Section 201.011 defines an employing unit as "a person who, after January 1, 1936, has employed an individual to perform services for the person in this state." Black's Law Dictionary defines a person as "in general, a human being (i.e. natural person), though by statute term may include labor organizations, partnerships, associations, corporations, legal representatives, trustees, trustees in bankruptcy, or receivers."

This section discusses the general aspects that apply to all types of employing units with respect to the law.

Most sections of the Texas Unemployment Compensation Act pertaining to the Tax function use the term "employing unit", and an understanding of the law begins with an understanding of this term. Employing unit refers to an individual or any type of organization which has or which has had one or more persons performing service for him or it.

Exception: A Texas Court has held that a fraternal beneficiary society is not subject to the taxing provisions of the Act because it is not listed as an employing unit in the Act. (Praetorians, 143 Tex 565.)

The term "employing unit" may be used with respect to any individual, business, or organization, whether or not it is subject to the liability provisions of the Act; whereas the term "employer" (as used in the Act) refers to an employing unit which is liable under Subchapter C of the Act. In correspondence it is preferable not to use either term in referring to a specific entity, but to use the actual name, such as John J. Jones, XYZ Corporation, or the partnership of Jane Jones and Henry Smith.

Any type of organization which has had in its employ one or more individuals performing service in this state since January 1, 1936, is an employing unit. The service for which a person is employed need not necessarily constitute employment as this term is defined in the law. Once an organization becomes an employing unit, it continues to have that designation until it ceases to exist, such as death of the individual, dissolution of a partnership or a corporation, or discharge of a legal representative.

An employing unit may have one or more establishments, businesses, stores, or enterprises in more than one location. If the establishments are owned and operated by the same employing unit, it must follow that all the individuals performing service in all of the establishments are employed by a single employing unit.

Exception: See Tax Supplement 88-74, in which a Commission Decision held that an individual who operated a motel as an individual proprietor and the same individual who operated an apartment project as an agent of the Federal Housing Administration constituted two separate employing units.

The status of an individual engaged in the work of assisting another in the performance of services cannot be determined until the status of the person receiving the assistance has been determined. The assisting individual will be in the "employ" of an employing unit only when the person receiving the assistance is in the "employ" of the employing unit. The person receiving the assistance must in effect be an employee of the employing unit even though the Act uses the phrase "any agent or employee." The definition of employment requires that the employee be subject to control in the performance of his duties in order to be in "employment." This is also the test of agency. It should be emphasized that control is the test of whether or not the person receiving the assistance meets the conditions required here and the mere naming of such person as an agent is of no importance.

Constructive knowledge is that knowledge which the law will infer or imply the employing unit actually to have when there are facts to indicate very strongly that the employing unit should have had knowledge.

Example: Company X employs B to haul heavy merchandise in a company truck. Company X furnishes other employees to help load the merchandise at its store but does not send anyone on the truck with B to help in the unloading. It would be implied or inferred that Company X should know that B must engage or employ someone to help him unload the truck at the end of the haul. In this situation, individuals engaged by B to assist him in unloading the truck would be employed by Company X, if B were employed by Company X.