Relating to initial claims under the unemployment compensation system.

Contracts

• Staffing Agency MSAs: Review Master Service Agreements immediately. Ensure indemnity clauses protect your company from UI chargebacks for temporary staff who work short assignments (less than 30 hours) and are subsequently released.
• Independent Contractor Agreements: Tighten classification language. With the removal of the 30-hour threshold, the TWC may scrutinize short-term engagements more aggressively to find an "employer" for chargeback purposes.

Hiring/Training

• HR Training: Retrain HR and UI response teams to stop using "insufficient hours" or "worked less than 30 hours" as a defense against being the named interested party. This defense is abolished for claims filed on or after 1/1/2026.
• Trial Periods: "Working interviews" or paid trial shifts now carry full UI liability. Managers must document specific performance failures during these trials to defend against subsequent claims; you can no longer rely on the short duration of the trial to exempt you.

Reporting & Record-Keeping

• Separation Codes: Payroll systems must accurately capture the specific reason for separation (e.g., misconduct, voluntary quit) for *every* employee, even those employed for a single day.
• Time Logs: Maintain precise timestamps of work. If a claimant works a partial shift for you and files the next day, you are the liable party.

Fees & Costs

• UI Tax Rate Risk: While there are no new administrative fees, your UI tax rate is at higher risk. You will face more chargebacks for short-term employees. Failure to successfully protest these claims based on separation reasons (misconduct/quit) will result in direct charges to your account.