TO
FORMATTING CHANGES AS REQUIRED BY THE TEXAS REGISTER.
ON NOVEMBER 15, 2006, THE TEXAS WORKFORCE COMMISSION PROPOSED THE
BELOW RULES WITH PREAMBLE TO BE SUBMITTED TO THE TEXAS REGISTER.
Estimated Publication Date of the Proposal in the Texas Register: December 1, 2006
Estimated End of Comment Period: January 2, 2007
The Texas Workforce Commission (Commission) proposes amendments to the following sections of Chapter 815 related to Unemployment Insurance:
Subchapter B, Benefits, Claims, and Appeals, ?815.20
Subchapter C, Tax Provisions, ?815.107 and ?815.109
The Commission proposes the following new sections of Chapter 815 related to Unemployment Insurance:
Subchapter C, Tax Provisions, ?815.116, ?815.134, and ?815.135
Subchapter D, Farm and Ranch Labor, ?815.150
PART I. PURPOSE, BACKGROUND, AND AUTHORITY
PART II. EXPLANATION OF INDIVIDUAL PROVISIONS
PART III. IMPACT STATEMENTS
PART IV. COORDINATION ACTIVITIES
PART I. PURPOSE, BACKGROUND, AND AUTHORITY
The purpose of the proposed Chapter 815 rules change is to:
—implement House Bill (HB) 3250, enacted by the 79th Texas Legislature, Regular Session (2005), which amends Title IV of the Texas Labor Code, the Texas Unemployment Compensation Act (TUCA), Chapter 204, Subchapter E, Acquisition of Experience-Rated Employer, by limiting the conditions under which the transfer of Unemployment Insurance (UI) compensation experience between business entities may occur; and requiring the Commission to establish, by rule, procedures to identify the transfer or acquisition of a business for the purposes of identifying State Unemployment Tax Act (SUTA) dumping;
—provide clear direction for UI claimants and employers, without creating an undue bureaucratic burden in navigating the UI and Tax systems; and
—ensure operation of efficient, cost-effective systems that fulfill the requirements of state and federal law.
PART II. EXPLANATION OF INDIVIDUAL PROVISIONS
(Note: Minor, nonsubstantive, editorial changes are made that do not change the meaning of the rules and, therefore, are not discussed in the Explanation of Individual Provisions.)
SUBCHAPTER B. BENEFITS, CLAIMS, AND APPEALS
The Commission proposes amendments to Subchapter B, as follows:
?815.20. Claim for Benefits
Section 815.20 adds Internet filing as a method for unemployed individuals to file UI claims and specifies that the current restrictions to designated hours and days of claim filing do not apply to online initial claim filers or those who request payment of benefits online because the Internet is available 24 hours a day.
SUBCHAPTER C. TAX PROVISIONS
The Commission proposes amendments to Subchapter C, as follows:
?815.107. Reports Required and Their Due Dates
Section 815.107(a) specifies that employers may request, and the Agency may grant, a hardship exemption from filing reports and formats in the required format. The Agency does not intend to implement specific requirements for how the hardship exemption request must be submitted by an employer. The Agency will accept the notification by telephone or in writing, and will develop a system to provide confirmation numbers to employers who request hardship exemptions.
Section 815.107(a)(3)(A)(i) lowers the existing threshold from 250 or more employees to 10 or more employees for employers who must file quarterly benefit wage credit reports on magnetic or electronic media. This rule change is effective July 1, 2007. The Agency will continue ongoing notification initiatives to ensure that entities covered by this new threshold understand that compliance will be required following the effective date of the rule change.
Section 815.107(a)(3)(A)(ii) lowers the existing threshold from 250 or more employees to 10 or more employees for other entities, including agents reporting on behalf of multiple employers, who must file quarterly benefit wage credit reports on magnetic or electronic media. This rule change is effective July 1, 2007. The Agency will continue ongoing notification initiatives to ensure that entities covered by this new threshold understand that compliance will be required following the effective date of the rule change.
Section 815.107(a)(3)(B) lowers the existing threshold from less than 250 employees to less than 10 employees for employers who may file quarterly benefit wage credit reports on magnetic or electronic media. This rule change is effective July 1, 2007. The Agency will continue ongoing notification initiatives to ensure that entities covered by this new threshold understand that compliance will be required following the effective date of the rule change.
New ?815.107(a)(3)(D) specifies that a quarterly benefit wage credit report filed in an approved medium shall contain both a wage credit report and a summary report. This rule change is effective July 1, 2007. The Agency will continue ongoing notification initiatives to ensure that entities covered by this new threshold understand that compliance will be required following the effective date of the rule change.
?815.109. Payment of Contributions and Reimbursements
Section 815.109(f) removes the 60-day limit on extensions past the due date for payment of contributions due.
Removal of the 60-day limit on extensions provides the Agency with the flexibility necessary to respond to employers facing extreme circumstances, such as natural disasters, and is consistent with the corresponding extension provisions included in ?815.107(b)(3).
Section 815.109(g) requires all agents or other entities making a payment on behalf of an employer to furnish an allocation list on magnetic or electronic media using a format prescribed by the Agency. Currently, agents or other entities making a payment on behalf of 20 or more employers must furnish an allocation list on magnetic or electronic media.
The number of service agents submitting remittance allocation lists for their clients using a paper list has diminished over the years; only a very small number still submit the list in this manner. The most efficient and widely used process, for both the Agency and the service agent, is an electronic submission of the allocation list with the electronic wage reports. This change is consistent with other initiatives to increase use of technology by all customers conducting business with the Agency.
?815.116. Identification and Tracking of Transfers and/or Acquisitions of Businesses
New ?815.116 implements the portion of HB 3250 that requires the Commission, by rule, to establish procedures to identify the transfer or acquisition of a business.
New ?815.116(a) states that the Agency will employ an electronic method of tracking the reporting of employees and wages to help determine instances of improper reporting by employers.
New ?815.116(b) provides that to aid the Agency in its determination, upon request and as determined necessary by the Agency, employers shall provide information sufficient to enable the Agency to determine:
(1) the status of the employing unit under investigation and whether the employer is liable under the Act;
(2) the proper employer of the employees reported and verify whether the wages are reported by the proper entity;
(3) the relationship between the predecessor or successor entity and whether a mandatory transfer of compensation experience is in order; and
(4) the correct calculation of the tax rate assigned to the employer.
?815.134. Employment Status: Employee or Independent Contractor
New ?815.134 clarifies that, for the purposes of determining employee or independent contractor status, the Agency shall use the guidelines contained in ?821.5 of this title.
?815.135. Voluntary Election by Employers
New ?815.135(a) specifies that employers electing coverage under Chapter 206 of TUCA shall make the election in writing on a form specified by the Agency or by a prescribed electronic equivalent.
New ?815.135(b) is added to specify that employers electing to pay reimbursements shall make the election in writing on a form specified by the Agency or by a prescribed electronic equivalent, and in compliance with Chapter 205, Subchapter A, of TUCA.
SUBCHAPTER D. FARM AND RANCH LABOR
The Commission proposes new Subchapter D, as follows:
?815.150. Definition of Terms
New ?815.150 defines terms relating to farm and ranch labor when used in implementing TUCA ?201.028, ?201.047, and ?204.009.
New ?815.150(1) defines "agricultural association" as a nonprofit or cooperative association of farmers, growers, or ranchers incorporated or qualified under state law, which recruits, solicits, hires, employs, furnishes, or transports migrant or seasonal agricultural workers.
New ?815.150(2) defines "agricultural employer" as an individual who owns or operates a farm, ranch, processing establishment, cannery, gin, packing shed, or nursery or who produces or conditions seed, and who either recruits, solicits, hires, employs, furnishes, or transports migrant or seasonal agricultural workers.
New ?815.150(3) defines "farm labor contracting activity" as the recruiting, soliciting, hiring, employing, furnishing, or transporting of migrant or seasonal agricultural workers.
New ?815.150(4) defines "farm labor contractor" as an individual, other than an agricultural employer, an agricultural association, or an employee of an agricultural employer or agricultural association, who, for any money or other valuable consideration paid or promised to be paid, performs any farm labor contracting activity.
New ?815.150(5) defines "farm and ranch labor" as all services performed:
(A) on a farm or ranch in the employ of an individual in connection with cultivating the soil; raising or harvesting an agricultural or horticultural commodity, including the raising, shearing,
feeding, caring for, training, and management of livestock, bees, poultry, and fur bearing wildlife; or
(B) in the employ of the owner, tenant, or other operator of a farm or ranch, in connection with the operation, management, conservation, improvement, or maintenance of such farm or ranch and its tools and equipment, if the major part of such service is performed on a farm or ranch.
New ?815.150(6) defines "labor agent" as an individual in Texas who for a fee offers, attempts to procure, or procures employment for employees; or without a fee offers, attempts to procure, or procures employment for common or agricultural workers; or any individual who for a fee attempts to procure or procures employees for an employer; or without a fee offers or attempts to procure common or agricultural workers for employers; or any individual, regardless of whether a fee is received or due, who offers, attempts to supply, or supplies the services of common or agricultural workers to any individual.
New ?815.150(7) defines "migrant worker" as an individual who is employed in farm or ranch labor of a seasonal or temporary nature and who is required to be absent overnight from his or her permanent place of residence, provided the individual is not a temporary nonimmigrant alien who is authorized to work in agricultural employment in the United States under 8 U.S.C. ?1101(a)(15)(H)(ii)(a) and ?1184(c).
New ?815.150(8) defines "orchard" as a farm devoted primarily to the planting, cultivating, growing, or harvesting of fruits or nuts.
New ?815.150(9) defines "other farm or ranch laborer" as an individual employed in farm or ranch labor or who is neither a seasonal worker nor a migrant worker.
New ?815.150(10) defines "seasonal worker" as an individual who is employed in farm or ranch labor of a seasonal or temporary nature and is not required to be absent overnight from his or her permanent place of residence, provided the individual is not a temporary nonimmigrant alien who is authorized to work in agricultural employment in the United States under 8 U.S.C. ?1101(a)(15)(H)(ii)(a) and ?1184 (c).
New ?815.150(11) defines "truck farm" as a farm on which fruits, garden vegetables for human consumption, potatoes, sugar beets, or vegetable seeds are produced for market.
New ?815.150(12) defines "vineyard" as a farm devoted primarily to the planting, cultivating, growing, or harvesting of grapes.
PART III. IMPACT STATEMENTS
Randy Townsend, Chief Financial Officer, has determined that for each year of the first five years the rules will be in effect, the following statements will apply:
There are no estimated increases in cost to the state and to local governments expected as a result of enforcing or administering the rules.
There is an estimated cost reduction to the Agency of approximately $371,000 per year if all of the employers with between 10 and 250 employees—the new threshold for mandatory electronic
submission of reports—submit those reports electronically.
There are no estimated cost reductions to local governments as a result of enforcing or administering the rule
There is an estimated increase in excess of $1 million per year in revenue to the Unemployment Trust Fund as a result of enforcing or administering the rule. The rigorous statutory changes, coupled with the detection system, serve as deterrents to employers engaged in State Unemployment Tax Avoidance (i.e., SUTA dumping).
There are no estimated increases or losses in revenue to local governments as a result of enforcing or administering the rule.
There are no foreseeable implications relating to costs or revenue of the state or local governments as a result of enforcing or administering the rules, aside from those estimated savings to the Agency and those revenues to the Unemployment Trust Fund noted above.
There may be anticipated economic costs to persons required to comply with the rules. It is possible (or likely) that companies employing 10 persons or more already will have the minimum requirements to comply with the rule (e.g., a computer and Internet connectivity) or a contractor perhaps performing accounting, payroll, or reporting functions that has such resources. Therefore, while there may be anticipated economic costs to persons required to comply with the rules, these costs are not estimated to be significant. Section 815.107(a) of the proposed rules provides that the Commission may waive the electronic filing requirements for employers requesting a hardship exemption.
There may be anticipated adverse economic impact on small or microbusinesses as a result of enforcing or administering the rules. As employers requesting a hardship exemption under ?815.107(a) of the electronic filing requirements may include small and microbusinesses, the Commission authorization of the exemption would provide appropriate mitigation for those classes of employers.
Mark Hughes, Director of Labor Market Information, has determined that there is no significant negative impact upon employment conditions in the state as a result of the rules.
The Agency hereby certifies that the proposed rules have been reviewed by legal counsel and found to be within the Agency's legal authority to adopt.
LaSha Lenzy, Director of the Unemployment Insurance Division, has determined that for each year of the first five years the rules are in effect, the public benefit anticipated as a result of
enforcing the proposed amendments will be to ensure compliance with federal and state requirements.
PART IV. COORDINATION ACTIVITIES
In the development of these rules for publication and public comment, the Commission sought the involvement of each of Texas' 28 Boards and the TWC Advisory Committee. The Commission provided the policy concept to each of these groups for consideration and review. During the rulemaking process, the Commission considered all information gathered in order to develop rules that provide clear and concise direction to all parties involved.
Comments on the proposed rules may be submitted to TWC Policy Comments, Workforce and UI Policy, 101 East 15th Street, Room 440T, Austin, Texas 78778; faxed to 512-475-3577; or e-mailed to TWCPolicyComments@twc.state.tx.us. The Commission must receive comments
postmarked no later than 30 days from the date this proposal is published in the Texas Register.
The rules are proposed under Texas Labor Code ??301.0015 and 302.002(d), which provide the Texas Workforce Commission with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of Agency services and activities.
The proposed rules affect Texas Labor Code, Title 4.
Chapter 815. UNEMPLOYMENT INSURANCE
SUBCHAPTER B. BENEFITS, CLAIMS, AND APPEALS
?815.20. Claim for Benefits.
An unemployed individual who has no current benefit year and who wishes to claim benefits shall report to a representative of the Agency in a manner, including telephonic, Internet, or other means, that the Agency may approve, and file a claim for benefits. Before receiving benefits a claimant shall register for work with the public employment office, including workforce centers, serving the individual's area of residence, as provided in paragraphs (3) and (7) of this section, unless exempt from the requirement.
(1) In case of a mass layoff by an employer, if the last employing unit involved
makes an appropriate request, the Agency may accept, in lieu of an initial
claim from each individual, a list furnished by the last employer of the
individuals to be laid off and who wish to file initial claims for benefits. The
list shall reflect, with respect to each individual, all information normally
required on the initial claim by the Agency, except the reason for separation.
If the Agency approves the request, the listing then may be used by the Agency
as an initial claim for each individual on the list.
(2) After an individual files a valid initial claim, which establishes the claimant's
benefit year, the claimant may, during the benefit year, file subsequent
continued claims, weekly or biweekly, by telephonic means, facsimile (fax)
transmission, mail, common carrier, Internet, or other means as the Agency
may approve in writing, but at intervals of no less than seven consecutive days.
A claimant shall file all claims by telephonic means, in writing, or orally,
during the hours, days, and weeks directed by Agency representatives. Internet
filing is available 24 hours each day. If at any time during the benefit year,
more than 30 days have elapsed since the filing of the claimant's last claim, the
claimant shall file an additional or reopened claim for benefits as defined in
?815.1 (relating to Definitions) and shall comply with all eligibility
requirements for the claims. A claimant who exhausts regular benefits may
file continued claims for extended benefits as referenced in ?815.26 (relating
to Extended Benefit Period Announcement) in the same manner in which the
claimant filed claims for regular benefits, but the claimant's claims for
extended benefits may be for benefit periods subsequent to the end of the
claimant's benefit year.
(3) An individual who files a claim for benefits shall comply with all requirements
of the public employment office in which the claimant files an application for
work that are necessary to establish a valid registration for work in that public
employment office. The claimant shall comply with an Agency
representative's requests, whether oral or written, that are reasonably designed
to inform the claimant of the claimant's rights and responsibilities in filing a claim for benefits. The claimant also shall:
(A) provide evidence, upon request, to establish the claimant's correct Social
Security account number;
(B) file all claims in the manner directed by the Agency, whether on Agency-
provided forms or by telephonic, Internet, or other means approved by the
Agency for claims purposes;
(C) supply all information within the claimant's knowledge, which is
necessary to determine the claimant's rights to benefits under the Act;
(D) sign all provided claims forms personally for the claims that are filed in
person or by mail or common carrier; and
(E) submit all claims filed by mail, common carrier, hand delivery, or by other
means, including telephonic or Internet, as instructed by the Agency, in
accordance with the terms of this section.
(4) An individual may file a claim by mail, common carrier, hand delivery, or by other means as the Agency may approve, in writing in any of the following circumstances:
(A) Conditions exist that make it impracticable for the Agency representative
to take claims by telephonic, Internet, or other approved means; or
(B) The Agency finds that the claimant has good cause for failing to file a
claim by telephonic, Internet, or other approved means.
(5) If a claimant's answer to a question on a claim filed with the Agency creates uncertainty about the claimant's credibility, or a lack of understanding, or the claimant's record shows that the claimant previously filed a fraudulent claim; then the claimant may be required to file written claims on an Agency-approved form in a manner prescribed by the Agency in writing. A claimant required to file a claim under this subsection shall continue to file the claim in the prescribed manner, until the Agency determines that the reason no longer exists and directs otherwise in writing.
(6) The following provisions shall apply to the disqualification provisions of the Act, Chapter 207, Subchapter C, concerning disqualification for benefits.
(A) The term "employment" in the Act, Chapter 207, Subchapter C, shall be
interpreted and applied to mean employment as defined in the Act.
(B) The disqualification to be imposed against an individual who has left work
to move with a spouse, as provided in the Act, ?207.045(c), shall be construed to mean both a benefits (money payments) and a benefit period (time period) disqualification; and such disqualification shall be restricted in its application to apply only to the range from six weeks to 25 weeks.
(C) Agency employees are authorized to administer oaths to claimants in an effort to verify that the requalifying requirements of the Act, Chapter 207, Subchapter C, concerning employment or earnings, have been satisfied.
(D) An employer identified as the employer by whom the claimant was employed, for purposes of satisfying the requalifying requirements of the Act, Chapter 207, Subchapter C, shall be afforded 14 days within which to respond to notice by the Agency of the filing of an additional claim by the claimant.
(E) In order to satisfy the requirement of the Act, Chapter 207, Subchapter C, concerning returning to employment and working for six weeks, a "work week" shall be defined as seven consecutive days during which the claimant has worked at least 30 hours.
(F) Disqualifying separations, new benefit year, and extended benefit period.
(i) A claimant filing an initial claim, continued claim, or additional
claim shall be disqualified from receiving benefits if the separation
from the claimant's last work is a disqualifying separation as defined
in the Act, Chapter 207.
(ii) If a work separation in a previous benefit year is the last separation
prior to a claimant's filing an initial claim that creates a new benefit
year, then that work separation may result in a disqualification in the
new benefit year in accordance with the provisions of the Act,
(iii) A disqualification resulting from a work separation in a benefit year
shall continue during the extended benefit period until:
(I) the extended benefit period is terminated;
(II) the claimant qualifies to file a new initial claim; or
(III) the claimant requalifies in accordance with the provisions of
the Act, Chapter 207, under which the disqualification was
(7) A claimant shall be eligible to receive benefits with respect to any week only if the individual demonstrates the availability for work required by the Act,