The Attorney General of Texas 

November 30, 1981 

MARK WHITE 

Attorney General 

Supreme Court Suildlng 

P. 0. Box 12546 

Austin, TX. 76711 

512/475-2501 

Telex 9101674.1367 

Telecopier 5121475.0266 

1607 Main St., Suite 1400 

Dallas, TX. 75201 

2141742-8944 

4624 Alberta Ave., Suite 160 

El Paso, TX. 79905 

9151533.3464 

1220 Dallas Ave., Suite 202 

Houston. TX. 77002 

7 13/650-0666 

606 Broadway, Suite 312 

Lubbock, TX. 79401 

6061747-522-9 

4309 N. Tenth, Suite B 

McAllen, TX. 79501 

5121662-4547 

200 Main Plaza, Suite.400 

San Antonio, TX. 79205 

512/2254191 

An Equal Opportunity/ 

Affirmative Action Employer 

Honorable Ernie W. Tullis 

Administrator 

Texas Employment Commission 

T.E.C. Building 

Austin, Texas 78778 

Dear Mr. Tullis: 

Opinion No. Mw-397 

Re: Definition of "benefit 

wage credits" in the Texas 

Unemployment Compensation Act 

and related questions 

YOU inform us that the TeXS.9 Employment Commission has 

interpreted article 5221b-l(e), V.T.C.S., of the Texas Unemployment 

Compensation Act, to prohibit it from considering an individual's 

wages in excess of the maximum amount of wages as defined in the 

Federal Insurance Contributions Act when it determines his right to 

unemployment benefits. You first ask whether the commission may 

change its interpretation of this provision to permit consideration of 

the actual wages paid an individual. You also wish to know the amount 

of wages to be used in applying article 5221b-l(e) when the maximum 

amount of wages defined in the Federal Insurance Contribution Act 

changes between the time the wages are earned and the time a claim for 

benefits is filed. 

Article 5221b-l(e), V.T.C.S., provides in part: 

Benefit Wage Credits: 'Benefit wage credits' 

means those wages as defined in this subsection of 

the Act, which are used in determining an 

individual's right to benefits.... [Flor the 

purposes of this Section..., wages received by an 

individual in any calendar year shall include all 

remuneration from each employer for employment up 

to the maximum amount of wages as defined in the 

Federal Insurance Contributions Act . ..a* 

amended.... 

At the present time, the maximum amount of wages as defined by the 

Federal Insurance Contributions Act [hereinafter F.I.C.A.] is $29,700. 

42 U.S.C.4430. In answer to your first question, the statute clearly 

sets out the maximum amount of wages that may be considered in 

determining an individual's benefits. The commission may not consider 

actual wages in excess of this maximum. See Teacher Retirement System 

v. Duckworth, 260 S.W.2d 632 (Tex. Civ. AK - Fort Worth 1953), aff'd 

p. 1348 
Mr. Ernie W. Tullis - Page 2 (Mw-397) 

per curiam, 264 S.W.2d 98 (Tex. 1954) (courts will not accept agency 

interpretation contrary to clear meaning of unambiguous statute). 

An unemployed individual may receive benefits with respect to any 

benefit period only if he meets certain requirements as to income 

distribution within his "base period," defined as "such period of four 

(4) consecutive completed calendar quarters within the last five (5) 

completed calendar quarters immediately preceding the first day of an 

individual's benefit year as the Commission may by regulation 

prescribe." V.T.C.S. art. 5221b-17(a)(2). The applicant may receive 

benefits only if he has received total benefit wage credits in his 

base period of not less than one and one-half times his high quarter 

benefit wage credits, or if he has received wages within at least one 

quarter equal to two-thirds of the F.I.C.A. maximum wages. V.T.C.S. 

art. 5221b-2(e). 

Under these definitions, some claimants are denied benefits 

solely because they receive wages in previous quarters totaling the 

F.I.C.A. maximum. Their compensation for the balance of that year is 

not considered "wages" for the purpose of determining unemployment 

benefits. 

This problem derives in part from the commission's interpretation 

of the provisions an employee must meet to qualify for unemployment 

compensation. Although under article 5221b-17(a)(2) the commission 

may define the "base period" as = four consecutive calendar quarters 

within the last five quarters immediately preceding an individual's 

benefit year, the commission has by Rule 1 restricted claimants to the 

first four. See T.E.C. Rule 1 (1976). 

You cite, for example, a case involving a January 15, 1979. 

claim. According to Rule 1, the claimant's base period consisted of 

the fourth quarter of 1977 and the first three quarters of 1978. His 

reported wages were $1620.89 for the second quarter of 1978 and 

$5376.99 for the third quarter of 1978. These reported payments did 

not meet the "one and one-half times" requirement of article 

5221b-2(e), although testimony at the hearing showed that the claimant 

received actual wages of $5850.92 in the fourth quarter of 1977. If 

these were allowed to be considered as benefit wage credits, the 

claimant would have met the "one and one-half times" requirement and 

would have qualified for unemployment compensation. However, earlier 

in 1977 claimant had received from the same employer, who paid him the 

$5850.92, wages in excess of $16,500, the then F.I.C.A. maximum wage. 

Since both payments were in the same calendar year although not in the 

same base period, the $5850.92 payment in the fourth quarter of 1977 

was not considered by the commission ag "wages." Claimant did not 

qualify under the alternative provided in article 5221b-2(e) for 

persons receiving within at least one quarter of the base period wages 

equal to two-thirds of the F.I.C.A. maximum. 

If the commission had used the last four consecutive calendar 

quarters within the last five calendar quarters immediately preceding 

p. 1349 
Mr. Ernie W. Tullis - Page 3 (MW-397) 

the claimant's benefit year in determining the base period, instead of 

the first four now specified by Rule 1, the claimant's position might 

have been changed, depending on his wages in the last quarter of 1978. 

We find nothing in the statutes to prevent the commission from 

specifying by regulation that the base period will consist of the four 

consecutive quarters of the five that will yield the greatest amount 

in benefit wage credits in regard to each claim. Further, it is 

expressly within the authority of the commission to prescribe 

"equivalents" for "calendar" quarters that might more equitably 

distribute benefit wage credits within the base period by the simple 

expedient of considering equivalent quarters ending on days other than 

the last days of the calendar quarters. _ See V.T.C.S. art. 

5221b-17(a)(3). 

Another situation with which you are concerned involves an 

initial claim filed in the second quarter of a year in which the 

F.I.C.A. maximum had been increased. The base period involved 

consists of the four calendar quarters of the preceding year. The 

claimant did not meet the "one and one-half times" requirement of 

article 5221b-2(e) because he earned the large majority of his 

qualifying wages in the first quarter of that year. In applying the 

alternative qualifying provision of article 5221b-2(e), the commission 

used the F.I.C.A. maximum wage in effect for the year in which the 

claim was filed instead of that in effect in the year in which 

claimant's high quarter fell. The difference in the maximum wages 

used in such cases can determine whether or not a claimant qualifies 

for unemployment benefits. 

In answer to your second question, we believe that the commission 

in determining the eligibility of a claimant should use the maximum 

wage in effect when claimant earned and received his qualifying wage. 

This would not be contrary to any express provision in the Texas 

Unemployment Compensation Act and would seem to be within the 

commission's administrative powers. 

Our conclusion that the commission should apply the law in effect 

when the employee's wages were earned even though the federally 

defined maximum wage has increased by the time the commission 

determines his eligibility for benefits, derives from the rule of law 

forbidding a retroactive construction of statutes so as to deprive a 

party of a substantial right. See 12 Tex. Jur. 2d Constitutional Law 

55121, 122. The commission's application of the law in effect at the 

time of the hearing often injures the employee because of increases in 

the F.I.C.A. maximum wage prior to the hearing. We believe the 

commission has power to construe the eligibility statute so that it 

will operate fairly and justly to all claimants for benefits under the 

Texas Unemployment Compensation Act. 

SUMMARY 

Article 5221b-l(e), V.T.C.S., of the Texas 

Unemployment Compensation Act does not consider 

p. 1350 
Mr. Ernie W. Tullis - Page 4 (MN-397) 

actual wages paid an individual in excess of the 

maximum wages defined in the Federal Insurance 

Contributions Act as a determining factor for 

unemployment benefits. Otherwise, the act itself 

authorizes the commission to prescribe rules for 

the equitable determination of benefit wage 

credits for each claimant. The maximum wages to 

be considered for unemployment benefits are the 

wages received by the employee not in excess of 

the maximum wages defined in the Federal Insurance 

Contributions Act at the time they were earned. 

MARK WHITE 

Attorney General of Texas 

JOHN W. FAINTER, JR. 

First Assistant Attorney General 

RICHARD E. GRAY III 

Executive Assistant Attorney General 

Prepared by Bob Lattimore 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

Susan L. Garrison, Chairman 

Jon Bible 

Rick Gilpin 

Bob Lattimore 

Jim Moellinger 

p. 1351