Federal labor law does not require you to provide pay stubs to your employees. However, many states have their own pay stub laws that do require you to supply them.
Even if you live in a state without any pay stub requirements, the Fair Labor Standards Act (FLSA) does require you to maintain records about payments to nonexempt employees, including: dates and hours worked, rate of pay, and payments made for specified pay periods—among other requirements. Check out the Department of Labor’s webpage for a full list.
Use this article to get a better understanding of your pay stub requirements as an employer.
What are my state’s pay stub requirements?
Below, we break down the three types of actions your state may require.
Do you live in a state with no requirements?
If so, you don’t have to provide any kind of paycheck stub. States with no pay stub requirements include:
Do you live in an “access state”?
If so, you are required to provide some type of stub, either electronic or paper. Access states include:
|Nevada||New Hampshire||New Jersey||New York|
|North Dakota||Oklahoma||Pennsylvania||Rhode Island|
|South Carolina||Utah||Virginia||West Virginia|
Do you live in an “access/print” state?
The following states (known as access/print states) allow you to provide either an electronic or paper stub to your employees, but these employees must have an easy way to print or access them.
|New Mexico||North Carolina||Texas|
Do you live in an “opt-in” or “opt-out” state?
You also need to figure out whether you’re in an “opt-out” or “opt-in” state:
- In opt-out states, businesses must provide paper pay stubs to employees who opt-out of receiving electronic pay stubs. Opt-out states include:
- In opt-in states, employers must offer paper stubs unless an employee chooses (opts-in) to get the stub electronically. Currently, Hawaii is the only state with this requirement.
Check your state’s Department of Labor website to ensure that your company is compliant with any applicable regulations.
If I am required to provide a pay stub, what needs to be on it?
That also depends on the employment laws in your state and your industry, so be sure to check.
Here’s an example of what a paycheck stub in Colorado must include:
- Gross wages earned
- All withholdings and deductions
- Net wages earned
- The inclusive dates of the pay period
- The name of the employee or the employee’s social security number
- The name and address of the employer
What are the penalties for failing to provide a pay stub in a state that requires them?
Penalties for violating pay stub laws vary by state. In California, an employer who refuses to provide pay stubs can incur a penalty of up to $4,000 per employee.
What are the benefits to providing pay stubs?
Even if you’re not required to provide pay stubs, doing so is likely to save you time on answering questions that employees may have about how hours and deductions are calculated. Additionally, employees may need pay stubs to prove their income in a number of normal life events, like applying for a mortgage or a line of credit for a car purchase.
The best thing to do is to consult a CPA or rely on your small business payroll provider to ensure your pay stubs, and everything else that goes with payroll, are compliant with local, state and federal laws.
This post was originally published on June 6, 2018.