Q: How will a reduction in force affect unemployment benefits?
A: Unemployment benefits provide temporary income for employees who lose their job through no fault of their own. A reduction in force (RIF) would qualify an employee to file for unemployment benefits. For the employee, the amount of the benefit is based on his or her prior earnings and length of employment. The current maximum weekly benefit that a claimant can draw is $415 per week for 26 weeks, up to a maximum of $10,790 under regular unemployment benefit laws in Texas.
For private employers, the cost of this benefit is charged as a tax on quarterly wages based on prior claims history. In lieu of paying taxes, school districts, as political subdivisions, may elect to pay the state unemployment fund as a reimbursing employer. Reimbursing employers simply pay the fund an amount equal to the benefits paid to former employees.
Most districts choose to be reimbursing employers. Reimbursing employers are required to report employee wages and are billed quarterly by the state fund. Following a RIF, districts will see an increase in unemployment compensation costs when their former employees draw unemployment benefits.
(Editor's note: The final two paragraphs of the above text were corrected to reflect the differences between districts and private employers. 12/20/2010)
