HB2788

Regular Session

Relating to the disclosure of certain fraud detection information obtained in the administration of the unemployment compensation system.

LowStandard timeline

Low Cost

Effective:2025-06-20

Enforcing Agencies

Texas Workforce Commission • Office of the Attorney General

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

Effective Date: June 20, 2025 (Immediate effect due to supermajority vote).
Compliance Deadline: Immediate. Your legal strategy regarding TWC disputes must shift today.
Agency Rulemaking: No formal rulemaking is mandated by the statute. However, the Office of the Attorney General will likely issue opinions over the next 12-18 months defining the scope of "mental impressions" and "communications" protected under this exemption.

Immediate Action Plan

Stop Pending Requests: Immediately withdraw or write off pending PIA requests regarding TWC fraud detection; they will be denied under the new statute.
Notify Vendors: Send a memo to your UI claims administrator confirming they are aware of HB2788 and have adjusted their dispute strategies accordingly.
Audit HR Files: Conduct a spot-check of recent termination records to ensure they can stand alone in a hearing without reliance on TWC procedural transparency.

Operational Changes Required

Contracts

Third-Party Administrators (TPAs) & PEOs: Review service agreements with vendors managing your unemployment claims (e.g., Equifax, ADP). If their scope of work includes "auditing TWC compliance" via public records requests, these provisions are now obsolete. Ensure they are not billing you for futile data requests.
Outside Counsel: Update engagement letters for UI litigation. Explicitly exclude Public Information Act requests for TWC fraud protocols from authorized billable activities.

Hiring/Training

Legal & Compliance Teams: Issue a directive to stop filing Public Information Act requests for TWC internal risk assessments, cross-match protocols, or fraud manuals. These will be summarily denied.
HR Management: Train HR staff that TWC internal logic is now a "black box." They can no longer rely on finding TWC procedural errors to win disputes; the defense must rest entirely on the quality of your internal separation documentation.

Reporting & Record-Keeping

No New Filings: This law imposes no new reporting requirements on employers.
Internal Documentation: Because you cannot access TWC investigative files to prove agency error, your internal records regarding "separation for cause" must be impeccable. These are now your sole line of defense in tax rate disputes.

Fees & Costs

No New Fees: There are no statutory fee increases.
Cost Savings: You should see a reduction in legal spend regarding discovery and open records requests in administrative disputes.

Strategic Ambiguities & Considerations

The "Mental Impressions" Loophole:

Section 301.087(a) broadly defines protected information to include "mental impressions" and "communications" regarding fraud detection.

The Risk: The TWC may utilize this definition to shield agency incompetence. If a caseworker makes an error in a fraud determination, the agency may argue the caseworker's notes constitute "mental impressions" and withhold them from you.
Watch For: Attorney General rulings that test the limits of this definition. Until clarified, assume the TWC will take a maximalist approach to withholding documents.

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Legislative Timeline

This bill's path through the Texas Legislature

TopicsLabor Labor--unemployment Fraud Workforce Commission, Texas

Official Analysis

View HRO Analysis View All Bill Documents

BILL ANALYSIS

C.S.H.B. 2788

By: Button

Trade, Workforce & Economic Development

Committee Report (Substituted)

BACKGROUND AND PURPOSE

Currently, an individual can request details on fraud prevention-related contracts, data, and protocols of the Unemployment Benefits Program of the Texas Workforce Commission (TWC) through a public information request. TWC is obligated to provide the information under state public information law, which, the author has informed the committee, may then be used as a blueprint to circumvent the TWC's fraud detection and prevention methods. C.S.H.B. 2788 seeks to ensure the integrity of the Unemployment Benefits Program by providing an exception to state public information law requirements for TWC's fraud detection information.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

C.S.H.B. 2788 amends the Labor Code to establish that fraud detection information is not public information for purposes of state public information law and is excepted from the public availability requirement of that law. The bill defines "fraud detection information" as any information, including risk assessments, reports, data, protocols, technology specifications, manuals, instructions, investigative materials, crossmatches, mental impressions, and communications, that may reveal the methods or means by which the Texas Workforce Commission (TWC) prevents, investigates, or evaluates fraud in its administration of the Texas Unemployment Compensation Act.

EFFECTIVE DATE

On passage, or, if the bill does not receive the necessary vote, September 1, 2025.

COMPARISON OF INTRODUCED AND SUBSTITUTE

While C.S.H.B. 2788 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.

The introduced defines "fraud detection information" as any information that may reveal the methods or means by which TWC prevents, detects, investigates, or evaluates fraud in the administration of unemployment compensation benefits and the unemployment compensation tax programs, whereas the substitute defines the term as any information that may reveal the methods or means by which TWC prevents, investigates, or evaluates fraud in its administration of the Texas Unemployment Compensation Act. Additionally, the substitute includes an explicit exceptionfrom the public availability requirement of state public information law for fraud detection information, which did not appear in the introduced.

House Authors

Rep. Angie ButtonRepublican · Primary Author

Joint Authors

Senate Sponsor

Sen. Nathan JohnsonDemocrat · Primary Sponsor

Bill Text(with markup)

H.B. No. 2788

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

	AN ACT
	relating to the disclosure of certain fraud detection information
	obtained in the administration of the unemployment compensation
	system.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Subchapter F, Chapter 301, Labor Code, is
	amended by adding Section 301.087 to read as follows:
	Sec. 301.087. CERTAIN FRAUD DETECTION INFORMATION NOT
	PUBLIC INFORMATION. (a) In this section, "fraud detection
	information" means any information, including risk assessments,
	reports, data, protocols, technology specifications, manuals,
	instructions, investigative materials, crossmatches, mental
	impressions, and communications, that may reveal the methods or
	means by which the commission prevents, investigates, or evaluates
	fraud in its administration of Subtitle A.
	(b) Fraud detection information is not public information
	for purposes of Chapter 552, Government Code, and is excepted from
	the requirements of Section 552.021 of that code.
	SECTION 2. This Act takes effect immediately if it receives
	a vote of two-thirds of all the members elected to each house, as
	provided by Section 39, Article III, Texas Constitution. If this
	Act does not receive the vote necessary for immediate effect, this
	Act takes effect September 1, 2025.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


March 25, 2025

TO:	Honorable Angie Chen Button, Chair, House Committee on Trade, Workforce & Economic Development

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	HB2788 by Button (Relating to fraud detection information and the public information law.), As Introduced

No significant fiscal implication to the State is anticipated.

It is assumed that any costs associated with the bill could be absorbed using existing resources.

Local Government Impact

No significant fiscal implication to units of local government is anticipated.

Source Agencies:

302 Office of the Attorney General, 320 Texas Workforce Commission

LBB Staff:

JMc, RStu, GDZ, JBel

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Frequently Asked Questions

Common questions about HB2788

What does Texas HB2788 do?

HB2788 is effective immediately, granting the Texas Workforce Commission (TWC) statutory authority to withhold "fraud detection information" from Public Information Act requests. This law prevents employers and legal counsel from accessing TWC internal risk protocols and fraud manuals during unemployment insurance disputes, forcing a reliance on internal employment records rather than agency procedural audits. Implementation Timeline Effective Date: June 20, 2025 (Immediate effect due to supermajority vote).

Who authored HB2788?

HB2788 was authored by Texas Representative Angie Button during the Regular Session.

When was HB2788 signed into law?

HB2788 was signed into law by Governor Greg Abbott on June 20, 2025.

Which agencies enforce HB2788?

HB2788 is enforced by Texas Workforce Commission and Office of the Attorney General.

How urgent is compliance with HB2788?

The compliance urgency for HB2788 is rated as "low". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of HB2788?

The cost impact of HB2788 is estimated as "low". This may vary based on industry and implementation requirements.

What topics does HB2788 address?

HB2788 addresses topics including labor, labor--unemployment, fraud and workforce commission, texas.

Legislative data provided by LegiScanLast updated: November 25, 2025

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