Big changes to Kansas Wage Payment Act take effect July 1

by Boyd Byers and Lindsey Smith

Significant revisions to the Kansas Wage Payment Act (KWPA) go into effect July 1, changes that give employers more latitude to make payroll deductions to recoup overpayments, loans, and property provided to employees.

Under old law, employers could withhold wages only in limited circumstances, such as (1) when specifically required by law (withholdings for payroll taxes or garnishments, for example), (2) for health care, (3) deposits into a retirement plan, and (4) when the employer had a signed authorization from the employee for a lawful purpose “accruing to the employee’s benefit.”

The KWPA amendments greatly expand the circumstances under which employers may make payroll withholdings or deductions. First, upon a signed written agreement between an employer and an employee, the employer may deduct or withhold the 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 you for the replacement cost or unpaid balance of the cost of the employer’s merchandise or uniforms purchased by the employee.

Also, upon providing a written notice and explanation to the employee (even if there is no written agreement), the employer may deduct from or withhold the employee’s final wages (i.e., after separation from employment) for the following purposes:

1. To recover the employer’s property provided to the employee in the course of its 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, and keys or access cards until the employee returns the property to the employer (upon return of the 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 its merchandise, uniforms, property, equipment, tools of the trade, or other materials intentionally purchased by the employee.

Employers can’t withhold amounts that cause the wages paid to the employee to be less than the federal or state minimum wage, whichever is applicable.

Even though the changes provide employers more rights, care must be taken with respect to the federal Fair Labor Standards Act. That’s especially true for exempt employees, who generally must be paid their full salary for any week in which they perform any work.

The new changes to the KPWA were covered in more detail in the June issue of Kansas Employment Law Letter.

Boyd Byers and Lindsey Smith are attorneys with Foulston Siefkin LLP in Wichita. Byers can be reached at 316-291-9716 or bbyers@foulston.com. Smith can be reached at 316-291-9591 or lsmith@foulston.com.