Substitute Employees and Unemployment Claims

February 15, 2017 • James Ezell

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

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?

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?

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). But, 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 and in the TASB Risk Management Unemployment Resources, available to TASB Risk Management Fund members.

Tagged: Benefits, Unemployment