Top 8 Kansas payroll best practices every business should know

Navigating payroll can be a complicated task for any business, but it comes with its own unique requirements in the state of Kansas. Keeping up with both federal and Kansas-specific regulations is crucial for staying compliant and avoiding costly penalties. Here are 8 key payroll best practices every Kansas business owner should master.

1. Know the Kansas payday rules

The Kansas Wage Payment Act requires that all employees must be paid at least once per calendar month. Your business must establish and stick to a regular payday, communicating this to employees in advance.

2. Follow the 46-hour overtime rule

While many businesses operate under the 40-hour federal overtime rule, Kansas state law is different. For businesses not covered by the Fair Labor Standards Act (FLSA), overtime must be paid for all hours worked over 46 in a single workweek. However, if your business is engaged in interstate commerce or has an annual revenue over $500,000, the 40-hour federal rule applies. As a best practice, always defer to the law that is most beneficial to the employee.

3. Handle deductions correctly

In Kansas, you can only make deductions from an employee's paycheck under specific circumstances. These include:

• Deductions required or empowered by state or federal law (e.g., taxes, court-ordered withholdings).

• Deductions for medical, surgical, or hospital care where the employer receives no financial benefit.

• Deductions with the employee's explicit, written consent.

You are prohibited from deducting for things like cash shortages, uniform costs, or damage to company property.

4. Provide pay statements upon request

Kansas law does not require you to automatically provide a pay stub to employees. However, if an employee requests it, you must furnish an itemized statement of deductions for each pay period. A best practice is to provide a detailed pay stub with every payment, whether electronic or printed. This increases transparency and reduces disputes.

5. Report new hires promptly

When you hire a new employee in Kansas, you must report the hire to the Kansas Department for Children and Families within 20 calendar days. This helps enforce child support obligations and is a standard compliance requirement.

6. Stay on top of unemployment insurance taxes

All Kansas employers are subject to the Kansas Employment Security Act. You must register with the Kansas Department of Revenue within 15 days of hiring your first employee. State Unemployment Insurance (SUI) tax rates vary depending on your business, and it's essential to stay current with your payments to avoid penalties.

7. Comply with final paycheck rules

If an employee resigns or is terminated, you must pay their final wages no later than the next regular payday. This applies regardless of whether the departure was voluntary or involuntary.

8. Digitize and keep thorough records

For every employee, you must keep detailed payroll records, including their name, occupation, rate of pay, total wages, and hours worked, for at least three years. The best practice is to digitize these records using secure software. This not only saves space but also allows for quick retrieval during audits.

By following these Kansas-specific payroll best practices, you can ensure your business remains compliant and your employees are paid accurately and on time.