Kentucky Employer HR Compliance Guide

Priority Compliance Actions

• 1Review and document compensation structures to ensure compliance with Kentucky's equal pay law (KRS §337.420), particularly if you employ two or more workers for 20+ weeks.
• 2Confirm final paycheck procedures issue wages by the next regular payday or within 14 days of separation for all terminations.
• 3Audit independent contractor classifications using the ABC Test for UI purposes and the right-to-control test for wage-and-hour purposes to minimize misclassification risk.
• 4Update non-compete agreements to ensure they are narrowly tailored in scope, duration, and geography, and supported by adequate consideration.
• 5Register with the Kentucky New Hire Reporting Center and ensure new hire reports are submitted within 20 days of each employee's start date.

Leave Laws

Federal FMLA applies to Kentucky employers with 50 or more employees, providing up to 12 weeks of unpaid, job-protected leave. Kentucky has no statewide paid sick leave mandate, and local governments are prohibited from enacting their own paid sick leave ordinances. Kentucky requires healthcare continuation coverage for up to 18 months for covered employees and dependents, similar to federal COBRA. No additional state-specific family or medical leave laws apply beyond federal requirements.

Wage & Hour

Kentucky follows federal FLSA overtime rules, requiring 1.5× the regular rate for hours worked beyond 40 in a workweek, with no additional state overtime thresholds. Final pay is due by the next regular payday or within 14 days of separation, whichever is later, applying to both voluntary and involuntary terminations. Kentucky permits a tip credit; tipped employees must receive at least $2.13/hour directly, with tips making up the difference to $7.25. Kentucky has no notable state-specific expense reimbursement statute beyond federal requirements.

Worker Classification

Kentucky is an at-will employment state, allowing termination by either party for any lawful reason without notice. For unemployment insurance purposes, Kentucky applies the ABC Test for independent contractor classification; for wage-and-hour matters, the right-to-control standard applies. Non-compete agreements are generally enforceable in Kentucky if they are reasonable in scope, duration, and geographic area, and supported by adequate consideration.

Hiring & Onboarding

Kentucky does not have a statewide ban-the-box law for private employers, though Louisville has its own ordinance restricting criminal history inquiries. There is no statewide salary history ban. Employers must report new hires to the Kentucky New Hire Reporting Center within 20 days of the hire date. Kentucky has no specific state-mandated drug testing requirements, but employers may implement policies consistent with federal guidelines, particularly in safety-sensitive industries.

Related Tools

Law Changes

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