Although “The Sunflower State” follows federal standards for most areas of employment, understanding the specifics of the Kansas minimum wage and the state’s additional wage laws is crucial for employers in Kansas. This includes guidelines for overtime pay, youth employment, and tipped employees.
In today’s post, we will share everything you need to know about the Kansas minimum wage, including rates, exemptions and best practices to ensure compliance with federal and state wage laws.
- U.S. Minimum Wage Framework
- Federal Minimum Wage: Timeline
- Kansas Minimum Wage: Current Rates
- Kansas Minimum Wage: Exemptions
- Will the Kansas Minimum Wage Increase Beyond the Federal Baseline?
- Additional Kansas Wage Laws
- Best Practices for Employer Wage Law Compliance
- What can you do with Factorial’s payroll management software?🚀
U.S. Minimum Wage Framework
Let’s start with the basics: how minimum wage works in the U.S.
The minimum wage in the United States is a complex system with multiple tiers, each set by a different level of government: federal, state, and municipal. This progressive approach aims to ensure that workers across the country receive a fair wage in line with local economic conditions.
Here’s everything you need to know.
Federal Minimum Wage
As the baseline, the federal minimum wage is the lowest hourly rate that employers can legally pay their employees. It is set by the Fair Labor Standards Act (FLSA) and was last raised in 2009 to $7.25 per hour. This rate, which ensures that employers comply with a basic level of compensation regardless of their location or industry, is significantly lower than the median hourly wage of all workers in the United States ($35.00 per hour).
State Minimum Wages
Recognizing regional variations in state economies and the cost of living, there are now many state minimum wage laws that set the threshold higher than the federal rate. These state-level mandates ensure that workers in higher-cost areas receive a wage that reflects their cost of living. For example, the minimum wage is $12.30 per hour in Missouri, $12.00 per hour in Hawaii, and $16.28 per hour in Washington State (the highest rate in the country).
Municipal Minimum Wages
To further address regional economic realities, some cities and counties have implemented local minimum wage mandates that are higher than both federal and state rates. This approach ensures that workers in urban centers, where the cost of living is often higher, receive a wage that reflects their specific economic environment.
Industry Minimum Wages
Finally, in addition to regional differences, the minimum wage can also vary based on industry. For example, the minimum wage for tipped workers is typically lower than the minimum wage for non-tipped employees. This is because many states expect tipped workers to receive a significant portion of their income from tips. However, in some states, employers are required to make up the difference if the employee’s hourly wage plus tips does not equal at least the minimum wage.
Federal Minimum Wage: Timeline
Before we explore the Kansas minimum wage, let’s take a look at a timeline of the federal minimum wage to help us understand its evolution and impact on the state’s wage laws.
Federal minimum wage: key milestones:
- 1938. The FLSA establishes the first federal minimum wage of $0.25 per hour. This provides workers with a baseline income and lays the groundwork for future labor standards.
- 1950. The federal minimum wage increases to $0.75 per hour, expanding coverage to air transport industry workers. This increase is a reflection of post-war economic growth and an improvement in living standards.
- 1966. The federal minimum wage increases to $1.40 per hour. This increase ensures wages keep up with productivity and the cost of living, reducing poverty significantly. Coverage is extended to public schools, nursing homes, laundries, and the construction industry
- 1981. The federal minimum increases to $3.35 per hour and remains unchanged for almost a decade. This wage stagnation leads to an increase in income inequality.
- 1989. Changes to the law require businesses that make $500,000 or more per year to follow minimum wage rules, and the federal minimum wage is increased to $3.80 per hour.
- 1997. The federal minimum wage increases to $5.15 per hour during the Clinton administration. This raise is part of a series of increases aimed at boosting the income of low-wage workers. However, even though it provides a significant boost in nominal wages, it still lags behind inflation and cost of living increases.
- 2007-2009. The federal minimum wage increases in three stages reaching $7.25 per hour by 2009, where it has remained until now despite rising living costs. This is the longest period in U.S. history without an increase. There are currently no plans to increase the federal minimum wage.
Kansas Minimum Wage: Current Rates
Let’s get to the heart of it now: what is the minimum wage in Kansas?
As of 2024, the Kansas minimum wage is $7.25 per hour, which is the same as the federal minimum wage. Kansas has had this minimum wage since 2010. This rate was established following the federal minimum wage increase on July 24, 2009. Kansas aligned its state minimum wage with this federal standard the following year and has not raised it since.
Is Kansas the only state to align with the federal minimum rate?
No. In fact, twenty states currently use the federal minimum wage of $7.25 including Alabama, Georgia, Indiana, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Texas, Wisconsin, Oklahoma, and Utah.
Does this rate apply to all workers in Kansas?
The Kansas minimum wage applies to most workers in the state unless they are exempt under federal or state laws.
Specifically, Kansas employers must offer the following minimum hourly wage:
- $7.25 per hour. This is the federal minimum wage, and it applies to most workers in Kansas. This rate has been in effect since 2010 and there are currently no official plans to increase it from the federal baseline any time soon.
- $2.13 an hour. This rate typically applies to workers who earn tips, such as servers. Under Kansas law, employers can pay tipped employees a lower cash wage as long as the sum of the cash wage and tips received is at least equal to the federal minimum wage of $7.25 per hour (a “tip credit” of up to $5.12 per hour). If the combined amount of the tips and the cash wage does not equal at least $7.25 per hour, the employer must make up the difference.
Kansas Minimum Wage: Exemptions
Since Kansas does not have a state-specific minimum wage and follows the federal minimum wage of $7.25 per hour, the exemptions to the Kansas minimum wage are essentially the same as those outlined under federal law.
Here’s an overview of these exemptions:
- Tipped employees. As we just saw, you can pay tipped employees a reduced rate of $2.13 per hour if their tips bring their total earnings to at least $7.25 per hour. If they don’t, then you must cover the tip credit deficit.
- Student workers. You can pay full-time college or high school students 85% of the Kansas minimum wage ($6.16 per hour) provided those students are enrolled in a work-study program or work 20 hours (or less) per week.
- New workers. In line with federal minimum wage requirements, you can pay employees under 20 a reduced rate of $4.25 per hour during the first 90 days of employment. After 90 days, you must pay them the full Kansas minimum wage.
- Federal contractors. You must pay federal contractor employees a minimum wage of $17.20, effective January 1, 2024.
- Employees with disabilities. You can pay employees with a disability a lower rate provided you obtain a certificate from the U.S. Department of Labor.
Will the Kansas Minimum Wage Increase Beyond the Federal Baseline?
As of 2024, Kansas continues to adhere to the federal minimum wage of $7.25 per hour, a rate that has remained unchanged since 2010. However, there is growing momentum in the state to raise the minimum wage above the federal baseline, as various proposals have been introduced in the Kansas legislature. One prominent proposal suggests incrementally increasing the minimum wage to $10 per hour by 2025, with further increases each year until it reaches $16 per hour by 2027.
This push for a higher minimum wage reflects a broader national trend aimed at improving the living standards of low-wage workers. Supporters argue that the current wage is insufficient to meet the rising cost of living, especially for families. On the other hand, opponents express concerns that a significant wage hike could burden small businesses, potentially leading to reduced hours, layoffs, or increased prices.
Despite these discussions, no legislative changes have been finalized yet. The debate is ongoing, with stakeholders from various sectors weighing in on the potential impacts. If passed, the proposed increases would mark a significant shift from Kansas’s long-standing alignment with the federal minimum wage, potentially setting a new standard for worker compensation in the state.
Additional Kansas Wage Laws
Aside from the Kansas minimum wage, the state has a number of additional wage laws that employers need to understand as these can have an impact on an employee’s wages.
Let’s explore these Kansas wage laws in a bit more detail so you can make sure your employee handbook meets all requirements.
Overtime Pay
Kansas follows federal overtime pay laws under the Fair Labor Standards Act (FLSA). This means that you must offer eligible employees overtime pay if they work beyond their contracted hours.
To determine if an employee is eligible or exempt, you first need to determine what their FLSA status is.
Consider the following:
- Salary level. Are you paying the employee more than $43,888 per year?
- Salary basis. Do you offer them a guaranteed minimum compensation amount, regardless of the hours they work?
- Duties. Have you contracted them to perform an exempt job duty? (Professional duties that require specialized education; executive duties such as supervising a team; or administrative duties that require the use of discretion and judgment)
If an employee meets any of the above criteria, then they are considered exempt from the FLSA, and you have no obligation to pay them overtime. However, if your employees are non-exempt (they do not meet any of the above criteria) then you must follow the FLSA’s overtime rules. Essentially this means that you must offer them overtime pay for any hours worked over 40 in a workweek at a rate not less than time and a half.
Wage Payments & Deductions
In Kansas, employers must pay employees at least once a month (weekly, semi-monthly or biweekly). If an employee leaves or is fired, they should receive their final paycheck by the next regular payday. Employers can only deduct certain amounts from wages, like taxes or agreed-upon expenses (e.g., insurance). Unauthorized deductions are not allowed, ensuring employees get their full pay.
For more details, check out the Kansas Department of Labor.
Youth Employment
In Kansas, youth employment is regulated to protect young workers. Minors aged 14 and 15 can work outside school hours in non-hazardous jobs, with limits on the number of hours they can work each day and week. For those aged 16 and 17, the rules are less restrictive, but hazardous work is still prohibited.
In addition, children under 16 can work between 7 a.m. and 7 p.m., except from June 1 through Labor Day, when evening hours are extended to 9 p.m. If the employer is not covered by the Fair Labor Standards Act, the hours are 7 a.m. to 10 p.m. when school is in session.
These requirements align closely with federal child labor laws but certain industries in Kansas, like agriculture, may have additional guidelines, such as limitations on operating heavy machinery or working in specific environments, to ensure the safety of young workers.
Time-Tracking and Recordkeeping
Finally, time-tracking and recordkeeping laws in Kansas generally follow federal requirements under the Fair Labor Standards Act (FLSA). Specifically, employers must maintain detailed and accurate records of each employee’s work hours, wages, and other employment-related information. These records must be retained for a minimum of three years.
Key information that employers must store include:
- Employee information. Personal details such as name, address, and Social Security number.
- Work hours. Exact hours worked each day and total hours worked each week.
- Wages. Records of total earnings, wage rates, and any deductions made from wages.
Accurate recordkeeping is essential not only for compliance with labor laws but also for protecting both employers and employees in the event of disputes over wages or working hours. Failure to maintain proper records can result in legal consequences and financial penalties.
Best Practices for Employer Wage Law Compliance
And that’s pretty much everything you need to know about the Kansas minimum wage and the state’s additional wage laws. All that’s left now is to make sure that your business meets the legal requirements of these laws.
With this in mind, we’ve put together a handy list of essential tips and best practices to help you protect your business from potential non-compliance fines and penalties:
- Stay informed on legal changes. Regularly review updates to state and federal wage laws to ensure your business stays compliant.
- Monitor working hours. Track and calculate employee working hours and make sure you pay non-exempt employees overtime pay if they work beyond 40 hours in a week. Factorial’s time management feature enables real-time monitoring of working hours, including overtime. This allows you to maintain and generate accurate records and reports and identify and address any issues promptly, ensuring compliance with overtime and time-tracking requirements.
- Maintain detailed records. Keep comprehensive records of all hours worked, wages paid, and deductions for at least three years. Factorial’s HRIS automates recordkeeping, storing all data in a centralized digital format for easy access and compliance with record retention laws.
- Conduct regular audits. Periodically audit your payroll and time-tracking systems to catch and correct any discrepancies early. The same goes for your employee records.
- Implement an effective payroll system. Finally, ensure compliance with the Kansas minimum wage by regularly updating your payroll systems. Factorial’s payroll software automatically updates wage rates, ensuring compliance and reducing underpayment risks. What’s more, our payroll software integrates seamlessly with our time-tracking and scheduling features, making it easy to monitor employee hours, manage overtime, and schedule breaks. This comprehensive approach helps you maintain accurate records and adhere to all relevant wage laws, protecting your business from legal issues and ensuring the fair treatment of your employees.
