KS
Kansas House Bill HB2092

Kansas 2025-2026 Regular Session

Kansas House Bill HB2092 Compare Versions

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1+Session of 2025
12 HOUSE BILL No. 2092
2-AN ACT concerning labor and employment; relating to professional employer
3-organizations; providing that registrations of such organizations with the secretary of
4-state shall expire on October 15 following issuance; providing an exception
5-therefrom for registrations issued on or after January 1, 2025, that shall expire on
6-October 15, 2026; making the time for filing annual audits by such organizations
7-coincide with the time of renewing of registrations; limiting the means of providing
8-surety by a professional employer organization with insufficient working capital to
9-the provision of a bond and eliminating the market value measure of the sufficiency
10-of such bond; amending K.S.A. 2024 Supp. 44-1704 and 44-1706 and repealing the
11-existing sections.
3+By Committee on Commerce, Labor and Economic Development
4+Requested by Clay Barker on behalf of the Office of the Secretary of State
5+1-24
6+AN ACT concerning labor and employment; relating to professional
7+employer organizations; providing that registrations of such
8+organizations with the secretary of state shall expire on October 15
9+following issuance; providing an exception therefrom for registrations
10+issued on or after January 1, 2025, that shall expire on October 15,
11+2026; making the time for filing annual audits by such organizations
12+coincide with the time of renewing of registrations; limiting the means
13+of providing surety by a professional employer organization with
14+insufficient working capital to the provision of a bond and eliminating
15+the market value measure of the sufficiency of such bond; amending
16+K.S.A. 2024 Supp. 44-1704 and 44-1706 and repealing the existing
17+sections.
1218 Be it enacted by the Legislature of the State of Kansas:
13-Section 1. K.S.A. 2024 Supp. 44-1704 is hereby amended to read
14-as follows: 44-1704. (a) A person engaged in the business of providing
15-professional employer services pursuant to co-employment
16-relationships in which all or a majority of the employees of a client are
17-covered employees shall be registered pursuant to this section.
18-(b) A person who is not registered pursuant to this section shall
19-not offer or provide professional employer services in this state, and
20-shall not use the names PEO, professional employer organization, staff
21-leasing company, employee leasing company, administrative employer
22-or any other name or title representing professional employer services.
23-(c) Each applicant for registration shall submit an application to
24-the secretary in such form and manner as prescribed by the secretary.
25-The application shall contain the following information:
19+Section 1. K.S.A. 2024 Supp. 44-1704 is hereby amended to read as
20+follows: 44-1704. (a) A person engaged in the business of providing
21+professional employer services pursuant to co-employment relationships in
22+which all or a majority of the employees of a client are covered employees
23+shall be registered pursuant to this section.
24+(b) A person who is not registered pursuant to this section shall not
25+offer or provide professional employer services in this state, and shall not
26+use the names PEO, professional employer organization, staff leasing
27+company, employee leasing company, administrative employer or any
28+other name or title representing professional employer services.
29+(c) Each applicant for registration shall submit an application to the
30+secretary in such form and manner as prescribed by the secretary. The
31+application shall contain the following information:
2632 (1) The name or names under which the professional employer
2733 organization conducts business;
28-(2) the address of the principal place of business of the
29-professional employer organization, and the address of each office the
30-professional employer organization maintains in this state;
34+(2) the address of the principal place of business of the professional
35+employer organization, and the address of each office the professional
36+employer organization maintains in this state;
3137 (3) the professional employer organization's taxpayer or employer
3238 identification number;
33-(4) a list, by jurisdiction, of each name under which the
34-professional employer organization has operated in the preceding five
35-years, including any alternative names, names of predecessors and, if
36-known, successor business entities;
37-(5) a statement of ownership that shall include the name and
38-evidence of the business experience of any person that, individually, or
39-acting in concert with one or more other persons, owns or controls,
40-directly or indirectly, 15% or more of the equity interest of the
41-professional employer organization;
39+(4) a list, by jurisdiction, of each name under which the professional
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75+employer organization has operated in the preceding five years, including
76+any alternative names, names of predecessors and, if known, successor
77+business entities;
78+(5) a statement of ownership that shall include the name and evidence
79+of the business experience of any person that, individually, or acting in
80+concert with one or more other persons, owns or controls, directly or
81+indirectly, 15% or more of the equity interest of the professional employer
82+organization;
4283 (6) a statement of management that shall include the name and
4384 evidence of the business experience of any individual who serves as
44-president, chief executive officer or otherwise has the authority to act
45-as senior executive officer of the professional employer organization;
46-and
85+president, chief executive officer or otherwise has the authority to act as
86+senior executive officer of the professional employer organization; and
4787 (7) a financial statement setting forth the financial condition of the
4888 professional employer organization or professional employer group that
4989 shall comply with the provisions of subsection (h).
50-(d) Each professional employer organization not operating within
51-this state as of the effective date of this act shall complete its initial
52-registration prior to initiating operations within this state. If a
53-professional employer organization not registered in this state becomes
54-aware that an existing client, not based in this state, has employees and
55-operations in this state, the professional employer organization shall
56-either decline to provide professional employer services for those
57-employees, or notify the secretary within five business days of the
58-professional employer organization's knowledge of this fact and file a
59-limited registration application pursuant to subsection (g), or a full
60-registration if there are more than 50 covered employees employed by
61-such client. The secretary may issue an interim operating permit for the
62-period of time the application is pending if the professional employer
63-organization is currently registered or licensed by another state and the
64-secretary determines it is in the best interests of the potential covered
65-employees. HOUSE BILL No. 2092—page 2
66-(e) A registrant's application registration shall automatically
67-expire 120 days after the end of the registrant's fiscal year. Within 120
68-days after the end of a registrant's fiscal year, such on October 15
69-following the issuance of such registration, except that any such
70-registration issued on or after January 1, 2025, shall expire on October
71-15, 2026. A registrant shall renew its registration by notifying the
72-secretary of any changes in the information provided in such
73-registrant's most recent registration or renewal. A registrant's existing
74-registration shall remain in effect for the period of time the renewal
75-application is pending.
90+(d) Each professional employer organization not operating within this
91+state as of the effective date of this act shall complete its initial registration
92+prior to initiating operations within this state. If a professional employer
93+organization not registered in this state becomes aware that an existing
94+client, not based in this state, has employees and operations in this state,
95+the professional employer organization shall either decline to provide
96+professional employer services for those employees, or notify the secretary
97+within five business days of the professional employer organization's
98+knowledge of this fact and file a limited registration application pursuant
99+to subsection (g), or a full registration if there are more than 50 covered
100+employees employed by such client. The secretary may issue an interim
101+operating permit for the period of time the application is pending if the
102+professional employer organization is currently registered or licensed by
103+another state and the secretary determines it is in the best interests of the
104+potential covered employees.
105+(e) A registrant's application registration shall automatically expire
106+120 days after the end of the registrant's fiscal year. Within 120 days after
107+the end of a registrant's fiscal year, such on October 15 following the
108+issuance of such registration, except that any such registration issued on
109+or after January 1, 2025, shall expire on October 15, 2026. A registrant
110+shall renew its registration by notifying the secretary of any changes in the
111+information provided in such registrant's most recent registration or
112+renewal. A registrant's existing registration shall remain in effect for the
113+period of time the renewal application is pending.
76114 (f) Professional employer organizations in a professional employer
77-group may satisfy any reporting and financial requirements of this
78-section on a combined or consolidated basis, provided that each
79-member of the professional employer group guarantees the financial
80-capacity obligations required by K.S.A. 44-1706, and amendments
81-thereto, of each other member of the professional employer group. In
82-the case of a professional employer group that submits a combined or
83-consolidated audited financial statement, including entities that are not
84-professional employer organizations or that are not in the professional
85-employer group, the controlling entity of the professional employer
86-group under the consolidated or combined statement must guarantee the
87-obligations of the professional employer organizations in the
88-professional employer group.
89-(g) (1) A professional employer organization is eligible for a
90-limited registration if such professional employer organization:
115+group may satisfy any reporting and financial requirements of this section
116+on a combined or consolidated basis, provided that each member of the
117+professional employer group guarantees the financial capacity obligations
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161+required by K.S.A. 44-1706, and amendments thereto, of each other
162+member of the professional employer group. In the case of a professional
163+employer group that submits a combined or consolidated audited financial
164+statement, including entities that are not professional employer
165+organizations or that are not in the professional employer group, the
166+controlling entity of the professional employer group under the
167+consolidated or combined statement must guarantee the obligations of the
168+professional employer organizations in the professional employer group.
169+(g) (1) A professional employer organization is eligible for a limited
170+registration if such professional employer organization:
91171 (A) Submits a written request for limited registration in such form
92172 and manner as prescribed by the secretary;
93173 (B) is domiciled outside this state and is licensed or registered as a
94174 professional employer organization in another state;
95-(C) does not maintain an office in this state or directly solicit
96-clients located or domiciled within this state; and
175+(C) does not maintain an office in this state or directly solicit clients
176+located or domiciled within this state; and
97177 (D) does not have more than 50 covered employees employed or
98178 domiciled in this state on any given day.
99179 (2) A limited registration is valid for one year and may be renewed
100180 thereafter.
101181 (3) A professional employer organization requesting limited
102182 registration under this subsection shall provide the secretary with such
103-information and documentation as required by the secretary to show
104-that the professional employer organization qualifies for a limited
105-registration.
106-(4) The provisions of K.S.A. 44-1706, and amendments thereto,
107-shall not apply to applicants for limited registration.
183+information and documentation as required by the secretary to show that
184+the professional employer organization qualifies for a limited registration.
185+(4) The provisions of K.S.A. 44-1706, and amendments thereto, shall
186+not apply to applicants for limited registration.
108187 (h) At the time of initial registration, the applicant shall submit the
109188 most recent audit of the applicant or such applicant's parent holding
110189 company. The most recent audit shall not be older than 13 months.
111-Thereafter, a professional employer organization or professional
112-employer group shall file on an annual basis, within 120 days after the
113-end of the professional employer organization's or parent holding
114-company's fiscal year, a succeeding audit and, not older than 12
115-months, with such applicant's renewal registration application. An
116-applicant may apply to the secretary for an extension of time to submit
117-such audit, but any such request shall be accompanied by a letter from
118-the auditor stating the reasons for the delay and the anticipated audit
119-completion date. For the initial application, if the closing date of the
120-audited financial statements required by this section is older than three
121-months from the date of the application, the application also shall
122-include updated, unaudited financial statements for the most recent
123-quarter. The financial statement shall be prepared in accordance with
124-generally accepted accounting principles and audited by an independent
125-certified public accountant licensed to practice in the jurisdiction in
126-which such accountant is located and shall be without qualification as
127-to the going concern status of the professional employer organization. A
128-professional employer group may submit combined or consolidated
129-audited financial statements to meet the requirements of this section. A HOUSE BILL No. 2092—page 3
130-professional employer organization that has not had sufficient operating
131-history to have audited financial statements based upon at least 12
132-months of operating history shall meet the financial capacity
133-requirements of subsection (f) and present financial statements
134-reviewed by a certified public accountant.
190+Thereafter, a professional employer organization or professional employer
191+group shall file on an annual basis, within 120 days after the end of the
192+professional employer organization's or parent holding company's fiscal
193+year, a succeeding audit and, not older than 12 months, with such
194+applicant's renewal registration application. An applicant may apply to the
195+secretary for an extension of time to submit such audit, but any such
196+request shall be accompanied by a letter from the auditor stating the
197+reasons for the delay and the anticipated audit completion date. For the
198+initial application, if the closing date of the audited financial statements
199+required by this section is older than three months from the date of the
200+application, the application also shall include updated, unaudited financial
201+statements for the most recent quarter. The financial statement shall be
202+prepared in accordance with generally accepted accounting principles and
203+audited by an independent certified public accountant licensed to practice
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247+in the jurisdiction in which such accountant is located and shall be without
248+qualification as to the going concern status of the professional employer
249+organization. A professional employer group may submit combined or
250+consolidated audited financial statements to meet the requirements of this
251+section. A professional employer organization that has not had sufficient
252+operating history to have audited financial statements based upon at least
253+12 months of operating history shall meet the financial capacity
254+requirements of subsection (f) and present financial statements reviewed
255+by a certified public accountant.
135256 (i) The secretary shall maintain a list of professional employer
136257 organizations registered under this section, and such list shall be readily
137258 available to the public by electronic or other means.
138-(j) The secretary, to the extent feasible, shall permit the acceptance
139-of electronic filings, including initial registration and renewal
140-applications, documents, reports and other filings required by the
141-secretary under this section. The secretary may provide for the
142-acceptance of electronic filings and registration information for initial
143-registration and renewal applications, reports and other assurance
144-documents by an independent and qualified assurance organization
145-approved by the secretary that provides satisfactory assurance of
146-compliance acceptable to the secretary consistent with, or in lieu of, the
147-requirements of this section and K.S.A. 44-1706, and amendments
148-thereto. The secretary shall permit a professional employer organization
149-to authorize such assurance organization approved by the secretary to
150-act on the professional employer organization's behalf, including
151-electronic filings and provisions of registration information for initial
152-registration and renewal applications and payment of registration fees
153-in complying with the registration requirements of subsections (c)
154-through (h). Use of such an approved assurance organization shall be
155-optional and not mandatory for a registrant. Nothing in this subsection
156-shall limit or change the secretary's authority to register or terminate
157-registration of a professional employer organization or to investigate or
158-enforce any provision of K.S.A. 44-1701 through 44-1711, and
159-amendments thereto.
259+(j) The secretary, to the extent feasible, shall permit the acceptance of
260+electronic filings, including initial registration and renewal applications,
261+documents, reports and other filings required by the secretary under this
262+section. The secretary may provide for the acceptance of electronic filings
263+and registration information for initial registration and renewal
264+applications, reports and other assurance documents by an independent
265+and qualified assurance organization approved by the secretary that
266+provides satisfactory assurance of compliance acceptable to the secretary
267+consistent with, or in lieu of, the requirements of this section and K.S.A.
268+44-1706, and amendments thereto. The secretary shall permit a
269+professional employer organization to authorize such assurance
270+organization approved by the secretary to act on the professional employer
271+organization's behalf, including electronic filings and provisions of
272+registration information for initial registration and renewal applications
273+and payment of registration fees in complying with the registration
274+requirements of subsections (c) through (h). Use of such an approved
275+assurance organization shall be optional and not mandatory for a
276+registrant. Nothing in this subsection shall limit or change the secretary's
277+authority to register or terminate registration of a professional employer
278+organization or to investigate or enforce any provision of K.S.A. 44-1701
279+through 44-1711, and amendments thereto.
160280 Sec. 2. K.S.A. 2024 Supp. 44-1706 is hereby amended to read as
161-follows: 44-1706. Except as provided by K.S.A. 44-1704(g) and (j),
162-and amendments thereto, each professional employer organization, or
281+follows: 44-1706. Except as provided by K.S.A. 44-1704(g) and (j), and
282+amendments thereto, each professional employer organization, or
163283 collectively each professional employer group shall either:
164-(a) Maintain positive working capital upon registration as
165-reflected in the financial statements submitted to the secretary with the
166-initial registration application and each renewal application; or
167-(b) for a professional employer organization or professional
168-employer group that does not have sufficient positive working capital
169-as required in subsection (a), submit a bond, irrevocable letter of credit
170-or securities with a minimum market value in an amount equal to the
171-sum of the amount that would be necessary for such professional
172-employer organization or professional employer group to comply with
173-subsection (a) plus $100,000 to the secretary at such time as the
174-professional employer organization or professional employer group
175-does not have sufficient working capital. Such bond shall be held by a
176-depository designated by the secretary securing payment by the
177-professional employer organization of all taxes, wages, benefits or
178-other entitlement due to or with respect to covered employees, if the
179-professional employer organization does not make such payments when
180-due. HOUSE BILL No. 2092—page 4
181-Sec. 3. K.S.A. 2024 Supp. 44-1704 and 44-1706 are hereby
182-repealed.
284+(a) Maintain positive working capital upon registration as reflected in
285+the financial statements submitted to the secretary with the initial
286+registration application and each renewal application; or
287+(b) for a professional employer organization or professional employer
288+group that does not have sufficient positive working capital as required in
289+subsection (a), submit a bond, irrevocable letter of credit or securities with
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333+a minimum market value in an amount equal to the sum of the amount that
334+would be necessary for such professional employer organization or
335+professional employer group to comply with subsection (a) plus $100,000
336+to the secretary at such time as the professional employer organization or
337+professional employer group does not have sufficient working capital.
338+Such bond shall be held by a depository designated by the secretary
339+securing payment by the professional employer organization of all taxes,
340+wages, benefits or other entitlement due to or with respect to covered
341+employees, if the professional employer organization does not make such
342+payments when due.
343+Sec. 3. K.S.A. 2024 Supp. 44-1704 and 44-1706 are hereby repealed.
183344 Sec. 4. This act shall take effect and be in force from and after its
184345 publication in the statute book.
185-I hereby certify that the above BILL originated in the
186-HOUSE, and passed that body
187-Speaker of the House.
188-Chief Clerk of the House.
189-
190-Passed the SENATE ______________________________________________________________________________
191-President of the Senate.
192-Secretary of the Senate.
193-APPROVED __________________________________________________________________________________________________
194-Governor.
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