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Signed Into Law
Signed June 20, 2025Effective 2025-06-20
HB2788

Regular Session

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

Government Affairs & Regulatory Compliance Analysis

HB2788: Government Affairs Overview

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.

Rep. Angie Button·House Bill·Regular Session

Low
Low Cost
Effective:2025-06-20
Business Impact

Who HB2788 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: low

Standard regulatory changes (effective 2025-06-20). Review during normal business planning.

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Manufacturing & Business

Affected business types:

  • Manufacturers
  • Industrial facilities
  • Supply chain companies
  • Logistics providers
View all manufacturing & business legislation

Key Operational Considerations

  • 1Outside Counsel: Update engagement letters for UI litigation. Explicitly exclude Public Information Act requests for TWC fraud protocols from authorized billable activities.
  • 2Legal & 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.

Estimated Cost Impact

lowMinimal cost impact anticipated.

Enforcing Agencies

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HB2788
Relating to the disclosure of certain fraud detection information obtained in the administration of the unemployment compensation system.
Low Urgency
Passed with Opposition
House Vote141 - 6
YEA
96% in favor147 voting
Senate Vote31 - 0
YEA
100% in favor31 voting
6
Total Opposition Votes
Cost Impact
Low
Effective
2025-06-20
Enforcing Agencies
Office of the Attorney GeneralTexas Workforce Commission
Primary Author: Rep. Angie Button
89th Texas Legislature
jdkey.com
01

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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JD Key Consulting specializes in Texas regulatory compliance strategy. Work directly with James Dickey—former Chairman of the Republican Party of Texas—to understand this bill's impact on your operations and develop an actionable compliance plan.

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

02

Legislative Timeline

This bill's path through the Texas Legislature

Filed
Feb 13, 2025
Passed House
May 6, 2025
Passed Senate
May 20, 2025
Signed
Jun 20, 2025
Effective
Jun 20, 2025
TopicsLaborLabor--unemploymentFraudWorkforce Commission, Texas
03

House Authors

Rep. Angie ButtonRepublican · Primary Author
Joint Authors

Senate Sponsor

Sen. Nathan JohnsonDemocrat · Primary Sponsor

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

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More from Rep. Angie Button

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Related by Topic

View more Labor legislation
Quick Reference

Frequently Asked Questions

Common questions about HB2788

Q

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.

Q

Who authored HB2788?

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

Q

When was HB2788 signed into law?

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

Q

Which agencies enforce HB2788?

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

Q

How significant are the changes in HB2788?

The regulatory priority for HB2788 is rated as "low". Businesses and organizations should review the legislation to understand potential impacts.

Q

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.

Q

What topics does HB2788 address?

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

Q

What are the key dates for HB2788?

Key dates for HB2788: Effective date is 2025-06-20. Consult with legal counsel regarding applicability.

Q

Which Texas businesses are affected by HB2788?

HB2788 primarily affects employers and workforce development organizations. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026