TWC postpones setting 2021 employer tax rates

AUSTIN – On Wednesday, the Texas Workforce Commission (TWC) delayed the setting of the employer’s unemployment insurance tax rates to allow for more time for ongoing legislative efforts and the continuing economic recovery to play out.

Last week, Governor Greg Abbott suspended a section of the Texas Labor Code which paved the way for the TWC decision.

“This action by the governor provides TWC with the opportunity to set a fair tax rate for all employers in response to the unique challenges we currently face,” said TWC Chairman Bryan Daniel. “Our goal is to support employers’ ability to continue rebuilding their businesses and our economy while ensuring trust fund operations.”

Abbott suspended Section 204.048 of the Texas Labor Code, which set deadlines for a small subset of employers who make voluntary contributions into the UI tax system. The commissioners in turn aligned TWC Policy with that decision.

“We want to make sure we set rates which are the most appropriate and do so with the most information available at the time,” said Commissioner Representing Labor Julian Alvarez. “This delay will allow us to make a more informed decision on those rates.”

Employer-paid UI taxes replenish the Texas Unemployment Compensation Trust Fund, which provides temporary income for Texas workers who lose their jobs through no fault of their own. TWC calculates experience-rated employers’ tax rates as of October 1 to be effective for the following calendar year, and mails notices of the rates to employers.

“This is very important for Texas employers, and it is vital that we take the proper time to get this right,” said TWC Commissioner Representing Employers Aaron Demerson. “I appreciate the leadership of Governor Abbott and his concern for Texas employers.”