A Guide to PEO in Kansas

Managing HR operations while staying compliant with Kansas labor and employment laws can be challenging for growing businesses. A professional employer organization (PEO) helps you streamline these processes, giving finance teams more scope to focus on high-level strategy.

Keep reading to discover how a PEO can benefit your Kansas-based teams and drive business growth.

The role of PEOs in Kansas

PEOs are a valuable resource for companies looking to streamline and scale their HR operations. These services handle processes like payroll processing, employee benefits, and HR compliance with state-specific employment laws for your workforce. No longer burdened with these tasks, you’re free to focus on strategic priorities like growth and innovation.

When partnering with a PEO, you enter into what’s called a co-employment relationship. This means the provider assumes some of your responsibilities as the employer such as handling taxes and benefits. However, the PEO has no say over the daily running of your business or how employees perform their jobs.

Kansas regulates PEO providers to ensure they act responsibly. All PEOs operating within the state are required to register with the Kansas Commissioner of Insurance and provide details about their organization. They’re also prohibited from selling insurance so they can only arrange and manage your employee benefit plans.

Benefits of partnering with a Kansas PEO

Partnering with a PEO lets you streamline core operations, access expertise, and minimize compliance risks. Let’s take a closer look at the benefits you can expect:

Cost and time savings

Outsourcing HR functions makes it easier to scale processes, saving you considerable resources. You can leave time-consuming tasks to the provider instead of burdening your in-house teams or expanding departments.

PEOs also give you access to advanced tools like workflow automation and data analytics so you can streamline processes further. You save time on tasks and make fewer errors, meaning your team spends less time fixing mistakes.

Deel customer Tough Leaf told us they reduced HR expenses by 30% just through using Deel PEO services.

Expert insights

PEOs give businesses access to specialized HR and compliance that might otherwise be out of reach. These insights are especially valuable for small to mid-sized businesses that don’t have the resources to handle risk management effectively or absorb hefty penalties.

Your company can also use your PEO’s expertise to inform your strategies. For example, their insights into Kansas’ overtime thresholds can help you plan shifts that minimize overtime costs while ensuring you’re fully staffed during peak hours.

Stronger compliance

Kansas businesses must navigate a maze of state and federal laws to avoid fines. The state is known to take a hard stance on employment and labor laws. For example, a staffing company in Overland Park, Kansas, paid $3,068,859 in back wages to 1,677 contract employees after failing to make timely payroll payments for workers conducting COVID-19 testing in June and July 2020.

Partnering with a PEO helps you understand which laws apply to your business and align with the relevant regulatory requirements. As the provider assumes responsibility for ensuring compliance, your team won’t get sidetracked by researching local labor and employment laws.

Accessible benefits plans

PEOs can leverage their combined client base to negotiate discounts at volume with insurance providers. This allows you to offer more lucrative benefits packages to employees without overextending your budget.

The state of Kansas requires many employers to provide workers’ compensation insurance. A PEO can confirm whether your employees qualify for coverage and help you find a cost-effective plan.

Superfiliate says their partnership with a PEO gives them peace of mind. “Before Deel, hiring in a new state meant increasing our risk of compliance issues,” explains Andy Cloyd, CEO of Superfiliate, “By ensuring we stay compliant, Deel PEO not only saves us money but also alleviates our mental load.”

Payroll, labor, and employment laws in Kansas

Kansas employers must comply with both federal and state laws concerning labor, payroll, and employment practices. These laws are complex and frequently overlap.

Partnering with a PEO helps ensure you meet all the relevant obligations and benefit from any exemptions for your business size or industry.

Here’s a summary of the key laws in Kansas a PEO can assist you with:

Payroll and benefits laws

• Minimum wage: Kansas has set the basic minimum rate at $7.25 per hour. If your employees are subject to both state and federal law, you must use the higher of the two thresholds
• Payroll taxes: You must withhold personal income tax (PIT) from the wages of any full-time Kansas residents. The rate is between 3.1% to 5.7% of their full salary
• Supplemental wages: If employees earn extra money on top of their regular pay, such as bonuses, commission, or overtime, you must apply a higher tax rate of 5%
• Overtime: State law says you must pay overtime at a rate of 1.5 times the regular wage when employees exceed 46 hours in a working week. As the federal government sets the limit at 40 hours, check which laws apply to your business. You can require your teams to work overtime unless they’re under the age of 16
• Paydays and pay periods: You must pay employees at least once a month, on regular days, and inform them in advance of any changes
• Payment methods: Kansas law says you can choose whether to pay employees in cash or via transfer, check, or payroll cards. Note that you can’t make them accept payment via direct deposit
• Vacation pay: Workers aren’t entitled to vacation or sick pay but employers are free to implement paid time off (PTO) policies
• Final paychecks: Kansas employers aren’t required to pay severance or any unused vacation pay when they terminate employees. However, you must send the final paycheck by the next regular payday
• Health insurance: Kansas doesn’t mandate employers to provide any health insurance beyond the federal requirements

Labor laws

• Meal and rest breaks: Employers aren’t required to provide breaks to workers but they can choose to do so
• Paid leave: Likewise, you don’t have to offer paid sick or vacation leave but many employers do
• Maternity leave: The state follows the Family and Medical Leave Act (FMLA), meaning new parents get 12 weeks of fully paid leave from the moment of birth or adoption Also, note that you must treat pregnancy-related disorders as you would any other temporary disability
• Voting leave: If your worker hours prevent employees from voting, they can take up to two hours off to go and cast their ballot
• Jury duty: You must give employees time off for jury duty but you don’t have to pay them
• Workers comp: All businesses must provide workers’ compensation unless they’re in agriculture or generate less than $20,000 in payroll. Business owners can choose whether to purchase a policy, join a group-funded pool, or qualify as a self-insurer
• Accident reports: On a related note, you must file reports within 28 days if workplace injuries prevent employees from working for multiple days or shifts. Any later and you risk a $250 penalty
• Workplace safety: The Kansas Department of Labor (KDOL) has established rules to identify risks in the workplace and keep people safe. For example, you must have a safety program and display the required informational posters for your industry
• Union laws: Kansas is a ‘right-to-work’ state which means your workers can’t be forced to join a union or pay dues as a condition of employment

Employment laws

• Worker classification: Employers are responsible for correctly classifying workers as either employees or independent contractors. The state sets various criteria for employment such as whether someone must follow your instructions or if they have the power to hire and manage others
• At-will employment: Kansas is an ‘at-will’ state so you can dismiss employees without warning provided the reason is legal and it doesn’t contradict any agreements in their contract. Likewise, your employees are free to resign without working a notice period
• Discrimination laws: State law says that everyone has the right to employment provided they have the requisite experience and qualifications. Officials may investigate businesses that are seen to discriminate against those based on their background, sex, disability, or familial status

Additional requirements and enforcement

Besides these laws, most employers are subject to unemployment tax. You must pay state unemployment insurance (SUI) on the first $14,000 of each employee’s wages. KDOL bases the rate on how often your former workers have claimed unemployment benefits.

See also: State Unemployment Insurance (SUI) Rates by State (2024)

If you’re a newly established business, you get a fixed SUI rate of 2.7% for the first three or four years. Afterward, you automatically switch to a custom rate.

When you partner with a PEO, they become responsible for managing unemployment tax due to your co-employment relationship. They calculate payments and file quarterly returns to KDOL.

Kansas has many unique laws but also borrows frequently from federal statutes. Where these laws overlap, businesses usually have to follow the ones that give workers the most rights and benefits.

See also: Comprehensive Guide to Payroll in Kansas

How to choose the right PEO in Kansas

Finding the right PEO ensures your business gets the most value and support from the partnership. It also means you’ll be less likely to need to switch PEO providers in the near future, disrupting your operations.

Follow these steps to choose a PEO that aligns with your needs and goals:

1. Define your business needs

Start by assessing your HR operations to identify inefficiencies and gaps where you could make improvements. You should consider your specific needs and how these might evolve as your business scales and grows. Look specifically at functions like payroll processing, benefits administration, and HR compliance management.

If you plan to expand or unify operations elsewhere, consider each provider’s other offerings. Do they have PEOs in other states? Or even an Employer of Record (EOR) service to facilitate hiring abroad?

2. Research PEOs with Kansas expertise

Narrow your search by focusing on PEOs with a strong presence in Kansas. You can see whether they have a proven track record of helping businesses successfully navigate the state’s labor and employment laws. Case studies, testimonials, and reviews can indicate the quality of their service.

3. Evaluate the range of services and quality of benefits

Check the services offered by PEOs on your shortlist to see how well they meet your business needs. The quality of their benefits packages is a key consideration. They should be cost-effective enough to fit into your budget without compromising the quality.

Additionally, see whether you can customize the PEO to your unique setup. Does their technology integrate with your existing solutions? Can you scale their services to meet your needs as your company grows?

4. Assess compliance and risk management capabilities

Learn how the PEO stays updated on state and federal regulations that apply to your business. You can arrange demos to ask about their approach to mitigating risks or making the most of benefits.

See how they keep client companies updated about changing regulations. For example, Deel has a continuous compliance hub that sends all our customers updates about changing international laws—including specific US states.

5. Check customer service and support

Look into the PEO’s support options, including their availability and response times. You need quick access to expert guidance for time-sensitive compliance issues like payroll anomalies and workplace accidents.

Also, see whether they can assign you a customer success manager. This gives you a dedicated point of contact so you don’t have to work with unfamiliar agents and explain your setup to multiple people.

6. Review and negotiate the contract

Thoroughly examine the PEO contract to ensure you understand all the terms, including fees, client responsibilities, and exit clauses. Consult with a legal advisor to check that it’s in your company’s best interests to sign. If there are any unfavorable terms, see if the provider is open to negotiation.

7. Plan for implementation and transition

Proper planning and open communication ensure a seamless start to your partnership. It’s best to set a clear transition timeline with your provider, including milestones for integrations, data transfers, and the launch day.

Be sure to communicate the changes to your team to help them get on board. You can highlight the benefits of partnering with a PEO and address any concerns.

Read our guide on how to choose a US PEO for more insights.

Manage your Kansas, US, and global workers with Deel

Deel makes payroll and HR management easy, whether you’re hiring in one state, across the country, or around the world.

As your PEO*, Deel takes care of payroll, HR, and benefits administration while ensuring state tax compliance and handling sensitive issues by providing:

• Expert payroll administration
• Access to benefit plans from leading carriers and benefits administration
• Robust HRIS with free IT, Finance, and PTO management
• State-specific trainings, HR policies, and on-demand HR support
• Advanced tax and benefits compliance
• And more

Book a demo to learn more about using Deel’s PEO in Kansas.

*Provided by Deel PEO US, LLC, Deel Employment Services, LLC, or through Deel's partnership with licensed providers where required.