The Attorney General of Texas
November 30, 1981
MARK WHITE
Attorney General
Supreme Court Suildlng
Honorable Ernie W. Tullis Opinion No. Mw-397
P. 0. Box 12546 Administrator
Austin, TX. 76711 Texas Employment Commission Re: Definition of "benefit
512/475-2501 T.E.C. Building wage credits" in the Texas
Telex 9101674.1367
Austin, Texas 78778 Unemployment Compensation Act
Telecopier 5121475.0266
and related questions
Dear Mr. Tullis:
1607 Main St., Suite 1400
Dallas, TX. 75201 YOU inform us that the TeXS.9 Employment Commission has
2141742-8944 interpreted article 5221b-l(e), V.T.C.S., of the Texas Unemployment
Compensation Act, to prohibit it from considering an individual's
4624 Alberta Ave., Suite 160 wages in excess of the maximum amount of wages as defined in the
El Paso, TX. 79905 Federal Insurance Contributions Act when it determines his right to
9151533.3464 unemployment benefits. You first ask whether the commission may
change its interpretation of this provision to permit consideration of
1220 Dallas Ave., Suite 202
the actual wages paid an individual. You also wish to know the amount
Houston. TX. 77002 of wages to be used in applying article 5221b-l(e) when the maximum
7 13/650-0666 amount of wages defined in the Federal Insurance Contribution Act
changes between the time the wages are earned and the time a claim for
benefits is filed.
606 Broadway, Suite 312
Lubbock, TX. 79401
6061747-522-9 Article 5221b-l(e), V.T.C.S., provides in part:
Benefit Wage Credits: 'Benefit wage credits'
4309 N. Tenth, Suite B
means those wages as defined in this subsection of
McAllen, TX. 79501
5121662-4547
the Act, which are used in determining an
individual's right to benefits.... [Flor the
purposes of this Section..., wages received by an
200 Main Plaza, Suite.400 individual in any calendar year shall include all
San Antonio, TX. 79205
remuneration from each employer for employment up
512/2254191
to the maximum amount of wages as defined in the
Federal Insurance Contributions Act ...a*
An Equal Opportunity/ amended....
Affirmative Action Employer
At the present time, the maximum amount of wages as defined by the
Federal Insurance Contributions Act [hereinafter F.I.C.A.] is $29,700.
42 U.S.C.4430. In answer to your first question, the statute clearly
sets out the maximum amount of wages that may be considered in
determining an individual's benefits. The commission may not consider
actual wages in excess of this maximum. See Teacher Retirement System
v. Duckworth, 260 S.W.2d 632 (Tex. Civ. AK - Fort Worth 1953), aff'd
p. 1348
Mr. Ernie W. Tullis - Page 2 (Mw-397)
per curiam, 264 S.W.2d 98 (Tex. 1954) (courts will not accept agency
interpretation contrary to clear meaning of unambiguous statute).
An unemployed individual may receive benefits with respect to any
benefit period only if he meets certain requirements as to income
distribution within his "base period," defined as "such period of four
(4) consecutive completed calendar quarters within the last five (5)
completed calendar quarters immediately preceding the first day of an
individual's benefit year as the Commission may by regulation
prescribe." V.T.C.S. art. 5221b-17(a)(2). The applicant may receive
benefits only if he has received total benefit wage credits in his
base period of not less than one and one-half times his high quarter
benefit wage credits, or if he has received wages within at least one
quarter equal to two-thirds of the F.I.C.A. maximum wages. V.T.C.S.
art. 5221b-2(e).
Under these definitions, some claimants are denied benefits
solely because they receive wages in previous quarters totaling the
F.I.C.A. maximum. Their compensation for the balance of that year is
not considered "wages" for the purpose of determining unemployment
benefits.
This problem derives in part from the commission's interpretation
of the provisions an employee must meet to qualify for unemployment
compensation. Although under article 5221b-17(a)(2) the commission
may define the "base period" as = four consecutive calendar quarters
within the last five quarters immediately preceding an individual's
benefit year, the commission has by Rule 1 restricted claimants to the
first four. See T.E.C. Rule 1 (1976).
You cite, for example, a case involving a January 15, 1979.
claim. According to Rule 1, the claimant's base period consisted of
the fourth quarter of 1977 and the first three quarters of 1978. His
reported wages were $1620.89 for the second quarter of 1978 and
$5376.99 for the third quarter of 1978. These reported payments did
not meet the "one and one-half times" requirement of article
5221b-2(e), although testimony at the hearing showed that the claimant
received actual wages of $5850.92 in the fourth quarter of 1977. If
these were allowed to be considered as benefit wage credits, the
claimant would have met the "one and one-half times" requirement and
would have qualified for unemployment compensation. However, earlier
in 1977 claimant had received from the same employer, who paid him the
$5850.92, wages in excess of $16,500, the then F.I.C.A. maximum wage.
Since both payments were in the same calendar year although not in the
same base period, the $5850.92 payment in the fourth quarter of 1977
was not considered by the commission ag "wages." Claimant did not
qualify under the alternative provided in article 5221b-2(e) for
persons receiving within at least one quarter of the base period wages
equal to two-thirds of the F.I.C.A. maximum.
If the commission had used the last four consecutive calendar
quarters within the last five calendar quarters immediately preceding
p. 1349
Mr. Ernie W. Tullis - Page 3 (MW-397)
the claimant's benefit year in determining the base period, instead of
the first four now specified by Rule 1, the claimant's position might
have been changed, depending on his wages in the last quarter of 1978.
We find nothing in the statutes to prevent the commission from
specifying by regulation that the base period will consist of the four
consecutive quarters of the five that will yield the greatest amount
in benefit wage credits in regard to each claim. Further, it is
expressly within the authority of the commission to prescribe
"equivalents" for "calendar" quarters that might more equitably
distribute benefit wage credits within the base period by the simple
expedient of considering equivalent quarters ending on days other than
the last days of the calendar quarters. _See V.T.C.S. art.
5221b-17(a)(3).
Another situation with which you are concerned involves an
initial claim filed in the second quarter of a year in which the
F.I.C.A. maximum had been increased. The base period involved
consists of the four calendar quarters of the preceding year. The
claimant did not meet the "one and one-half times" requirement of
article 5221b-2(e) because he earned the large majority of his
qualifying wages in the first quarter of that year. In applying the
alternative qualifying provision of article 5221b-2(e), the commission
used the F.I.C.A. maximum wage in effect for the year in which the
claim was filed instead of that in effect in the year in which
claimant's high quarter fell. The difference in the maximum wages
used in such cases can determine whether or not a claimant qualifies
for unemployment benefits.
In answer to your second question, we believe that the commission
in determining the eligibility of a claimant should use the maximum
wage in effect when claimant earned and received his qualifying wage.
This would not be contrary to any express provision in the Texas
Unemployment Compensation Act and would seem to be within the
commission's administrative powers.
Our conclusion that the commission should apply the law in effect
when the employee's wages were earned even though the federally
defined maximum wage has increased by the time the commission
determines his eligibility for benefits, derives from the rule of law
forbidding a retroactive construction of statutes so as to deprive a
party of a substantial right. See 12 Tex. Jur. 2d Constitutional Law
55121, 122. The commission's application of the law in effect at the
time of the hearing often injures the employee because of increases in
the F.I.C.A. maximum wage prior to the hearing. We believe the
commission has power to construe the eligibility statute so that it
will operate fairly and justly to all claimants for benefits under the
Texas Unemployment Compensation Act.
SUMMARY
Article 5221b-l(e), V.T.C.S., of the Texas
Unemployment Compensation Act does not consider
p. 1350
Mr. Ernie W. Tullis - Page 4 (MN-397)
actual wages paid an individual in excess of the
maximum wages defined in the Federal Insurance
Contributions Act as a determining factor for
unemployment benefits. Otherwise, the act itself
authorizes the commission to prescribe rules for
the equitable determination of benefit wage
credits for each claimant. The maximum wages to
be considered for unemployment benefits are the
wages received by the employee not in excess of
the maximum wages defined in the Federal Insurance
Contributions Act at the time they were earned.
MARK WHITE
Attorney General of Texas
JOHN W. FAINTER, JR.
First Assistant Attorney General
RICHARD E. GRAY III
Executive Assistant Attorney General
Prepared by Bob Lattimore
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Susan L. Garrison, Chairman
Jon Bible
Rick Gilpin
Bob Lattimore
Jim Moellinger
p. 1351