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HB 2092

Setting the time for professional employer organization registration expiration, renewal and the filing of audits with the secretary of state, limiting the method of providing surety for professional employer organizations with insufficient working capital to bonds and eliminating a market value measure of the sufficiency of such bonds.

2025-2026 Regular Session

Kansas HB 2092 standardizes PEO registration expirations to Oct 15 and requires annual audits with renewals, while limiting surety to bonds with a minimum buffer.

Approved by Governor on Wednesday, March 26, 2025
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Bill Summary · HB 2092

Summary — HB 2092 (Kansas)

Title: Setting the time for professional employer organization registration expiration, renewal and the filing of audits with the secretary of state; limiting the method of providing surety for professional employer organizations with insufficient working capital to bonds and eliminating a market value measure of the sufficiency of such bonds.

Purpose

To streamline and standardize Professional Employer Organization (PEO) registration and renewal deadlines with the Secretary of State and to tighten/clarify surety requirements for PEOs that lack required working capital.

Key provisions

  • Registration expiration date

    • Replaces the current automatic expiration tied to “120 days after a PEO’s fiscal year” with a single, uniform automatic expiration date of October 15 following issuance of the registration.
    • Transitional rule: any registrations issued on or after January 1, 2025 are exempt from the new cycle and instead expire on October 15, 2026.

  • Audit filing and renewal timing

    • Requires a PEO seeking renewal to submit an annual audit that is no older than 12 months at the time of renewal — aligning audit filing with the renewal application (i.e., audits must accompany the renewal).
    • (Existing flexibility for the initial registration’s audit and possible extension requests remains in statute language.)

  • Surety for insufficient working capital

    • For PEOs that do not meet statutory working-capital requirements, the bill limits acceptable surety to surety bonds only. It removes irrevocable letters of credit and securities as alternatives.
    • Eliminates any market-value measure previously used to evaluate bond sufficiency.
    • Requires the bond to have a minimum face value equal to the amount necessary to meet the statutory working-capital requirement plus $100,000.
    • The bond must cover unpaid taxes, wages, benefits or other entitlements due to covered employees if the PEO cannot make payments when due.

  • Statutory updates

    • Amends K.S.A. 2024 Supp. 44-1704 and 44-1706 and repeals the prior sections as applicable.

Who is affected

  • Primary: PEOs operating or registering to operate in Kansas (including those seeking limited registrations).
  • Secondary: PEO clients and their covered employees (indirectly, through changes to financial assurance standards).
  • Other: Providers of letters of credit or securities used previously for PEO surety will no longer be acceptable in this context; surety bond market/issuers may see increased demand. The Secretary of State’s office administers the registration/renewal process.

Timeline & procedural history

  • Introduced: January 24, 2025 (requested by the Office of the Secretary of State).
  • Passed Legislature and presented to Governor; enrolled version indicates the law becomes effective July 1, 2025.
  • Registrations issued on/after Jan 1, 2025 expire Oct 15, 2026 (transitional provision).

Fiscal impact & support

  • Fiscal note: The Office of the Secretary of State indicated no fiscal effect on agency operations.
  • Support: Testimony from the Secretary of State’s office and at least one PEO (Lever1) argued the bill simplifies administration and surety processes.

Context / Practical effect

  • Standardizing the expiration to October 15 simplifies renewal scheduling and aligns audit submission with renewals.
  • Restricting surety to bonds (with a set minimum buffer of $100,000 over required working capital) raises the certainty and liquidity of protections available to employees and creditors, while removing alternative financial instruments that may have been used to meet bond-equivalency tests.

Compiled from official sources — confirm details with the bill’s official record.

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