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Kansas Wage Payment Law Amended--No Foolin'
04/05/13

On April 1, Governor Brownback signed into law a bill that gives employers more latitude to make payroll deductions to recoup overpayments, loans, and property provided to employees. Kansas employers have long pushed for this change. The bill, Senate Substitute for HB 2022, becomes effective on July 1. Read on to understand these revisions and what you can do to maximize their benefit to your organization.

Under current Kansas law, an employer may withhold wages in only limited circumstances, such as: (1) when specifically required by law (such withholdings for payroll taxes or garnishments); (2) for healthcare; (3) deposits into a retirement plan; and (4) when the employer has a signed authorization from the employee for a lawful purpose "accruing to the employee's benefit." Old Kansas Department of Labor regulations take a narrow view on what type of deductions accrue to the employee's benefit.

The revisions to the Kansas Wage Payment Act expand the circumstances under which employers may make payroll withholdings or deductions. Upon a signed written agreement between the employer and employee, an employer may deduct or withhold an employee's wages for the following purposes:
  1. as repayment of a loan or advance the employer made to the employee during the course of and within the scope of employment;
  2. to recover a payroll overpayment; and
  3. to compensate the employer for the replacement cost or unpaid balance of the cost of the employer's merchandise or uniforms purchased by the employee.

In addition, upon providing a written notice and explanation, an employer may deduct or withhold an employee's final wages for the following purposes:

  1. to recover the employer's property provided to the employee in the course of the employer's business, including but not limited to tools of the trade or profession, personal safety equipment, computers, electronic devices, mobile phones, proprietary information such as client or customer lists and intellectual property, security information, keys or access cards or materials until such time as such property is returned by the employee to the employer (although, upon return of the employer's property, the employer must pay the wages being withheld);
  2. as repayment of a loan or advance the employer made to the employee during the course of and within the scope of employment;
  3. to recover a payroll overpayment; and
  4. to compensate the employer for the replacement cost or unpaid balance of the cost of the employer's merchandise, uniforms, company property, equipment, tools of the trade or other materials intentionally purchased by the employee.
However, an employer cannot withhold amounts under these new provisions that cause the wages paid to the employee to be less than the federal or state minimum wage, whichever is applicable.
 
So what can you do to best position your organization to take advantage of these amendments?  The provision that allows for withholding wages from current employees pursuant to a signed written agreement does not put any limit or qualification on the timing of such agreements.  Accordingly, employers would be wise to make every current and new employee enter into a written agreement, to be signed by both parties, stating that the employee agrees that the employer can withhold or deduct wages in the event the employer ever makes a payroll overpayment, makes a loan or advance to the employee, or the employee ever fails to return or pay in full the cost of any employer merchandise or uniform purchased by the employee.  At minimum, employers should require such agreements whenever they make a loan or advance or sell merchandise or uniforms to employees on credit.  Work with an experienced employment lawyer to make sure the agreement is properly drafted to be enforceable, but not unlawfully overbroad.
 
 


Editors
Don Berner Image
Don Berner, the Labor Law, OSHA, & Immigration Law Guy
Boyd Byers Image
Boyd Byers, the General Employment Law Guy
Jason Lacey Image
Jason Lacey, the Employee Benefits Guy
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