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Electronic services like direct deposit, online pay statements and online access to payroll reports are becoming more popular. Could your business be out of compliance though if you only provide your employees with an electronic or online copy of their pay statement? The answer is yes.
Before you go to a completely paperless payroll services solution using online pay statements, it's best to carefully review the state requirements for the delivery of employee pay information. Some states may interpret these obligations differently and may include additional requirements in order to comply with the statute.
States That Don't Have a Pay Statement Requirement
There are eight U.S. states that don't require employers to provide a pay statement to their employees. These states include Arkansas, Florida, Louisiana, Mississippi, Nebraska, South Dakota, Tennessee and Virginia. If employers in these states choose to provide pay stubs to their employees, they can do so electronically. In the state of Virginia, an employer must provide a wage statement to an employee only if the employee requests it.
States That Require Access to a Pay Statement
The following states require that an employer furnish', give' or provide' an employee access to an earnings statement that contains detailed pay information. They don't require that it be a written or paper wage statement so the statute leaves room for the interpretation that an electronic pay stub is acceptable. States that require access to a pay statement include:
States That Require Access to a Printed Pay Statement
The following states require that an employer provide an employee with access to a printed pay statement. Since employees can print an online or electronic statement, the interpretation of the law seems to be that it is reasonable to provide employees with access to an online pay statement as long as they have the ability to print it. States that require access to a printed earnings statement include:
States That Allow Employees to Opt-Out of Receiving Electronic Pay Statements
There are six states that allow employers to provide employees with electronic delivery of their pay statements. If your business wants to begin using a paperless payroll program with an online or electronic earnings statement, you must allow your employees to opt-out of receiving their statements electronically and go back to receiving a paper pay stub again. The states that give employees the option of returning to a paper wage statement include California, Delaware, Massachusetts, Oregon, Wisconsin and Wyoming.
NOTE: As of the publish date for this article, the information related to state requirements for access to printed or electronic pay statements was correct. However states may periodically update their requirements. For the most current information on state requirements for earnings statements, visit the Paperlesspay.org website to access an interactive map showing the regulations and/or restrictions for each state.