labor lawAdivision of labor law center

 A new law will primarily affect larger employers in Kansas.

The state Department of Labor recently introduced regulations that require large employers to file their quarterly unemployment tax contributions online. While online filing has been an option for several years, until recently employers could choose not to use it. Now, it is mandatory.

The Kansas Department of Labor bills the online system as simple, quick and secure, and few employers report problems with it.

“If they’re not doing so already, we want Kansas employers to (more…)

It’s the time of year again where you need to file taxes. Even if you haven’t held a job in 2006 and collected unemployment benefits instead, you are still required to file your state and federal tax returns.

If you’re a Kansas resident and don’t know the exact amount of your unemployment benefits, you don’t need to worry. The unemployment office in Kansas mailed out statements called 1099 statements to all those who collected unemployment benefits in 2006. This was done in January 2007.

Unemployment benefits are taxable income under federal law. Most states also tax unemployment, including Kansas. Even if you had taxes withheld from your unemployment benefits, you’ll still need to file an annual tax return. And, you’ll need to attach a form 1099. This is your only proof of taxes paid.

Many people with Kansas unemployment benefits choose not to have their taxes withheld. If you’re one of these people, this means that you’ve enjoyed the full amount of your benefit checks. But the taxman still wants his money, and you’re required to a pay up.

The 1099 form is identical to the one companies use to report payments to independent contractors. As an unemployment benefit recipient, you’re like an independent contractor because you probably haven’t had taxes withheld from your payments.

Employees receive W-2s instead of 1099s. The W-2 form shows in detail an employee’s deductions and earnings, just as a 1099 form does.

The 1099 statement issued by the Kansas unemployment office shows the amount of your benefits. It also shows any unearned compensation that you’ve been paid. The 1099 form also includes other information such as any deductions you may have had taken from your unemployment benefits. Court-ordered restitution or court-ordered child support are examples of deductions that may have been taken from your unemployment benefits.

Contact your local Kansas Dept. of Labor if you have not received a 1099 form and you received unemployment compensation for any part of 2006.

The state of Kansas did not pass a new minimum wage law in the state this year, and some employers breathed a sigh of relief on that one (though we are all waiting for the news to break in the federal capital of Washington DC that the new minimum wage there has been passed, which would affect many Kansas employers). And employers will also appreciate the news from their state capital that the House there approved an $80 million reduction in the amount of unemployment insurance taxes that employers will have to pay the state system.

The Republican controlled House also rejected a measure by the Democrats in the government that would have taken away the week waiting period that laid off workers now have to wait before their unemployment benefits kick in. If that week had been removed, it would have cost the state unemployment insurance system more money, which means they would have passed on those costs to the employers who pay the taxes that make the system work.

If you remember, it was only a few weeks ago that the Kansas Republicans also beat an attempt by the state Democrats to raise the minimum wage in the state. Currently, the state has the lowest state minimum wage of any in the nation. The Kansas minimum wage is set at $2.65 per hour.

As we discussed back when the Republicans defeated the Kansas minimum wage measure, as it currently stands then local and small employers in the state can pay their employers this lower minimum wage, instead of the higher $5.15 per hour minimum wage that is the current federal requirement. It all goes back to whether or not employers are liable to follow the Fair Labor Standards Act, because if they are, then they are also liable to pay the federal minimum wage.

Under new policies proposed by the Kansas Department of Labor, workers filing for Kansas unemployment payments would no longer have to register with the Kansas Workforce Center.

The plan is somewhat controversial, because a minority of low-skilled workers would still be required to register. Using a number of undisclosed criteria, the Kansas Dept. of Labor would determine which employees are likely to exhaust their unemployment benefits. Those people would be required to register with a Kansas Workforce Center, while others do not.

Critics of the plan argue that since the Kansas Dept. of Labor has not disclosed the registration criteria, it could be used in a discriminatory way. For example, all black or Hispanic applicants for unemployment might be required to register, while others are not.

Nevertheless, the Kansas Department of Labor is currently working to formalize this process in Department regulations. In this proposed new regulation, only those claimants identified as being likely to exhaust benefits and in need of job placement services based on their profile will be required to register for work. Every claimant would still be required to demonstrate that they are able to work and are actively looking for work.

The Kansas Department of Labor noted that many of those who file for Kansas unemployment do not register with a Kansas Workforce Center, even though current law requires them to. In fact, a recent survey completed by the U.S. Dept. of Labor shows that more than 41% of workers eligible for Kansas unemployment do not register. This is a violation of current Kansas law, and those workers are technically committing fraud.

Although the U.S. Dept. of Labor calls that fraud, the state of Kansas disagrees. “We understood the technical overpayment rate would be high based on the registration requirement,” said Secretary of Labor Jim Garner. “But we are taking steps to streamline the process to ensure those most in need of job placement assistance are registering for those services and also continue to focus on our effective efforts of detecting and recovering fraudulent payments.”

Garner points out that many Kansas workers do not have access to the limited number of Kansas Workforce Centers. The online process for registration is cumbersome and time consuming, so the state is opting to eliminate the requirement to register for most – but not all – of the state’s workers.

According to experts at the Kansas Dept. of Labor, the state’s economy is picking up, with an increase in jobs and a decrease in Kansas unemployment.

“There are several signs that employment is improving in Kansas’ manufacturing sector, particularly in aerospace manufacturing,” said Inayat Noormohmad, economist at the Kansas Department of Labor. “Growth in the government sector has been influenced by increased hiring in educational institutions.”

“When looking at a combination of factors, including our jobs report, unemployment data, gross state product and personal income, it’s obvious the Kansas economy continues to improve,” said Jim Garner, Secretary of Labor.

The Kansas unemployment rate was recently reported at 4.1 percent, down from 4.8 percent in November. This represents an improvement over the unemployment rate of 4.9 percent one year ago.

The number of jobs increased, as well. Kansas added 25,800 jobs between November 2006 and December 2006. Most of this monthly change was due to seasonal fluctuations including hiring of seasonal help for the holidays. Both durable and non-durable manufacturing sectors also reported gains as activities in this industry picked up slightly.

Over the past year, Kansas gained approximately 7,600 jobs. Six of 11 industries reported an increase over the year. A large gain was reported in local government, which added approximately 6,000 jobs. This increase was primarily additional staff at schools in the state.

Jobs in the construction industry increased 3.2 percent, leading private sector job growth. Other increases were found in the travel & tourism industry, and in the healthcare industry. Over the year, Kansas added 1,800 jobs in manufacturing. Jobs in aerospace product and parts manufacturing continued a gradual upward trend this year.

While officials at the Dept. of Labor refuse to speculate on the changes in store under the newly elected Democratic governor, the employment picture for now looks rosy in the Sunflower State.