Short answer: In Kansas it depends on payroll, not how many people you employ. You need coverage once your total gross annual payroll tops $20,000, counting last year and your reasonable estimate for this year. Wages paid to family members don't count. Agriculture is exempt, and knowingly going without required coverage can cost twice the annual premium or $25,000, whichever is greater.
A dollar test instead of a headcount
Kansas asks how much you pay, not how many you employ. Under K.S.A. 44-505, the Workers Compensation Act applies to all employment in the state except:
| Exception | What it covers |
|---|---|
| Agriculture | Agricultural pursuits and employment incident to them (state agencies excepted) |
| Small payroll, established employer | Total gross payroll was $20,000 or less in the prior calendar year and you reasonably expect $20,000 or less this year |
| Small payroll, new employer | No payroll history yet, and you reasonably expect $20,000 or less this year |
| Certain volunteer firefighters | Members of a relief association that filed an election to exclude them |
| Qualified real estate agents | Licensed salespeople paid on output under a written independent-contractor contract |
In both payroll tests, wages paid to an employee who is a family member by marriage or blood are left out of the total.
How the $20,000 test plays out
A few practical points:
- It's an all-employee total. Two part-timers at $11,000 each put you over.
- Both years matter. Last year under $20,000 doesn't help if you reasonably expect to exceed it this year.
- Growth sneaks up. Bind coverage before the payroll that pushes you over.
Exempt employers can opt in
Being under the threshold doesn't lock you out. K.S.A. 44-505(b) lets an exempt employer come under the act by filing a written statement of election with the director, or by joining a qualified group-funded workers' compensation pool. The election stays in force until you file a withdrawal.
Three ways to secure coverage
K.S.A. 44-532(b) lists them:
- A policy with an insurance carrier authorized to write workers' comp in Kansas.
- Self-insurance, with proof of financial ability to pay claims.
- Membership in a qualified group-funded pool.
The statute adds that the employer, not the employee, pays the cost.
Shareholders who want out
Under K.S.A. 44-543, an employee who owns 10% or more of the corporation's outstanding stock may file a written declaration with the director, before any injury, electing not to be covered. A duplicate goes to the employer. The election lasts only for that person's employment with that employer.
Penalties for knowingly going without
Kansas treats intentional noncompliance seriously:
- Criminal: knowing and intentional failure to secure required coverage is a class A misdemeanor (K.S.A. 44-532(c)).
- Civil: after a hearing, the employer can owe the state twice the annual premium it would have paid, or $25,000, whichever is greater (K.S.A. 44-532(d)).
One carve-out: the director won't fine a self-employed subcontractor for failing to cover only themselves. The rules still apply to any employees the sub has.
When an uninsured employer can't pay
K.S.A. 44-532a creates a backstop. If an employer has no insurance or inadequate self-insurance security, and can't pay or can't be found, an injured worker can apply to have benefits, including medical, paid from the state's Workers Compensation Fund. The fund can then sue the employer to recover what it paid.
Kansas examples
A bakery with one full-time employee earning $32,000. Payroll is over $20,000, so coverage is required.
A landscaper paying two seasonal helpers $8,000 each. $16,000 total, expected to stay there. That's exempt, though electing coverage may be smart.
A family restaurant where the only employees are the owner's spouse and son. Family wages don't count toward the $20,000.
A wheat farm with three hired hands. Agricultural employment is exempt regardless of payroll.
Bottom line
Run the $20,000 test on last year's and this year's payroll, leave out family wages, and set up coverage before you cross the line. See our workers' compensation insurance guide.
Want a quote? Contact Alishahi Insurance or call (877) 711-4545. More on insurance in Kansas.
Frequently asked questions
Is workers' comp required in Kansas?
Yes, for most employers whose total gross annual payroll exceeds $20,000, based on last year and a reasonable estimate for this year.
Do family members count toward the Kansas $20,000 payroll test?
No. Wages paid to family members by marriage or blood are excluded.
Are Kansas farms required to carry workers' comp?
No. Agricultural employment is exempt, though farms can elect coverage.
Can a business owner opt out of workers' comp in Kansas?
An employee who owns 10% or more of a corporation's stock can file a written election not to be covered.
What is the penalty for no workers' comp in Kansas?
Knowing failure is a class A misdemeanor, and the civil penalty is twice the annual premium or $25,000, whichever is greater.
Alishahi Insurance · 439 N Canon Dr, Penthouse, Beverly Hills, CA 90210 · (877) 711-4545 · CA License #4348151. General information only. This isn't legal, tax or financial advice or a coverage determination. Coverage depends on policy language and underwriting, and rules vary by state.