Under Section 201.021:

1. In this subtitle, "employer" means an employing unit that:
   
   

2. The definition provided by this section does not apply to an employing unit covered by Section 201.023 or to farm and ranch labor covered by Section 201.028.
   
   
3. An individual who performs a service in this state for an employing unit that maintains two or more separate establishments is this state is employed by a single employing unit for purposes of this subtitle.

An individual counted under this subsection must have been in "employment" as that term is defined in the Act. (See Section 201.041, of the TUCA.) If all service performed by an individual is employment, this individual is counted consistently in the same manner for each day on which he/she performs service. If part of the service performed by an individual is employment and part of his/her service is exempt, then the individual is counted in accordance with the language of Section 201.076, Included and Excluded Service in Pay Period.

In order for an individual to be omitted in counting employment for application of this definition of an employer, the employing unit must have records showing which portion of the individual's service was exempt. If this information is not shown in the records, the individual will be counted in employment on each day of service unless the employing unit otherwise claims and proves its right to the exclusion. When such a claim of exclusion is made, the burden of proof is on the employer to show the right to have the service excluded from employment.

This section discusses the aspects of the law that specifically apply to the use of the term "week".

"Week" means seven consecutive calendar days as prescribed by the Commission.

"Week" means a period of seven consecutive calendar days ending at midnight on Saturday.

The qualifying experience with individuals in employment under this subsection must be in twenty different calendar weeks. The weeks of qualifying experience need not necessarily be consecutive and thus may be scattered throughout a calendar year.

The wording of Section 201.021 defines liability in terms of one or more employees on each of twenty days within a calendar year, each day being in a different calendar week. If an employing unit has an employee on a day at the beginning of a year, that day may be counted in establishing liability even though the calendar week in which the day occurs began in the preceding calendar year.

Employment experience on any day in a calendar year is considered in determining liability under this subsection. Liability is created by having one or more employees in employment on twenty or more different days in a calendar year, each day being in a different calendar week. An individual is in employment during a day regardless of whether he performed service for all or only a part of a full working day. A "day" is the twenty-four hour period, midnight to midnight. An individual is in employment on a day if he/she has performed on that day any service included within the definition of employment. The Act provides no exclusion for service that may be described as "casual," "part-time" or "temporary" labor.

Experience required under this subsection to create "employer" status is one (1) or more individuals in employment for some portion of a day in each of twenty (20) different calendar weeks. It is not necessary that the individuals performed service during the same hours of the day, nor is it necessary that the individuals counted on different days be the same persons. An organization operating its business by use of two "shifts," with two individuals on one shift and two other individuals on the second shift, had four individuals performing service during that day. It is again noted that the individuals counted need not be regularly employed and that the individuals counted on the different days do not have to be the same persons.

"Wages" means gross wages before pay deductions. Also, the criteria is "wages paid" rather than "wages payable."

An employing unit becomes an employer under this subsection on whatever day of the twentieth week the necessary qualifying experience is completed. Technically applied, the subject date may be on whatever day in the twentieth calendar week. However, the practice has been adopted of fixing the "subject date" (the date on which the employing unit becomes an employer) as the last day in the calendar week within which the last day of qualifying experience occurred. An employing unit who becomes an employer by paying either $1,500 in wages (Section 201.021) $1,000.00 in wages (Section 201.027) or $6,250.00 in wages (Section 201.028) during a calendar quarter is assigned a subject date effective the date on which the employer meets the assigned wage amount. If it is difficult to determine the exact date, the date on which the employer is subject may arbitrarily be assumed in all cases to be the LAST day of the third month of the quarter in which the payroll reaches the requisite wage amount. Action by a corporation's Board of Directors in authorizing payment of wages to officers may determine the corporation's subject date as shown by the following example:

A Corporation has no employees in year 1 other than four corporate officers. They perform service throughout the year but salaries are not authorized until the meeting of the Board of Directors in December. Subject date for the corporation is the end of the twentieth week in year 1. (Since wages are not paid until December, tax may be paid in January year 2, without interest under Section 213.021.)

Employer status and liability for taxes are established under Section 201.021 more often than under any of the other definitions of an "employer." An investigation or an audit of an employing unit's records is easily accomplished if the employing unit has maintained records to include the information prescribed by Commission Rule Number 815.6. However, many employing units do not maintain the complete information prescribed by the Commission Rule. When the employee count is close to the border line of one individual for twenty weeks, the requirement for records becomes important. Failure to keep the prescribed records may be through ignorance. It would be difficult to prove that such failure was a deliberate attempt to evade the provisions of the law. Unless there is substantial proof that there was a deliberate attempt to evade, there is little likelihood that the penalties prescribed in the statute for failure to keep adequate records will be imposed.

The type of inadequate records most often found are those which show the names of the individuals performing services during each week and then give the total amount of wages received for the week by each individual. There is probably no other instance in which the exercise of discretion and good judgment can so effectively assist the Commission in good administration. The Commission representative examining records of this type should first make an open-minded study of the employing unit's business operations. Talk to the employer about the normal number of employees required in his business and about the circumstances which occur to cause an unusual need for more employees. Learn the type of work done by all of the individuals listed in the records, their usual working schedule, and their rates of pay. Make thorough inquiries about each of the individuals appearing in the records. When this type of information has been secured, the representative examining the payrolls is in a position to speculate on the question of whether or not there is likelihood that the employing unit became an employer in some calendar year. This type of discretion can be placed in Commission field representatives only when carefully, judicially and conscientiously used. When a question of employer status appears unresolved because of inadequate records, field representatives are not required to furnish proof that there is no employer liability. In every instance, however, the Act and Rules require that an employing unit file a report with the Commission giving the information needed to determine its status. Whether or not liability is questionable, this information must be secured from the employer, by means of a status report or otherwise. By examining the records and by use of discretion, the representative must determine whether the facts appear to be such that he/she should take exception to the employer's statement of non-liability and attempt to prove, through audit working papers and other information, that there has been the qualifying experience required under this subsection.

When submitted in refutation of an employing unit's statement, the Accounts Examiner's proof of liability under this subsection must support the belief that liability exists.

The information on working papers prepared from the records and other sources should be presented in such form as to analyze the employer's records as they have been maintained and also to explain their contents through information regarding the type of work done by each individual, his usual working hours, his rate of pay, any provisions for overtime pay, and the usual times the business is open to the public. If possible all of this information should be presented in a manner that will substantially support liability in the event it is necessary to place the Commission's claim for taxes before a court in civil action.