Relating to the consideration of wage replacement benefits in the nature of workers' compensation.

SB 2989 clarifies that wage replacement benefits paid by employers without workers' compensation insurance to injured employees are treated as workers' compensation for federal tax purposes. This specifically affects employers who do not carry workers' compensation insurance, ensuring their disability payments are excluded from federal income and employment taxes. The bill amends Texas Labor Code to explicitly include these payments under the tax exclusion, resolving ambiguity in existing law. It takes effect September 1, 2025, and does not create new benefits or alter workers' compensation coverage requirements.