Section 204.009(b) of the Texas Unemployment Compensation Act (TUCA) states that if a labor agent does not pay the tax in accordance with this subtitle, a person who contracts with the labor agent for the services of a farm and ranch laborer is jointly and severally liable with the labor agent for the payment of the tax under this subtitle as an employer.

A computer-generated report is received the first week of each month listing accounts with a Standard Industrial Code (SIC) of 0761 (agricultural services). This report includes the employer's name and address, the status of the account, and the total amount owed.

Each account listed on the report is reviewed and classified into one of the following categories, which we will note on the report during the review:

• SOL = Delinquency lost to the statute of limitations
• Tax = Tax amount owed is less than current monetary criteria for labor agent action
• BKT = Employer is bankrupt
• No Records = A field investigation revealed that the labor agent does not have records to indicate with whom he contracted to do the work
• Check Mark = Possible candidate for collection action against the person(s) contracting with the labor agent

Compare the current report with the previous month's report. Transferring the above-listed classifications from the previous month's report to the current report is usually all that is needed. An account appearing on the current report that was not on the previous month's report and an account with a sizable increase in the delinquency requires a field investigation. Once every three to four months, all accounts not marked with SOL should be thoroughly reviewed to insure that their classification has not changed.

Review the account using the Tax system to establish the classification listed above. By using the cash journal, detail delinquency, delinquency summary, delinquency and field tax comments, and fiduciary record screens and any other pertinent screen, the classification is determined and noted to the right of the account on the report.

If the account is considered a candidate for collection action against the person(s) contracting with the labor agent, the Status folder is requested for further review.

• If a previous assignment requesting the field examiner investigate the labor agent is in the folder, determine if there is a need for a new field investigation (i.e., recent indebtedness, bankruptcy proceedings concluded, etc.).
• If a field investigation is needed, send a memo to the field accounts examiner assigned to the account per account examiner information screen and establish a 60-day trace via tax folder accounting and tracing system screen.

If the field examiner is successful in obtaining information on whom the labor agent contracted with during the period of indebtedness, a customized default notice is mailed to the contractor. Allow 30 days for a response. If no response is received, follow up with another customized default notice. Often at this point there is dialogue between TWC and the contractor or their attorney.

If collection is not made or the liability of the contractor is not otherwise resolved, assessment action should be commenced against the contractor and against the labor agent (if not already done so).