Taking care of your employees is your best ticket to success within your small business. And there’s a lot that goes into that. But arguably one of the most important decisions you’ll make with regards to your employees is how you’re going to handle the payroll process.
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The Fair Labor Standards Act (FLSA) does not require an employer to provide employees with pay stubs, however it does require that employers keep accurate records of hours worked and wages paid to employees.
So before choosing how to go about paying your employees, ensure you’re following state compliance. According to PaperlessPay, these are the requirements by state for the delivery of employee pay information:
No Requirement States
The following states do not require employers to provide a statement that details an employee’s pay information. This means an employer may deliver a pay statement in an electronic format, if the employer elects to provide pay stubs to employees.
- South Dakota
The following states require employers to furnish or provide a statement at details an employee’s pay information. It is not required that the pay statement be in writing or on paper. A reasonable interpretation of the law suggests that an employer can comply with the pay stub requirements in these states by furnishing an electronic pay stub. Employees must be able to access the electronic pay stubs.
Note: most states have adopted this interpretation, however some state agencies may vary. In those cases, state agencies might require additional items like the capability to print the electronic statements.
- New Hampshire
- New Jersey
- New York
- North Dakota
- Rhode Island
- South Carolina
- West Virginia
These states require employers to provide a written or printed pay statement that details the employee’s pay information. The pay statements are not required to be delivered with the check or in another medium. Reasonable interpretation of this law says an employer can comply with the pay stub requirements in these states by furnishing an electronic pay stub that employees can print. Employers must ensure their employees have access to the electronic pay stubs and the capability of printing the electronic statements.
Note: most state agencies have adopted this interpretation, however some state agencies may vary. In those circumstances, state agencies have offered an interpretation that might include additional requirements such as an employee’s consent to receive the pay stub electronically.
- New Mexico
- North Carolina
When the state adopts a specific method of delivery (such as on the paycheck or pay envelope), electronic delivery requires employee consent. If an employer in one of these states rolls out a paperless pay program to all employees, they must be allowed to opt out to begin receiving their paper pay stub once again.
Currently, the state of Hawaii is the only state that requires employee consent prior to implementation of an electronic paperless pay system. Employers in Hawaii must provide a written or printed pay statement with details of the employee’s pay information unless the employee agrees to receive their pay statement electronically.
Please note that this is not all inclusive. Our guidance is designed only to give general information on the issues actually covered. It is not intended to be a comprehensive summary of all laws which may be applicable to your situation, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion. Consult your own legal advisor regarding specific application of the information to your own plan.
Be sure to check out our blog on making sense of your paycheck, here.
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