This section discusses the aspects of the law that specifically apply to employing units liable under FUTA.

"Employer" means: an employing unit that is liable for the payment of taxes under the Federal Unemployment Tax Act (26 U.S.C. Section 3301 et seq.) for the current calendar year;

COMMENT: The reference to "current calendar year" in Section 201.025 means the year being examined for tax liability. For example, if the status of the employer is being examined with respect to 1996, the employer is subject if it is found that the employer was liable under the Federal Unemployment Tax Act for 1996 and is an employing unit in Texas with respect to that year. The subject date is the later of the two dates. That is, the date the employer became subject under the Federal Unemployment Tax Act and the date he became an employing unit in Texas.

Prior to 1970 an employer subject under Section 201.021 for a given year was liable under the state law for the following year even though he did not have qualifying experience in the second year for the reason that he had to complete the second year without qualifying experience in order to be eligible to terminate coverage. This was not true with respect to liability under the Federal Unemployment Tax Act since under that law each year was examined separately with respect to tax liability. Beginning with 1970, the Federal law was changed and a taxpayer is described as one who has qualifying experience in either the current or the preceding calendar year. For example, an employer subject under the Federal Unemployment Tax Act by reason of qualifying experience in 1996 is subject to the provisions of the Federal law with respect to 1997 even though he may not have qualifying experience in 1997.

"Employer" means: an employing unit that the Federal Unemployment Tax Act (26 U.S.C. Section 3301 et seq.) requires to be an employer under this subtitle as a condition for approval of this subtitle for full tax credit against the tax imposed by the Federal Unemployment Tax Act.

COMMENT: This subsection covers employing units not otherwise liable who must be covered under the FUTA. For example, an employer is liable in Oklahoma under FUTA but does meet Texas criteria. The employer would be liable under the TUCA by virtue of being liable under FUTA.

Under Subsection 201.026:

In this subtitle, "employer" also means a state, a political subdivision of a state, or an instrumentality of a state or political subdivision of a state that is wholly owned by one or more states or political subdivisions of one or more states.

Comment: All persons performing services for the State or political subdivision thereof are in covered employment except those specifically exempted by Section 201.063 of the Act.

Examples of political subdivisions are county, city, water district, conservation district, irrigation district, school district, etc. Mental health and mental retardation services centers may be either a part of the state government or a political subdivision of the state. The services performed for political subdivisions of the state were excluded from the definition of employment until January 1, 1978.

Federal law mandated that all states extend unemployment insurance coverage to virtually all employees of the states and their political subdivisions and instrumentalities.

Section 205.001 -- effective January 1, 1972.

NOTE: Section 205.001 below was amended effective January 1, 1978, by the 65th Legislature and is included here only for background concerning the election of coverage by the State of Texas:

Section 205.001(a) now reads:

Comment: The State of Texas exercised this right to become a reimbursing employer (and also waived the exclusion from the definition of employment then provided in Section 201.063) by enactment of Section 29 of the Act, effective January 1, 1972, which provides:

Note that coverage applies to all State departments and branches, including instrumentalities of the State, but does not include political subdivisions of the State under Section 29 of the Act.

This section discusses the aspects of the law that specifically apply to domestic employers.

1. In this subtitle, “employer” means an employing unit that paid cash wages of $1,000 or more during a calendar quarter in the current or preceding calendar year for domestic service in a private home, local college club, or local chapter of a college fraternity or sorority.
   
2. An employer subject to this section who is not otherwise considered an employer under this subtitle, annually, may report quarterly wages and pay contributions. An employer who elects to report wages and pay contributions under this section must make the election not later than December 31 of the year before the first calendar year reported.
   
3. Contributions paid as provided by Subsection (b) become due and are required to be reported and paid by each employer not later than January 31 with respect to wages for employment paid in the preceding calendar year. For a rate taking effect under Section 204.041(c) during the preceding calendar year, the commission shall estimate the rate, subject to a correction when a final computation is made as provided by Section 204.047(c).
   
4. An employer who elects to report wages and pay contributions annually shall file, on the request of the commission, reports at other times as necessary to adjudicate a claim or to establish wage credits.
   
5. With respect to an employer who reports wages and pays contributions annually under this section, any penalty or interest imposed on the employer shall be computed in the same manner as for other types of employment.
   
6. An election by an employer under this section is not revocable by the employer before the second anniversary of the date of the election.
   
7. An employer under this section is not an employer for wages paid for a service other than domestic service unless the employer is treated as an employer for that service under another provision of this subtitle.
   

Comment: Unless the above conditions are met, employers already subject under some other provision of the Act would not be required to report their domestic service employees. Even though liable employers should report wages for regular and domestic service under one account number, liability under Section 201.027 should be determined independently.

In general, services of a household nature, in or about a private home, a local college club, or local chapter of a college fraternity or sorority, include services rendered by cooks, maids, butlers, valets, gardeners, and chauffeurs of automobiles for family use.

On January 1, 1998, the interpretation of domestic services was broadened.

Work performed in a private home by a baby sitter, butler, caretaker, chauffeur, companion, cook, footman, furnaceman, gardener, governess, groom, handyman, housekeeper, houseman, janitor, laundress, maid, nursemaid, seamstress, sitter, waiter, watchman, or valet.