Substitute Employees and Unemployment Claims

Editor’s note: The original article posted on February 17, 2017, has been updated to include COVID-19 related information. HR Services is a division of the Texas Association of School Boards and is unable to assist with individual claims. Questions about benefit eligibility or assistance with individual claims should be directed to the appropriate state office (e.g., Texas Workforce Commission).​

Texas school districts may see an increase in unemployment claims from substitute employees as a result of closings in response to COVID-19. The questions and answers below provide general information about Texas unemployment claims.

COVID-19 Related Questions

Q: Will substitutes and others who don’t receive pay during a closure be eligible to file for unemployment compensation?

A: Likely, yes. If the district is not providing pay to the employee and is not providing them an option to continue working, they may be able to file a valid unemployment compensation (UC) claim.

Q: Would a letter of reasonable assurance protect my district from unemployment compensation (UC) claims filed during the pandemic-related closure?

A: No. Letters of reasonable assurance protect districts during normal scheduled breaks, such as summer or winter vacation. An emergency closure is not “an established and customary vacation period or holiday recess,” as indicated in the Texas Labor Code. Reasonable assurance letters may be used to protect your district against current claims that extend into summer break. So, it is important to issue these letters as usual.  

Q: Will this result in an increase in unemployment costs for districts?

A: It depends. As unemployment compensation claim amounts are based on an employee’s earnings over the past 18 months and given that substitutes have irregular work schedules and many are held to working fewer than 30 hours per week, the financial burden on the district may be limited. The Texas Workforce Commission (TWC) recently waived the required ‘waiting week’ and job search requirements in light of the current disaster so seeking unemployment compensation will be easier than usual.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides full unemployment insurance relief during the COVID-19 outbreak to private employers subject to unemployment insurance tax. School districts and other Texas public entities who are reimbursing employers are not eligible for the same level of relief. However, TWC will apply a 50 percent protection for reimbursing accounts for all claims from March 13, 2020 to December 31, 2020.

Substitutes and Unemployment Claims

Q: Can substitute employees claim unemployment benefits against a school district?

A: The short answer is yes, substitute teachers and other at-will employees can and do file for unemployment benefits in between assignments. The Texas Workforce Commission (TWC) will typically award benefits to subs who file in between assignments because they are treated as being laid off since most substitutes are not fired for misconduct, nor do they voluntarily quit subbing. Hence, being laid off means they become eligible. However, that does not necessarily mean that an employer will be charged for their benefit claim, especially if the person is new to the district.

When a claimant files for benefits, it begins a process called filing an initial claim. The TWC examines the wages the person has earned in the preceding five quarters completed before filing that initial claim but discards the most recent quarter of wages. This leaves four quarters of wages to calculate the claimant’s benefits. If it is a new substitute, the employer usually has no wages leading up to that point. This means that, while the claimant is eligible, the employer has not paid them any wages in the time period in question. Only employers with wages in that time period are charged for the claim. If the person has been working for the employer during this time period, then those wages will be used to pay the claim.

Q: So, can a person work and claim unemployment benefits during the same time?

A: Yes, the person can receive both a paycheck and unemployment benefit payments in the same week. Since unemployment claims are measured by an entire week, it is possible to work one day and be off the next, file a claim, and then return to work later. The TWC uses all wages earned in a week to offset any benefits paid. For example, the wages the person earned in the past four quarters are used to calculate a Weekly Benefit Amount (WBA) when the initial claim is filed. This is what the TWC pays in unemployment benefits. However, this payment will be offset with any wages earned in a claim week doing things like subbing. A claimant may earn up to 125% of this WBA and still claim unemployment benefits, but the payment is reduced as the person earns more, up to 125%. So, if a person who is eligible for $200 per week in unemployment benefits works two days as a sub and earns $150, the person would be eligible to collect only $100 in unemployment benefits (125% of $200 = $250 - $150 earned subbing = $100 unemployment benefits).

Q: What about Letters of Reasonable Assurance?

A: Letters of Reasonable Assurance (LRA) are to protect against claimants filing unemployment claims over scheduled breaks (summer vacation, winter break, Thanksgiving, spring break, etc.). The TWC treats claimants on break as laid off since it is a temporary work stoppage (the person has not been fired or quit). However, a claimant will not be able to use wages from an educational institution to calculate benefits if the person has reasonable assurance to return to work when the break is over. The LRA is the evidence that the person is returning. So while the LRA does not protect against subs filing in between assignments during the school year, it is essential for protecting the school from claims over breaks.

A model LRA is available in the HR Library (member login required).

More information on unemployment claims can be found on the TASB Risk Management Fund Insights page.