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Unemployment compensation — Texas

The Texas Unemployment Compensation Law (the Act) was enacted to encourage employers to provide more stable employment and to accumulate funds systematically to provide benefits for those individuals who are unemployed through no fault of their own. Unemployment claims and taxes are administered by the Texas Workforce Commission. Unemployed individuals who meet specified requirements are eligible to receive benefits under the Act. The amount of benefits for which an unemployed individual is eligible varies, depending upon the employee’s regular wages prior to being unemployed. Benefits are paid out of an Unemployment Compensation Trust Fund, which is funded by contributions from covered employers. Whenever an individual receives benefits, the former employer’s account may potentially be debited.

The Act provides procedures for determining whether individuals are eligible for benefits. Employers are permitted to participate in these proceedings. Because an employer’s rate of contribution to the Trust Fund may increase when a former employee receives benefits, it is to the employer’s advantage to contest claims whenever a former employee should not receive benefits. However, an employer should seriously consider whether contesting procedures will, in the end, better serve the interests of the former employee instead, as information gathered during the...

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