A Complete Guide to Texas Employee Benefits During COVID-19

Gusto Editors

More than 14 million employees have built careers in the Lone Star State, from farmlands and oil derricks to the growing tech hubs in Austin. State law requires that employers provide some basic benefits, such as paid vacation and sick leave, health coverage, disability insurance, and unemployment benefits. 

While most of the country continues to operate under social distancing guidelines suggested by the Centers for Disease Control and Prevention (CDC), businesses of all sizes have been impacted by the COVID-19 pandemic. As a result, state and local agencies are being asked to step up and take care of the more than 660,000 Texans who have filed for unemployment.

Whether you’re a business owner or an employee, it’s important that you understand what employee benefits are available to Texans. Here, we’ll review existing assistance programs, how to sign up for them, and how the novel coronavirus has impacted employee benefits in Texas.

Unemployment insurance in Texas

General guideline

The Texas Workforce Commission (TWC) administers unemployment benefits, which provide temporary relief for eligible Texans who find themselves out of work or dealing with severely reduced work hours. The benefit is funded by taxes collected from businesses.

Unemployment benefits range from $69 per week to $521 per week. Estimate your weekly benefits by visiting the TWC’s Unemployment Benefits Estimator.

To apply for unemployment benefits in Texas, you must meet the following requirements:

  • Be entirely or partially unemployed
  • Have earned a minimum taxable wage while working in Texas 
  • Must not have been let go for any misconduct
  • Be physically and mentally capable of returning to work
  • Be available for full-time work
  • Must actively search for employment

You can file an unemployment claim by following these steps:

  • Create a new TWC ID and log on to the agency’s Unemployment Benefit Services page.
  • Answer an initial survey to determine whether you can continue filing online or need to call the TWC telecenter.
  • If you’re able to continue online, proceed to filing your claim by filling in all requested information.

If your application is approved by the TWC, you must request your payment every two weeks. Funds are distributed on a TWC debit card or through direct deposit. The request can be made online or by phone.

How does COVID-19 affect unemployment in Texas?

The TWC has extended its call center hours to 8 a.m. to 6 p.m. Monday through Friday and 8 a.m. to 5 p.m. on Saturday. The agency has also upgraded its telecommunications infrastructure and is seeking out additional staffing to support the demand.

During the crisis, the TWC is waiving its requirement for unemployment recipients to search for work. Furthermore, the state is waiving the one-week waiting period before applicants start receiving payments.

According to the TWC, it takes approximately 21 days for residents to receive unemployment benefits from the time they apply. Since Texas Governor Greg Abbott declared COVID-19 a disaster on March 13, 2020, the TWC can backdate a claim to March 8 if a person was unemployed and unable to file during that time. If a person needed to file a claim after March 13 and couldn’t because of increased volume at the TWC, the agency will backdate their claim to the Sunday prior to the date they lost their job.

Along with the state’s regular unemployment benefit, Texans can take advantage of the federal government’s Pandemic Emergency Unemployment Compensation (PEUC), which provides up to an additional 13 weeks of unemployment coverage and $600 more in weekly benefits. All Texans who qualify for unemployment will automatically receive the PEUC. This payment may arrive separately from the regular unemployment payment.

If a resident isn’t eligible for the PEUC or regular unemployment, they may be eligible for Pandemic Unemployment Assistance (PUA), which provides up to 39 weeks of benefits to those who traditionally do not fit the framework for unemployment, such as the self-employed and contract workers. That program starts with unemployment that began on or after January 27 and ends on or before December 31, 2020.

For employers, COVID-19 has brought on the Shared Work program, which allows them to reduce weekly work hours by at least 10% and no more than 40%, for at least 10% of employees. Employers are then able to supplement the lost wages with partial unemployment benefits. A business that was forced to shut down due to the pandemic can file a mass unemployment claim for the affected employees on their behalf.

In addition to the requirements laid out by the state, unemployment benefits in Texas must uphold the Federal Worker Adjustment and Retaining Notification (WARN) Act of 1988. This act requires employers with 100 or more employees to provide 60-day notice to all workers in the event of a layoff or furlough.

Paid time off in Texas

General guideline

According to the Texas Payday Law, employers are not required to provide paid or unpaid leave. Vacations, sick time, or any payment for unworked hours is considered a fringe benefit and not required for private-sector businesses. The state opts to let business owners make the decision to offer paid time off. Some cities have either passed or enacted ordinances requiring businesses in their towns to provide paid sick leave. Texas businesses are also not required to pay out any unused paid leave.

The federal Family and Medical Leave Act allows for up to 12 weeks of unpaid, job-protected leave. Even then, that only applies to businesses with 50 or more employees that are “stationed within 75 miles of the employee” who’s taking leave; the employee also has to meet certain eligibility requirements.

How has the coronavirus impacted paid time off in Texas?

While the state does not require businesses to provide paid sick leave, businesses with fewer than 500 employees are required to do so under the Families First Coronavirus Response Act passed by Congress in March. The act establishes tax credits that offset the costs of the paid leave for employers. It also allows for various amounts of coverage depending on an individual’s specific COVID-19-related need. Small businesses with fewer than 50 employees, however, are potentially exempt from the requirement.

Health care benefits in Texas

General guideline

Just as with paid time off, Texas does not require employers to provide group health insurance to employees, though most employers still offer the benefit. If they do, state insurance laws mandate how that coverage is offered to employees, such as who is eligible, if dependents are eligible, and when health insurance benefits must begin for newly-enrolled employees.

Alternatively, employers can opt to self-fund employee health benefits. Rather than relying on a third party to provide coverage, an employer can pay for their employees’ covered health claims

Texans can also obtain health insurance under the Affordable Care Act. The federal Tax Cuts and Jobs Act signed in 2017 eliminated the penalty for individuals who don’t purchase health insurance, known as the individual mandate. However, it didn’t end an employer’s “shared responsibility” to provide medical coverage.

Association health plan” guidelines were created to allow small businesses in participating states to negotiate health insurance coverage as a single, larger entity. This allows businesses to negotiate for lower rates and better coverage due to the large number of plan participants across the small businesses negotiating together. AHPs are an option for Texas businesses.

Have health care benefits changed in Texas due to COVID-19?

In the wake of the novel coronavirus, Texas officials say most state-regulated health plans are “waiving some or all of the cost to consumers” for necessary testing related to coronavirus.

Child care benefits in Texas

General guideline

Texas offers a child services program that helps subsidize costs for low-income families. Families with children under 13 years old are able to apply for financial assistance for child care on the Texas Child Care Solutions website.

Eligibility for the financial assistance requires the following:

  • Children must be younger than 13 years old;
  • Parents must be working, attending school, or participating in training;
  • Parents are receiving public assistance;
  • Parents are receiving or needing protective services;
  • Families are low-income.

Child care services are conducted through the state’s Workforce Solutions office, and eligibility requirements vary between service areas. In some cases, local boards may have a waiting list for subsidized services.

How have child care benefits changed in Texas due to COVID-19?

Since subsidized child care is provided by the state, the TWC has made changes to its policies to help those families in need. Dating back to March 1, children can accrue absences without losing future eligibility or reimbursements. Workforce development boards can reimburse providers for the full subsidy amount during the emergency, and they can issue supplemental payments to providers that remain open during the crisis.

Parents who lose their jobs during this time can get an extended timeline to search for new work while also receiving child care assistance. Essential workers will also receive priority service and access to a faster enrollment process for child care assistance.

The state estimates that approximately $240 million has been sent to various child care boards to help fund this initiative.

Disability insurance in Texas

General guideline

While private employees do not receive disability insurance from the state, public employees working at the state, county, and municipal level—including employees in higher education and local school districts—do through the Texas Income Protection Plan provided by the Employees Retirement System (ERS) of Texas. Short-term disability provides 66% of a participant’s monthly salary with benefits for up to five months. Recipients must either use all their sick leave or wait for a 30-day period before collecting short-term disability. Long-term disability benefits cover 60%, are payable until the participant returns to work or reaches their maximum benefit period, and are subject to a 180-day waiting period. 

Individuals can enroll for disability insurance through an outside provider, though a regular fee will come out of their paychecks each pay period. Residents may be eligible for Social Security disability coverage or Supplemental Security Income.

How has disability insurance in Texas been impacted by COVID-19? 

Since the state largely relies on federal programs for individuals with disabilities, lawmakers have not provided much guidance in terms of changes in disability insurance due to the coronavirus crisis.

Workers’ Compensation in Texas

General guideline

The Texas Department of Insurance oversees workers’ comp administration, though it does not pay benefits—insurance carriers do. Furthermore, the state itself doesn’t provide any pay or medical benefits to employees with work-related injuries. If you need benefits, your employer must have workers’ compensation insurance.

How has COVID-19 affected workers’ compensation in Texas? 

In the wake of the COVID-19 pandemic, the state Division of Workers’ Compensation (DWC) has made several operational changes to make workers’ compensation easier for residents. A recent memo announced the following changes, among other major steps for the time being:

  • DWC filings that require a payment by check no longer need one.
  • Filings and consent orders that normally require signatures can be electronically signed “without sworn statements, affidavits, or notarization.”
  • New claims reporting codes have been implemented.

Texas workers’ compensation allows for billing and reimbursement of some telemedicine and telehealth services in lieu of on-site medical care.

Retirement benefits in Texas

General guideline

There are currently no state-mandated requirements for employers in Texas to provide any sort of retirement plan to employees. Public employees are eligible through the ERS with its Texas Employees Group Benefits Program.

Business owners can provide the benefit on their own, but they must adhere to the federal Employee Retirement Income Security Act (ERISA) of 1974, which mandates that employees who work at least 1,000 hours in a year be given the option to join a pension or retirement plan.

Has COVID-19 impacted retirement benefits in Texas?

All the same laws and requirements still apply during the COVID-19 crisis.
For more information on helpful benefits and relief programs available during the coronavirus crisis, visit our COVID-19 small business relief finder or COVID-19 resource hub.

Gusto Editors Gusto Editors, contributing authors on Gusto, provide actionable tips and expert advice on HR and payroll for successful business management.
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