I finally get my 91 K100RS back together after a new paint job and the rear brake doesn't work at all when I took the bike down the street. Any ideas where to start w/ diagnosing this issue? 

It looks like my brake fluid is quite low, could this cause the rear brake to not function? 

Thanks for any direction.

Work backwards.  When you disassembled to get the parts painted, did you touch any parts of the rear brake system?  For example, loosen or remove banjo bolts, remove line from the back brake caliper or use the back brake when the caliper was off the disk? Low fluid could contribute to no brakes but it usually indicates air in the brake lines somewhere.  BTW, is this an ABS system?

I didn't touch the brake caliper when removing parts for painting. I did remove the rear wheel fender to have it painted. This is the closest part to the rear brake that I can think of. Would there be anything impacted by removing the rear fender?

Admittedly,  I'm not sure if its ABS, how do I determine that? 

Thanks

If the ABS control unit would be behind the storage compartment, I don't have that on my model.

You'll have great big cylindrical modulators on either side of the bike, just above the footrests with the word "ABS" emblazoned on them.


Removing the rear fender will not affect the rear brake in any way.

If you have normal brakes (non-ABS), then it's probably you have air in the system.  Any small amount trapped somewhere in the system will exhibit the symptoms you see.  The rear brake needs to be bled to expel the air trapped in the lines.  There are many threads on the subject of how to do such a brake bleed if you search the forum.

Examine under the right footpeg plate to see whether there are obvious signs of fluid leakage from the master cylinder or the line that connects it to the rear caliper.  These clues will point you to the problem.  There aren't too many parts in the non-ABS back brake system -- reservoir, master cylinder, brake line, and caliper.  Any leak in the reservoir will not contribute to a soft brake pedal.  Leakage from the front of the MC, from the straight connector at the rear of the MC, at the joint where the flex line meets the rigid line or at the caliper are the points where air can enter the system and cause a problem.  If you have the original rubber brake line, it's possible that it has reached EOL and needs to be replaced.