Professional Employment Organizations (PEOs) in the State of Kansas the Employee Leasing Provision:
An employee leasing business, also known as a professional employment organization (PEO), is any independently established business entity which engages in the business of leasing employees to a client. A PEO is in the business of taking over and leasing back to a business its regular employees. An employee leasing business is liable for Kansas's unemployment tax on wages paid by the business to individuals performing services for clients. The PEO-Client relationship is a contractual, co-employment agreement. Therefore, under Kansas law, both entities are liable for the unemployment tax obligations.
The State of Kansas is a client reporting state. This means that the PEO must establish an account for itself and an account for each client it has in the state. The PEO account is known as the “parent account” and each client account will be linked to the parent account. The employee leasing business shall keep separate records and submit separate quarterly unemployment tax and wage reports for each client. The unemployment tax rate of the PEO is shared by all of its clients. Thus, each client’s unemployment tax rate will be the same as the PEO parent.
Important Note: The PEO provision does not include private employment agencies, which provide temporary workers to clients on a temporary help basis provided the private employment agencies are liable as employers for the payment of contributions on wages paid to the temporary workers. Private employment agencies are not included in the definition of a PEO as they do not take over and lease back the employees to businesses. However, if such agency also provides leased employees to a client, the employee-leasing segment of the business would be subject to the employee leasing provisions.
Establishing A New PEO Account:
In order to establish an unemployment tax account in the State of Kansas, the PEO must first start by registering with the Kansas Insurance Commissioner. You can find registration information by following this link https://www.ksinsurance.org/company/peo.php. Please note that no PEO can be established in the State of Kansas unless they have first registered with the Kansas Insurance Commissioner.
Once the PEO appears as a registered PEO on the Kansas Insurance Commissioner’s website, you can then provide a completed Employer Status Report form (K-CNS 010) for the PEO and send it to email@example.com for processing. Your application will be processed and you will be contacted with your account information. The KDOL terms this account the "parent account."
Establishing Client Accounts:
Once you have received your unemployment tax account information for the PEO, you can then complete and send in the Client Status Report form (K-CNS 015) for each client. (Contact firstname.lastname@example.org for a copy of this form.) Once the client account(s) have been established, you will be sent their account information.
For further information, please email email@example.com.