If the only people who work for you are family, you may not need workers compensation in Kansas at all, and the reason is a special rule in the payroll count. When Kansas adds up your gross annual payroll to see if you pass the 20,000 dollar line, it leaves out wages paid to an employee who is a member of your family by marriage or blood. So a sole proprietor who employs only relatives often stays under the line and is a non-covered employer. The answer changes once you add non-family staff or set the business up as a corporation.
Who this is for: Kansas owners who employ only relatives, including family restaurants, farms that have taken on non-farm work, and small businesses run by a couple, parents and children, or siblings.
The short version
- Kansas leaves wages paid to your own family members out of the 20,000 dollar payroll count.
- A sole proprietor who employs only family often stays under the line and is not required to insure.
- Add non-family staff and their wages can push your countable payroll over 20,000 dollars.
- A corporation has no family of its own, so this break does not apply and all its wages count.
- Farm and agricultural labor is separately exempt from the Act.
How the family-wage rule works
The Kansas payroll test has one written subtraction: wages paid to an employee who is a member of the employer's family by marriage or consanguinity are not included in the total gross annual payroll. Consanguinity just means a blood relative. So when a natural-person owner, like a sole proprietor, figures the 20,000 dollar line, the pay of a spouse, child, parent, or sibling is left out. If those relatives are your only workers, your countable payroll can be zero, and you are a non-covered employer. The moment you also pay non-family staff, their wages count and can carry you over the line.
| Who works for you | Do their wages count toward 20,000 dollars? |
|---|---|
| Your family members, natural-person owner | No, family wages are left out of the count |
| Non-family employees | Yes, their wages count |
| Employees of a corporation you own | Yes, a corporation gets no family break |
| Relatives doing farm or agricultural labor | Farm work is separately exempt from the Act |
| A relative who is really a co-owner | Owners are handled by the owner rules, not counted as staff |
Watch the business type and the farm carve-out
Two things change the family answer. The first is your structure: the family-wage break is written around a natural-person employer's own family, so a corporation, which has no family of its own, does not get it, and all of a corporation's payroll counts toward the line. If you run the family business as a corporation, plan on the pay of everyone, relatives included, counting. The second is farming: agricultural pursuits are exempt from the Kansas Act regardless of the payroll count, so a family farm doing only farm work sits outside the requirement. Once a family business does regular non-farm work and pays non-family staff, the ordinary 20,000 dollar test governs.
A Hutchinson example
Illustrative, not a quote. A Hutchinson family restaurant is run by a married couple as a sole proprietorship, with their two adult children cooking and serving. Because all the workers are the owner's family, their wages are left out of the 20,000 dollar count, so the business is a non-covered employer and Kansas does not require a policy. When the couple later hires two non-family servers at a combined 35,000 dollars, that pay counts, puts them over the line, and a policy becomes required for the non-family staff. See our workers comp for restaurants page.
Real questions Kansas owners ask
Do I need workers comp if I only employ family in Kansas?
Often no. Kansas leaves wages paid to your own family members out of the 20,000 dollar payroll count, so a sole proprietor whose only workers are relatives usually stays under the line and is a non-covered employer.
Which relatives count as family for this rule?
The rule covers a member of the employer's family by marriage or blood, such as a spouse, child, parent, or sibling. Their wages are left out of the gross annual payroll used to test the 20,000 dollar line.
What if I also hire someone who is not family?
Then their wages count. Non-family employee pay is added to the total, so once your countable payroll passes 20,000 dollars a year you must carry coverage for the staff who are not exempt from the count.
Does the family break apply if I run a corporation?
No. The break is written around a natural person's own family, and a corporation has no family of its own, so all of a corporation's payroll counts toward the line, including pay to relatives.
What if we run a family farm?
Agricultural pursuits are exempt from the Kansas Workers Compensation Act, so a family farm doing only farm work sits outside the requirement regardless of the payroll count.
Are the owners covered if we are all family?
Owners are handled by business type, not by being family. Sole proprietors, partners, and LLC members are off by default and elect in, while a corporation's officers are on by default with only a 10 percent owner able to opt out.
Should we buy a policy anyway even if we are not required to?
Many family businesses do. An on-the-job injury to a relative is still a real medical and income loss, and clients or landlords may ask for proof of coverage, so a policy can protect the family and satisfy contracts.
Why Kansas owners choose Morrow
- We shop the right market for you. In Kansas you buy workers comp on the open, competitive market from any private insurer licensed in the state, because there is no state fund, and if no carrier will take you the state's assigned risk plan, run by the national rating bureau, is the guaranteed backstop, so we can shop your rate freely and still have a fallback for hard-to-place work.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related Kansas guides
Every Kansas business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in Kansas (start here)
- Workers comp: the owner's overview
- I own an LLC: do I need workers comp?
- I'm a sole proprietor: do I need workers comp?
- I own a corporation (C-corp or S-corp): do I need it?
- We're a partnership: do we need workers comp?
- We're a nonprofit: do we need workers comp?
- My workers are 1099: do I still need it?
- Only part-time or seasonal staff: do I need it?
- Remote or out-of-state staff: do I need coverage?
- What happens if I don't carry workers comp?
- How much does workers comp cost?
- How do I get workers comp (even if turned down)?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- Do sole proprietors need workers comp?
- Hiring your first employee: what changes
- Kansas restaurant workers comp
This guide is general information, not legal advice. Kansas rules and penalty amounts can change, so verify current requirements with the Kansas Department of Labor, Division of Workers Compensation or a licensed advisor before you rely on them. Last updated: July 2026.