Whenever a Texas employer receives a Notice of Application for Unemployment Benefits, the first question that runs through the employer’s head is “How much is this going to cost me?” The answer to that question can influence whether the employer decides to protest the unemployment decision, how much time, effort and worry to invest in the protest and whether to hire a lawyer to protest the unemployment award. The cost estimate has been a difficult question for employment lawyers to answer. But now the TWC has provided all of us a calculator that will estimate how a particular employer’s tax rate will change if the former employee collects the maximum unemployment benefits.
When you receive the initial notice, go to this site and input your former employee’s salary for four of the last 6 quarters and the tax rate information off of your annual Tax Rate Notice from the TWC to get a tax rate estimate. With that estimated tax rate, you can compare it to your previous TWC reports and see the change that will occur in the Texas unemployment taxes that you will pay based on that one employee receiving unemployment benefits. Remember as you make that comparison that your tax rate increase will be effective for three years, not just one, after an employee files a successful unemployment claim.