Local Area Labor Costs

Gainesville is desirable from both a business and “quality of life” perspective. Affordability and community involvement create a welcoming environment for employees and their families.

Unemployment Insurance

The unemployment insurance tax rate is based on the type of business, Texas’ operating history of the business employee experience record, and the size of payroll.  The Texas Workforce Commission administers and collects this tax levied on the first $9,000 in wages for each employee.  For new businesses, the initial rate is 2.7%.  An adjustment made eighteen months later is based on layoff experience and resulting rates range from 0.35% to 6.35%.

Workers' Compensation

Companies located in Texas have freedom of choice when it comes to workers’ compensation.  Texas is one of only three states in the country that does not require workers’ compensation coverage.

Employers in Texas can buy workers’ compensation insurance from among 260 private insurers, or from the Texas Workers’ Compensation Insurance Fund (a private fund capitalized by a state bond issue), or an employer can “go bare” and not provide workers’ compensation coverage.

Companies without coverage instead pay for employees’ injuries out of pocket or by purchasing standard health and disability policies, along with an indemnity policy to guard against catastrophic claims.

According to a study by A&M University, 44% of businesses in the state don’t provide workers’ compensation insurance.  

Another option for employers who meet statutory requirements is a state self-insurance program.  This program offers all the liability limitations that presently exist for workers’ compensation subscribers while reducing costs.  

Texas reformed its Workers’ Compensation Act in 1991.  Since then worker-comp premiums paid by businesses have come down by more than half and the number of claims paid has been cut almost in half.  At the same time, injured workers are being paid faster, benefit levels have increased and reports of workplace injuries have diminished.  All of this after the plaintiff lawyers were essentially replaced with an administrative mechanism.

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