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August 17, 2020

Kansas won't charge employer accounts for COVID-19 UI benefits or add the fund-building surcharge to 2021 tax rates; annual statement of benefit charges to be delayed

In the 2020 Kansas special session, state law makers passed HB 2016 providing that contributory employers will not be charged for unemployment insurance (UI) benefits attributable directly to COVID-19. The bill does not give an expiration date for the waiver of COVID-19 UI benefit charges nor does it extend the provision to reimbursing employers (governmental employers and charities). (HB 2016 enactedon June 9.)

Annual notice of benefit charges to be delayed

According to a representative of the Kansas Department of Labor, the annual Form K-CNS 403, Notice of Benefit Charges, usually issued each August for the most recent fiscal year ending June 30, will be delayed while the Department confirms that the statement reflects the removal of COVID-19 UI benefit charges. (Email response to inquiry.)

Fund building surcharge won't apply to 2021 tax rates

Also provided under the law, for calendar year 2021, Kansas state UI tax rates for experience-rated employers will be based on the standard rate schedule under Kansas UI law. As a result, there will not be an additional fund-building solvency adjustment applied to employer 2021 UI tax rates.

State workshare program change

The law also eliminates the provision of UI law that prohibits negative-balanced employers from participating in shared work plans, as long as this does not adversely impact the ability of the state to qualify for federal reimbursement of shared work UI benefits during 2020.

Work-search requirements and one-week waiting period waived

HB 2016 codifies the waiver of work-search requirements during a disaster emergency proclaimed by the governor and in response to the spread of COVID-19. The law also waives the one-week waiting period for workers collecting COVID-19 UI benefits from April 5, 2020 to December 26, 2020. See the Department's fact sheet for more information on COVID-19 UI benefit eligibility.

Further, HB 2016 requires Kansas employers to provide employees with notification of the availability of UI benefits at the time of separation from employment or reduction in hours.

Now that businesses are reopening, the Department requests that employers report on Form K-BEN 3118, Job Refusal Statement, when workers collecting COVID-19 UI benefits refuse to return to work when contacted. These workers may be found ineligible for continued collection of UI benefits except under certain circumstances that could, on a case-by-case basis, be considered good cause to refuse work.

For more information on the Department's response to COVID-19, go here.

Ernst & Young LLP insights

Previously enacted SB 27 temporarily extends the duration of UI benefits filed on or after January 1, 2020 to a maximum of 26 weeks of benefits, instead of the maximum of 16 weeks under the previous law which restricted the number of weeks for which a worker could claim UI benefits to 16 weeks, 20 weeks, or 26 weeks if the Kansas UI benefit rate was less than 4.5%, at least 4.5% but less than 6.0%, or at least 6.0%, respectively. (Department news release.)

Due to the lateness of the legislation providing for the noncharge of COVID-19 UI benefits, employers should review the annual benefit charge statement once issued to confirm the Department removes these charges from their experience accounts.


Contact Information
For additional information concerning this Alert, please contact:
Workforce Tax Services - Employment Tax Advisory Services
   • Debera Salam (
   • Kristie Lowery (
   • Kenneth Hausser (
   • Peter Berard (


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