Kansas Employment Law Blog Photo
Fraudsters Target Kansas Unemployment Benefits
By: Nancy Musick

Before 2020, the record for most fraudulent unemployment claims filed in a year in Kansas was seven. That record has been shattered. This year the Kansas Department of Labor (KDOL) has already uncovered more than 45,000 fraudulent unemployment claims. And we still have three months to go!

The scheme primarily targeted expanded unemployment programs created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act in the wake of the COVID-19 pandemic. The CARES Act expanded unemployment benefits to people traditionally unable to qualify, such as the self-employed and independent contractors. The fraudulent scheme has caused significant payment delays to Kansas families.

Fraudsters used victims’ personal information to file for unemployment benefits. According to the U.S. Department of Justice, most victims had their information exposed in a mass data breach. Other victims were victims of prior identity theft. Many victims did not learn of the fraud until the KDOL denied their claims as duplicative. The KDOL also discovered fraudulent claims after employers confronted employees for filing an unemployment claim while still being employed.

Kansas isn’t unique in this regard, as a nationwide investigation uncovered similar attacks in other states. The U.S. Department of Labor estimates fraudsters have filed $8 billion in fraudulent unemployment claims so far this year in the United States.

It is important that employers pay attention to each unemployment claim to curb additional fraud. Employers can report suspected unemployment fraud at www.reportfraud.ks.gov.

An Employee by Any Other Name: Nail Technicians Misclassified a Independent Contractors
By: Travis Hanson

Recently, the Kansas Court of Appeals affirmed the district court and the Kansas Department of Labor’s (KDOL) finding that nail technicians at a salon were employees rather than independent contractors for unemployment-tax contribution purposes. This case has important tips for handling classification issues in any industry.

Review of the Record
In 2014, Leander and Hongmin (Amy) Fisher began doing business as Amy’s Spa Services, LLC (the Spa). The Spa classified all of its nail technicians as independent contractors. The KDOL audited the business to determine whether the Spa properly classified the technicians for unemployment-tax withholdings. For unemployment-tax contributions in Kansas, an individual is an employee if the employer has the right to control the manner and means of the work performed; whether the employer exercises that right is inconsequential.
The auditor reviewed the Spa’s independent contractor agreement, interviewed three nail technicians and Leander Fisher, and reviewed some of the Spa’s financial documents. The auditor’s review of the independent contractor agreement stated that the parties intended to form an independent contractor relationship. Under the agreement, the Spa purported to require the technicians to clean their workstations, supply the tools necessary to complete their jobs, and gave the technicians discretion to set their own prices, as long as they did not undermine the Spa’s prices. The agreement also provided that the Spa would receive all payments that were later distributed to the technicians, and that      Continue Reading...
New Kansas Unemployment Law Does Not Apply to Old Cases

The Kansas Court of Appeals has ruled that the 2013 amendments to the Kansas Employment Security Act apply only prospectively. In other words, unemployment claims should be decided based on the law in place at the time the claim arose, not the law in effect at the time the case was actually decided.

Katlin Gable worked as a secretary for a small trucking company. She shared a workspace with Thomas Blake, the company’s owner, in a bedroom-turned-office in his home. She quit after he began watching a pornographic video immediately next to her and offered her women’s excitement pills. Although she didn’t confront him at the time, she later told Blake over the phone that she was resigning and that he had crossed the line, making her very uncomfortable.
Gable filed for unemployment benefits. Her claim was denied because she didn’t report the misconduct to her boss and was therefore found to have left work without good cause. She challenged that decision through the appeals process and eventually ended up before the Kansas Court of Appeals.
There was no question that Gable left work because of unwelcome harassment. The only issue was whether she was required to report the harassment to Blake before resigning to qualify for unemployment benefits.
Gable quit her job and filed for benefits before the 2013 amendments to the unemployment law went into effect. In determining which law to apply, the court held that the amendments did not apply retroactively, so the law in effect when Gable left her employment      Continue Reading...
Talkin' Baseball and Unemployment
By: Boyd Byers

July 1 marks the midway point of the Major League Baseball season. July 1 is also the day significant changes to the Kansas unemployment law take effect. These amendments are mostly favorable to employers. Among other things, the changes make it more difficult for employees to qualify for benefits when they are fired for attendance, drug or alcohol use, or violating a workplace rule or policy. It’s also now harder for employees to obtain benefits when they voluntarily quit. Foulston Siefkin lawyer Forrest Rhodes wrote a great baseball-themed article about the unemployment law amendments and how they “level the playing field.” We are sharing it with our blog readers below.

Amendments Help to Level the Unemployment Playing Field

By Forrest Rhodes
Few situations drive an HR professional crazier than terminating an employee for legitimate policy violations and then seeing the employee get awarded unemployment benefits.  Whether driven by the volume of benefits paid out over the last several years or perhaps simply to level the playing field, in April 2013 the Kansas Legislature made numerous amendments to the employment security (more commonly known as unemployment) laws that should help to reduce how often benefits are paid in these situations. 
The amendments, which take effect on July 1, 2013, are largely favorable to employers.  In several situations the amendments ease the standard required to      Continue Reading...
Lawmakers Propose Unemployment Changes
By: Boyd Byers

Kansas lawmakers continue to consider changes to the employment security ("unemployment") statutes. This week the House passed Substitute House Bill 2105 on a vote of 88-35. The bill would amend Kansas unemployment law in several ways:

  • Revises the definition of “part-time employment,” “good cause,” and “misconduct,” and includes further restrictions for alcohol and drug abuse on the job;
  • Authorizes the Secretary of Labor to hire special investigators relating to UI fraud, tax evasion, and identity theft;
  • Increases  the taxable wage base for contributions made by employers from $8,000 to $16,000 starting Jan. 1, 2015;
  • Reduces the contribution rate for certain employers when the UI (unemployment insurance) Trust Fund reaches an acceptable level;
  • Revises the surcharge rate for the 20 negative balance employer groups and requires the Secretary of Labor to notify employers by November 30 of their UI contribution rate for the coming year; and
  • Abolishes the State Employment Security Advisory Council.

After passing the House, the bill was referred to the Senate Committee on Commerce. 

Kansas Legislative Update
By: Boyd Byers

The 2013 Kansas legislative session is now in full swing. Lawmakers have introduced several employment-related bills.

House Bill 2022 -- Expands the number and types of deductions that employers may withhold from an employee's wages, contingent on a written agreement between the parties. Also expands an employer's ability to withhold wages when an employee leaves. However, such withholding cannot reduce the employee's wages below the federal or state minimum wage law.

Senate Bill 53 / House Bill 2092 -- Specifies what social media information an employer can and cannot ask an applicant or employee to divulge.

Senate Bill 48 -- Requires that, starting January 1, 2014, all governmental units and contractors involved in a public contract of $50,000 must use e-verify for verification of employment status of all employees whose employment begin on or after January 1, 2014. Grants the Secretary of Labor authority to establish rules and regulations and impose restrictions on violations of the act.

House Bill 2105 -- Incorporates numerous amendments to the employment security law, such as revising the circumstances when an individual can be disqualified for benefits; redefining "gross misconduct" involving the use of alcohol or controlled substances; and imposing penalties for unlawfully receiving benefits.

Kansas Employment Law Blog will keep you up to date on the progress of these bills and other significant legislative developments.

The Worst Boss Ever?
By: Boyd Byers

You’ve heard stories about bad bosses. And you’ve heard stories about workplace wagers.  But have you heard the one about the boss who held a contest in which all employees were asked to predict which of them would be the next one fired, with a cash prize awarded to the winner?

The boss, who owns a convenience store chain, outlined the rules of the game in a memo sent to all employees. It said:

New Contest – Guess The Next Cashier Who Will Be Fired!!! 
To win our game, write on a piece of paper the name of the next cashier you believe will be fired. Write their name [the person who will be fired], today’s date, today’s time, and your name.  Seal it in an envelope and give it to the manager to put in my envelope.
Here’s how the game will work:  We are doubling our secret-shopper efforts, and your store will be visited during the day and at night several times a week.  Secret shoppers will be looking for cashiers wearing a hat, talking on a cell phone, not wearing a QC Mart shirt, having someone hanging around/behind the counter, and/or a personal car parked by the pumps after 7 p.m., among other things.
If the name in your envelope has the right answer, you will win $10 CASH.  Only one winner per firing      Continue Reading...

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
Additional Sources
Subscribe to Kansas Employment Law Letter Image
Subscribe to Kansas Legislative Insights Image