KB Reference Desk: Subs and Unemployment

Q:      We have an individual on our substitute list who has not been given an assignment in about a month. This person has filed a claim with the Texas Workforce Commission for unemployment. Will they be able to receive benefits as a substitute currently on our approved sub list? If so, how can we combat this in the future?

A:      Possibly. The Texas Workforce Commission (TWC) views substitutes not currently working an assignment as “laid off,” which may make them eligible for benefits.

The Texas Unemployment Compensation Act provides that, under certain circumstances, weekly payments may be made to unemployed individuals from an unemployment compensation fund (contributed to by employers subject to unemployment taxes) or through reimbursement. Generally, a person is ineligible for benefits if he or she left the job voluntarily (there are some exceptions to this) or is discharged for misconduct. This creates benefit eligibility for those who are “laid off” or who lose their job due to business interests and through no fault of their own. TWC defines “laid off” as unemployment “due to lack of work, not work performance.” Historically, substitutes were not considered “unemployed.” However, the law on this issue has changed. In 1993, the Legislature adopted a new definition of the term “unemployment” that focused more on wages, rather than the employer-employee relationship. See Tex. Lab. Code §201.091. Therefore, substitutes (who have earned wages from your district in the past) currently without an assignment are considered “laid off” by TWC for purposes of unemployment. While a substitute may be technically eligible for benefits, however, this does not necessarily mean that your district will be charged.

When a substitute files his or her initial claim, TWC will look at the wages the employee has earned in the preceding five quarters completed before they filed. TWC will discard the most recent quarter of wages, leaving four quarters of wages to calculate a person’s entitlement to unemployment benefits. This means that the longer a substitute has been employed by the district and on assignments, the more the district may be on the hook to pay. If the sub is brand new, there may be little to no wages to report and pay for – even though the employee is eligible. If the sub has been working multiple assignments in the last 5 quarters (excluding the most recent), then those wages will be used to pay the claim.

Board policy CFR (LEGAL) and (LOCAL) address “Letters of Reasonable Assurance.” These form letters can be used to guard against substitutes filing unemployment claims during periods of time that the district is not doing business (e.g., spring break, summer break, winter break, Thanksgiving). Since TWC considers substitutes without an assignment “laid off” (and thus eligible for unemployment), it is crucial to document the district’s intention to employ the substitute in the near future after business resumes. A substitute will not be able to use wages from a district to calculate benefits if the substitute has reasonable assurance to return to work when the break is over – the letter of assurance is evidence that the sub will return to normal employment.