Comal County business leaders and Texas Workforce Commission representatives say they are taking extra steps to help the area’s unemployed as those receiving unemployment benefits reaches a record high statewide and is double 2008 numbers in Comal County.
Unemployment in Comal County stands at 6.7 percent, according to information released Nov. 20 by the Texas Workforce Commission’s Labor Market and Career Information Bureau.
Although the county’s unadjusted rate is lower than the state rate of 8.1 percent and the national rate of 9.5 percent, it still indicates that a significant number of Comal County adults — about 5,316 people — report they are actively seeking work.
As a result of joblessness, unemployment claims and payments have more than doubled in the past year, said Ann S. Hatchitt, director of communications for the Texas Workforce Commission. Statewide the number of claimants — about 558,000 — and the amount of payments is a record.
“We’ve never paid this many benefits before,” Hatchitt said.
According to the Texas Workforce Commission, 845 Comal County residents received $963,884 in regular employer-paid unemployment benefits in October 2009, compared to 434 people who received $472,854 in October 2008.
In addition, 630 county residents received $592,709 in extended benefits paid by the federal government in October 2009. (By this time in 2008, 151 people had received $140,911 in federal funds for unemployment.)
Some unemployed are eligible for extensions after receiving the full 26 weeks of regular benefits if they have not yet found work in spite of attempts to do so. The government is now offering a total of 79 weeks of state and federal benefits to Texans who qualify.
(In the interest of full disclosure, the author of this article is currently receiving state unemployment benefits.)
Only about 30 percent of people seeking work even file for benefits, Hatchitt said. Of those who do file, about 75 percent are ruled eligible, she said.
To be eligible for unemployment benefits, the law requires that applicants lose jobs or wages due to “no fault of their own.” They also must have earned a certain amount of income in Texas during the previous five quarters, or 15 months, and must be able to look for work.
“However, we encourage anyone who thinks they might qualify to go ahead and apply,” said Hatchitt. “We have professionals on staff who know the law very well and can determine if someone does indeed qualify.”
The state law has some gray areas, she said. In some instances, people have received benefits after voluntarily leaving a job because they weren’t receiving payment or because their health or wellbeing was at stake if they continued to work, Hatchitt said.
Others have received benefits even after being fired when the Texas Workforce Commission agreed with the claimant that the firing was without cause.
Eligibility determinations are first made by Texas Workforce Commission representatives, who speak separately with the employee and an employer representative. If either party disputes the eligibility determination, appeals can be made. If disagreements exist after the appeals, the case can be heard before three commissioners appointed by the governor. And about 1 percent that are not resolved by the Commission end up in the courts, said Hatchitt.
Layoffs costly to employers
For employers, layoffs can be costly. While some of the money for benefits comes from loans or federal sources, such as is occurring now due to the high number of claimants, the majority of funds comes from a trust fund derived from taxes on employers.
When employers terminate employees who successfully file for and collect benefits, their taxes increase.
“Their rates depend on their history of laying people off, because if a person consistently hires a bunch of people and lays them off, hires people
and then lays them off, then that company is responsible for more money going out of our fund,” said Hatchitt.
She explained that about three-quarters of Texas’ 440,000 employers pay the minimum rates to cover the cost of unemployment benefits, which amounts to about $23 per employee for the year.
The maximum tax rate equals about $500 per employee. Hatchitt declined to divulge the names of employers paying the highest rates.
“It’s a stiff penalty, but it is an incentive to employers to manage their work force without layoffs,” Hatchitt said.
Texas employers have enjoyed “historically low” rates during the past two years. But employers have been notified that the state’s high unemployment rates will require increased tax rates, expected to be announced the first week of December. The recent decision to borrow money and Gov. Rick Perry’s choice to decline more than $500 million in federal stimulus funds are other factors leading to future tax increases, Hatchitt said.
Employers who want to discuss the potential tax effects of planned layoffs and determine whether severance packages would be more cost effective should contact the Workforce Commission, Hatchitt said.
Hiring during a recession
Despite the recession, Comal County and New Braunfels have not had layoffs this year.
“We haven’t laid anyone off in 10 years and we are not in a hiring freeze,” said Bob Grazioli, director of Human Resources for Comal County. “But as part of the planning for next year, we are not budgeting for any additional manpower” except for law enforcement or other emergency services personnel who might be funded through grants or other means.
The City of New Braunfels is not anticipating layoffs either, said Julie O’Connell, director of Human Resources, but the municipal government is reviewing vacated positions to determine whether the position should be filled or eliminated.
O’Connell said she has seen signs of increased joblessness, including a flood of applications for open positions.
“We just recruited for an entry-level receptionist, and we had 225 applications,” she said.
Michael Meek, president of the Greater New Braunfels Chamber of Commerce remains upbeat about job opportunities in the area.
“The Austin-to-San Antonio corridor remains one of the strongest job markets in the state,” Meek said.
He said the chamber and local economic development agencies are working to attract more jobs to the area. He pointed to the 2009 groundbreaking of the new Caterpillar engine plant in Seguin as a recent success. The hiring of about 14,000 is expected to begin in 2011.
O’Connell said the City of New Braunfels is also working to help area residents.
“We’re doing several things,” she said. “We are exercising responsible fiscal and hiring policies so that we don’t have to lay people off, and we are finding ways to help those in the area who are unemployed through such events as a recent education fair and programs at the public library to help improve job-searching skills.”
For its part, the Texas Workforce Commission has sought out money from federal programs to help seniors, veterans, the chronically unemployed, and those who need child care, Hatchitt said. It has also hired about 500 more people to work at its five call centers statewide to assist employers and claimants.
“We do have the resources to help people,” said Hatchitt, “and we are ramping up to do that.”
