Going paperless. Some do it to save the environment, some do it to save money, and some do it to save time. No matter what the reason, there are some things to consider when it comes to the payroll process and the payroll check.
While the “check” itself becomes obsolete as many individuals go on direct deposit, it is always attached to a check stub, or as we call it, a pay statement, a detail of the employee’s wages, deductions withheld, taxes withheld, and sometimes other important information. According to the United States Department of Labor, the Fair Labor Standards Act (FLSA) does not require that employers provide a pay statement to their employees. For those employees on direct deposit, there is nothing that would prevent you from eliminating the need to distribute pay statements.
But, what about state laws?
Similar to Federal, the following ten states do not require employers to provide a pay statement to their employees. These states include;
- Alabama
- Arkansas
- Florida
- Georgia
- Louisiana
- Mississippi
- Nebraska
- Ohio
- South Dakota
- Tennessee
There are 26 states that require an employer provide their employee’s with access to a pay statement that includes detailed pay information. They do not require that it is on paper, so that leaves the ability to provide an electronic pay stub, or online access being acceptable. These states include;
- Alaska
- Arizona
- DC
- Idaho
- Illinois
- Indiana
- Kansas
- Kentucky
- Maryland
- Michigan
- Missouri
- Montana
- Nevada
- New Hampshire
- New Jersey
- New York
- North Dakota
- Oklahoma
- Pennsylvania
- Rhode Island
- South Carolina
- Utah
- Virginia
- Washington
- West Virginia
- Wisconsin
There are eight states that require an employer provide an employee with access to a printed pay statement. As long as an employee can print their pay statement via an electronic/online delivery method, this would appear to comply with the law. These states include;
- Colorado
- Connecticut
- Iowa
- Maine
- New Mexico
- North Carolina
- Texas
- Vermont
While the employer can mandate the delivery method to their employees, there are five states that allow the employee to opt-out of receiving their pay statements electronically and go back to receiving it on paper. These states include;
- California
- Delaware
- Minnesota
- Oregon
- Wyoming
There is also one state that allows electronic delivery/ of the pay statement to employees upon written authorization (opt-in) from the employee. This state is Hawaii.
One state has a complicated law, Massachusetts, where a new employee “shall be notified in writing at the time of the first payment of his wages about the nature of such deduction or contribution; and further, that each such employee shall be notified in writing at the initial time of any new deduction or contribution from their wages about the nature of such deductions or contributions.”
As companies are able to achieve 100% employee adoption of direct deposit, this topic becomes more relevant as we look for ways to bring efficiencies into the payroll process, thus saving time, money, and the environment.
Remember… PaperLESS is More™
