Kansas Workers Compensation Requirements for Employers

A shop owner in Wichita once told me he was safe because he only had three people and the threshold was five. He had read that number somewhere, believed it for two years, and had no idea that Kansas does not count employees at all. It counts payroll dollars, and the line sits at $20,000 a year.

His payroll was about $74,000. He had been uninsured the entire time, and one bad fall would have put the medical bills, the wage benefits and a criminal charge on him personally. We got a policy bound that week. He was lucky nobody had been hurt yet.

Below are the Kansas rules in the order you will need them: who has to carry coverage, who is outside the act, where the policy comes from, and what the clock looks like once somebody is hurt. The payroll test comes first, because everything else depends on it.

Who Must Carry Coverage

Kansas counts dollars, not people. Coverage is mandatory for every employer whose gross annual payroll runs above $20,000, and there is no headcount threshold anywhere in the act. A single employee can trigger the requirement. In theory thirty part-timers could stay under it, though almost no business does.

The rule sits in K.S.A. 44-505 (Kansas Statutes Annotated). The act applies to all employments in the state except agricultural pursuits, and except a small employer that passes a two-part payroll test.

To pass that test, an employer must have had a total gross annual payroll for the preceding calendar year of not more than $20,000 for all employees, and must reasonably estimate it will not exceed $20,000 in the current calendar year. Both halves have to be true at once. A brand new business with no payroll history is judged on the estimate alone.

That threshold is lower than it sounds. Two full-time people at the Kansas minimum wage of $7.25 an hour pass $20,000 in about eight months.

The Kansas Department of Labor states the rule the same way in its workers compensation division FAQ: in general, an employer with a payroll exceeding $20,000 must secure coverage. A department publication adds that coverage begins the first day on the job.

Counting the payroll is where employers slip. Under K.A.R. 51-11-6 (Kansas Administrative Regulations), all payroll paid to all workers is included, whether it was paid inside Kansas or outside it.

Entity type changes the count. A sole proprietorship or partnership leaves out wages paid to the owners and to members of the owner’s family. A corporation does not get that break: corporate payroll means the total paid to every corporate employee, even one who has elected out of the act.

Who Is Excluded and Who Can Elect

Beyond the payroll test, the Kansas exclusion list is short: agricultural pursuits, qualifying real estate agents, firefighters in a relief association that filed an exception, and certain owner-operator drivers.

What is missing from the list matters as much as what is on it. There is no categorical exemption for domestic workers, household help, casual labor, part-time staff or minors. Minors are covered whether they are legally or illegally employed.

Two main mechanisms are at work. K.S.A. 44-505 lifts whole categories of employment out of the act. K.S.A. 44-508(b) defines who counts as an employee in the first place, and that is where owners sit outside the system until they buy their way in.

Elections are filed electronically through OSCAR, the department’s online filing system, and the direction of the election depends on who you are. Owners elect in. A corporate employee holding at least 10 percent of the stock can elect out, but only before an injury, never after. Even then, K.A.R. 51-11-6 keeps that person’s pay inside the $20,000 payroll calculation.

Independent contractor status is the exclusion most often claimed and most often wrong. The department’s fact sheet is blunt that no statute defines it. Instead, an administrative law judge applies the common law right of control test built from Kansas Supreme Court decisions. What matters is whether the right to direct the work was reserved, not whether it was used.

K.S.A. 44-5,127 adds one more piece of paper: it lets a person who is not required to be covered sign an affidavit of exempt status on a form from the Kansas Insurance Department.

The affidavit creates a rebuttable presumption that the signer is not an employee, meaning the law treats that as true until proven otherwise. It protects the business holding it from that person’s claim. Falsifying one is a misdemeanor carrying a fine of up to $1,000.

Where the Policy Comes From

Kansas has no state fund. K.S.A. 44-532(b) gives an employer three ways to secure the payment of compensation: a carrier policy, self-insurance, or a group-funded pool. For a small business the first one is the only realistic option. The assigned risk plan in the table is just the fallback route to a carrier policy.

Self-insurance is out of reach for a small business, and the department says so in plain numbers. Its self-insurance publication states that an applicant should have at least 100 employees and a minimum manual premium (premium at standard rates, before adjustments) of roughly $250,000 to $300,000 before self-insurance is even feasible.

The same publication says the applicant must have been in business under its present corporate identity for at least five years, and should allow 60 calendar days for the application to be reviewed. Permits expire annually and are re-examined against current financials.

Premium itself is payroll driven. Each year the National Council on Compensation Insurance files loss costs, the claim-cost figures carriers build their rates on, for the Kansas Insurance Department to approve. Roughly 600 job classifications are in use.

An employer becomes experience rated, meaning its own claims history starts to move its premium, once its annual premium reaches $4,500 in the past two years, or averages $2,250 over a longer stretch. If your classification looks wrong, you can appeal the rating in writing to the carrier and to the commissioner of insurance.

Two administrative details catch people out. First, the cost of coverage is the employer’s alone, because K.S.A. 44-532(b) says the cost shall be paid by the employer and not the employee. Second, the carrier, not you, tells the state you are insured: it must file written notice of issuance, nonrenewal or cancellation with the director within 10 days.

Premium starts from estimated payroll. Since a payroll audit trues up the estimate later, our walkthrough of the workers compensation audit explains what the auditor will ask for.

The Poster and the Paperwork

Kansas requires one workers compensation poster. K.A.R. 51-12-2(a) says employers operating under the act must post a notice in one or more conspicuous places telling employees what to do in case of injury. The Division of Workers Compensation supplies that form at no cost: K-WC 40-A, Workers Compensation Rights and Responsibilities.

K-WC 40-A appears on the Kansas Department of Labor list of required state posters, next to the unemployment insurance poster, the human trafficking notices, the equal opportunity notice from the Kansas Human Rights Commission and a child labor poster. That last one is only required for employers of youth under 16 who sit outside the Fair Labor Standards Act.

Nothing under the compensation act has to be handed to a new hire. This surprises employers who arrive from states with a new employee pamphlet rule. In Kansas the written handout duty is triggered by an injury, not by a start date, and the statute sets its deadline in one word: immediately.

None of that stops you from putting the carrier name and the claim reporting number into the onboarding packet and the handbook. No statute requires it, and every employer who has watched a supervisor hunt for a policy number at 7 a.m. on a Saturday does it anyway.

Injury Reporting Deadlines

Two clocks run after an injury, and they belong to different people. The employee owes the employer notice within 30 calendar days of the accident or, if the job has ended, within 20 calendar days after the last day of employment, whichever comes first. The employer owes an accident report to the state within 28 days under K.S.A. 44-557.

The notice rule is K.S.A. 44-520. Notice may be oral or written, and weekends are included in the count.

Where notice goes matters too. If the employer has designated an individual or department to receive it and has told the employee about that designation in writing, notice to anyone else does not count. If no designation exists, notice goes to a supervisor or manager.

Notice can also be excused entirely. K.S.A. 44-520(b) waives it if the employee proves one of three things: the employer or its authorized agent already had actual knowledge of the injury, the employer or agent was unavailable to receive notice within the period, or the employee was physically unable to give it. So treat any report of a work injury as the trigger instead of waiting for a form.

Not every scrape is reportable. The statutory test is whether the injury incapacitated the person from work beyond the remainder of the day, shift or turn on which it happened. Below that line there is no state report, though your own incident record should still exist.

The wage replacement itself has a ceiling that resets every July 1. Under K.S.A. 44-510c, temporary total disability pays two-thirds of the injured worker’s average gross weekly wage, never less than $50 a week and never more than the dollar amount nearest to 75 percent of the state’s average weekly wage. The Kansas Department of Labor’s current benefit levels put that ceiling at $905 for injuries from July 1, 2026 through June 30, 2027.

Penalties for Going Without Coverage

Kansas treats an uninsured employer as a criminal matter and a financial one at the same time. The knowing and intentional failure to secure payment of compensation is a class A misdemeanor, and the civil penalty on top of it starts at $25,000.

Read the civil penalty formula twice, because it is not capped at $25,000. That figure is the floor. An employer whose correct annual premium would have been $40,000 is looking at $80,000, and the money goes to the workers compensation fund rather than to the injured worker.

The civil penalty is assessed after a hearing under the Kansas administrative procedure act, and any final action is reviewable in the district court of Shawnee County.

One narrow mercy exists for the self-employed. K.S.A. 44-532(e) bars the director from fining a self-employed subcontractor for failing to secure compensation for himself. That protection does not extend to the subcontractor’s own employees, and the director enforces the requirement for them as usual.

What to Do When an Injury Happens

The order matters: medical care first, written benefit information to the employee second, and the carrier third. The Kansas quirk is in step one, where the employer or its carrier, not the employee, chooses the doctor.

Step one is worth dwelling on. Because the employer picks the authorized provider, an injured employee who goes elsewhere without permission is in unauthorized medical territory, where K.S.A. 44-510h caps the employer’s liability at $800. That unauthorized medical allowance cannot be used to obtain a functional impairment rating, the doctor’s percentage rating of lost bodily function.

Most of this can be set up before anyone gets hurt: pick the clinic, tell employees in writing who takes injury notices, and keep the claim reporting number where supervisors can find it.

The administrative half of this is what small teams actually drop: who was told, when, which form went where, and whether the supervisor wrote anything down.

FirstHR is an onboarding and HR platform rather than an insurer or a broker, so it does not sell or place coverage. What it holds is the record around the claim, the acknowledgments, the policies and the task with a due date on it, so a 28-day filing window is not something you rediscover on day 29.

Frequently Asked Questions

Does a Kansas business with one employee need workers compensation?

Usually yes, but the test is payroll rather than headcount. An employer is outside the act only if last calendar year’s total gross payroll was $20,000 or less and it reasonably estimates the current year will stay there too. One full-time employee at any normal wage passes that line inside a year.

How is the $20,000 payroll threshold calculated in Kansas?

Count all payroll paid to all workers, whether it was paid in Kansas or elsewhere. A sole proprietorship or partnership leaves out wages paid to the owners and their family members. A corporation cannot use that exclusion and counts the total paid to every corporate employee, including one who elected out of the act.

Who is exempt from workers compensation in Kansas?

Five categories are exempt: certain agricultural pursuits, realtors who qualify as independent contractors, employers with gross annual payroll of $20,000 or less, firefighters in a relief association that waived coverage, and certain owner-operator drivers with their own occupational accident policy. Sole proprietors, partners and LLC members are not employees unless they elect in.

Does Kansas have a state workers compensation fund?

No. An employer secures coverage by buying from a carrier authorized to write workers compensation in Kansas, by qualifying as a self-insurer with the director, or by maintaining membership in a qualified group-funded pool. Employers who cannot buy coverage in the voluntary market use the assigned risk plan through the Kansas Insurance Department.

How long does a Kansas employer have to report a work injury?

Twenty-eight days from the employer’s knowledge of the accident, where the injury keeps the worker from labor beyond the remainder of that day, shift or turn. The carrier files the electronic first report, so the employer’s duty is to notify it in time. Repeated failure to file costs up to $250 per violation.

What is the penalty for not having workers compensation in Kansas?

A knowing and intentional failure to secure coverage is a class A misdemeanor, punishable by up to a year in county jail and a fine of up to $2,500. The director may also assess a civil penalty of twice the annual premium the employer would have paid, or $25,000, whichever is greater, and the state can sue to recover benefits paid on your behalf.

Is there a Kansas workers compensation poster employers must display?

Yes. Form K-WC 40-A must be posted in one or more conspicuous places telling employees what to do in case of injury, and the division provides it free. It sits on the state list of required posters. Nothing has to be given to a new hire; the written handout duty is triggered by an injury instead.