Texas Unemployment Compensation laws & HR compliance analysis

Texas Unemployment Compensation: What you need to know

Virtually all employers are covered by the Texas Unemployment Compensation Act (TX Labor Code Sec. 201.001 et seq.) and are therefore subject to the state unemployment insurance tax, including, for example, those that:
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• Are paid $1,500 or more in wages during any calendar quarter in the current or preceding calendar year or employed at least one person on some portion of a day during 20 or more different calendar weeks in the current or preceding calendar year;
• Are subject to the Federal Unemployment Tax Act (FUTA) and had any employee in Texas or are required by federal law to be covered by a state;
• Bought the trade or business of a covered employer;
• Are farm or ranch employers and, in the current or preceding calendar year, either paid cash wages of $6,250 in any quarter or employed three or more workers for some portion of a day during 20 or more different calendar weeks in the current or preceding calendar year;
• Are employers of domestic servants and paid wages of $1,000 or more during any calendar quarter;
• Are nonprofit, tax-exempt organizations that employed four or more people on each of 20 days during the current or preceding calendar year; or
• Elect to become a covered employer (TX Labor Code Sec. 201.021et seq.).
The law excludes certain services from coverage, including, for example, services provided by:
• Students working for schools, colleges, or universities;
• Students working for work-study programs;
• Real estate and insurance salespersons;
• Student nurses;
• Hospital interns; and
• Newspaper distributors that are minors (TX Labor Code Sec. 201.065 et seq.).
Taxable wage base. For the current taxable wage base, visit http://www.twc.state.tx.us/ui/tax/your-tax-rates.html

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