See Dick and Jane Work: a Kansas Wage Payment Act Primer

Publication year2003
Kansas Bar Journals
Volume 72.

72 J. Kan. Bar Assn. 9, 14-29 (2003). See Dick and Jane Work: A Kansas Wage Payment Act Primer

Kansas Bar Journal
72 J. Kan. Bar Assn. 9, 14-29 (2003)

See Dick and Jane Work: A Kansas Wage Payment Act Primer

By Boyd A. Byers and Carolyn L. Rumfelt

See Dick. See Dick work. Work, Dick, work. Dick is clumsy. Oops! Dick broke a plate. Dick is not good at counting money either. Oh, no. Dick's cash register is short. Dick's boss takes the cost of the broken plate and the cash shortage out of Dick's paycheck. See Dick sue. Sue, Dick, sue. See Jane. See Jane work. Work, Jane, work. Jane works in sales. See Jane quit. Jane wants to be paid for her sales commissions and unused vacation time. Jane's boss won't pay Jane commissions for unfunded sales or money for unused vacation time. See Jane sue. Sue, Jane, sue.

I. Introduction

The Kansas Wage Payment Act (KWPA or the Act),[1] as its name implies, controls many important aspects of the payment of wages and benefits to Kansas employees. The Act addresses numerous wage payment issues not covered by the federal Fair Labor Standards Act (FLSA)[2] or the Kansas minimum wage and maximum hours law,[3] which govern minimum wage and overtime compensation. The Act, for example, regulates when wages must be paid, the manner in which they must be paid, and the circumstances in which wages can be withheld.[4] It also imposes certain notice requirements on employers with respect to the payment of wages and provision of benefits.[5] Finally, the Act prescribes remedies and penalties for violations[6] and provides an enforcement scheme.[7]

The Act is a concise body of law set forth in the Kansas statutes and corresponding administrative regulations.[8] Unlike the FLSA, it is fairly straightforward. Notwithstanding its broad application and relative simplicity, the Act's requirements are often overlooked or misunderstood by employers and employees alike.[9] Perhaps the most problematic areas under the Act involve the circumstances under which wages can be withheld[10] and the principle that earned wages, including benefits, bonuses, and commissions, cannot be forfeited by subsequent acts.[11] This article, designed as a resource for the practicing lawyer, provides a comprehensive discussion of the Act, together with the regulations and case law interpreting it.[12]

II. Legislative History of the Act

The Act is a product of the 1973 legislative session.[13] While Kansas legislative history is often sketchy, in this case minutes from committee meetings reflect a desire by legislators to protect low-income workers from the abuses of employers.[14] Written testimony submitted by a Kansas Department of Labor (KDOL) official reported that the Act was based on model legislation developed by the Council of State Governments, a national organization of state legislators.[15] In an effort to emphasize the Act's necessity, the testimony identified Kansas as one of 10 states yet to enact a wage-protection measure.[16]

The Act sought to address problems experienced primarily by employees of small businesses. The KDOL reported that Kansas had more than 41,000 employers with fewer than 20 employees in 1973, and more than 40 percent of all Kansas workers were not covered by the FLSA or minimum wage laws.[17] Of the 758,600 nonagricultural Kansas workers, only 124,000 were covered by collective bargaining agreements.[18]

The central principle guiding the Act's passage was that "employees be paid their earned wages, in full, in money, and without delay."[19] In 1973, the KDOL estimated it received 400 complaints annually from employees who were shorted pay owed to them. The KDOL asserted that employers often deducted or withheld the earnings of an employee because of bounced checks or bad credit cards that were attributed to the employee's work time. Such withholdings shifted a substantial portion of the business burden to employees, making the docking of pay analogous to a wage garnishment benefiting the employer. Without legislation, judicial remedies were nearly impossible for short-changed employees. In particular, the KDOL indicted some Kansas employers as believing "the absence of any statutory constraints to be an invitation to withhold wages earned, earned vacation, and contributions to pension and welfare funds and to manipulate employees through misleading statements of the offered terms and conditions of employment and the creation of onerous or competitive working environment in low paid jobs."[20] Little opposition to the Act is found in the available legislative history, and Gov. Robert Docking signed the bill in April 1973.

III. Coverage of the Act

The Act applies to any "employer," which is defined as:

any individual, partnership, association, joint stock company, trust, corporation, limited liability company or other organization, the administrator or executor of the estate of a deceased individual, or the receiver, trustee, or successor of any of the same, the state of Kansas or any department, agency or authority of the state, any city, county, school district or other political subdivision, municipality or public corporation and any instrumentality thereof, employing any person.[21]

In addition to those listed in the definition of employer, an officer or agent of a corporation, or any officer, manager, major shareholder, or other person who has charge of the affairs of an employer, who knowingly permits the corporation to engage in a violation of the Act is liable as an employer in claims against the corporation for nonpayment of wages.[22]

The Act defines an employee as "any person allowed or permitted to work by an employer."[23] Independent contractors are not employees under the Act.[24] A worker is an independent

contractor if he or she is defined as such by the rules, regulations, and interpretations of the U.S. Secretary of Labor for purposes of the FLSA.[25] In classifying an individual as an employee or an independent contractor under the FLSA, a court will consider the economic realities of the employment relationship, focusing on whether the worker is economically dependent on the business to which he renders service or whether the worker, as a matter of economic fact, is in business for himself.[26] In applying the economic reality test, factors considered include: (1) the degree of control exerted by the alleged employer over the worker, (2) the worker's opportunity for profit or loss, (3) the worker's investment in the business, (4) the permanence of the working relationship, (5) the degree of skill required to perform the work, and (6) the extent to which the work is an integral part of the alleged employer's business.[27]

Employers and employees may not agree to waive any rights created by the Act, and any provision in an employment agreement that violates the Act is unenforceable.[28] Thus, parties to an employment relationship may not redefine the term "employee" or otherwise contract around the Act's requirements. For example, an employment contract provision allowing an employer to withhold an employee salesperson's earned commission as liquidated damages for the employee terminating his employment contravenes the Act and is unenforceable.[29]

IV. Payment of Wages

A.Wages defined

The Act governs the payment of "wages," which are "compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission, or other basis," minus any authorized withholdings and deductions.[30] The Kansas Administrative Regulations implementing the Act (regulations) explain that compensation determined on an "other basis" includes all compensation for services agreed upon by the employer and the employee, if the employee has met all the conditions required to be eligible for that compensation.[31] This agreed upon compensation may include profit sharing and fringe benefits, such as vacation pay and retirement plans. Tips for services performed are also "wages" within the meaning of the statute.[32]

B.Wage payment requirements

1. Pay periods

Employers must pay their employees "all wages due" at least once each calendar month, on regular paydays designated in advance.[33] The regular payday cannot be more than 15 days after the end of the pay period, unless a variance is authorized by state or federal law.[34] Employers must pay employees their wages in cash, by check, or, with the written consent of the employee, by electronic deposit to the employee's account at a financial institution.[35]

2. Separation prior to payday

When an employer discharges an employee or an employee quits or resigns, the employer must pay the employee's earned wages no later than the next regular payday the employee would have been paid if still employed. This payment must be through the regular pay channels or, if the employee requests payment by mail, by mail postmarked within the deadline.[36] Employees sometimes misunderstand this requirement and demand immediate payment when they are discharged. This confusion may stem from the fact that a number of other states, unlike Kansas, require expedited payment of wages upon termination of employment.[37]

3. Payment of undisputed wages

When there is a dispute over the amount of wages due to an employee, the employer must pay all of the wages it concedes are due. This payment must be made without conditions and no later than the next regular payday following the concession. The employee retains all available remedies as to any balance claimed.38 Unless there is a "binding settlement agreement," an employee's acceptance of partial payment of wages does not release his claim to the balance of the wages.39 An employer cannot require a release as a condition to payment,40 and the Kansas Supreme Court has found an employer's release on the back of a check to an employee for partial...

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