The Ultimate Guide to Pay Stub Requirements by State
It’s difficult for employers to know what their pay stub obligations are, as there are different state and federal laws.
Knowing your pay stub requirements by state will help your business comply with Department of Labor requirements and avoid costly penalties.
This guide will outline everything you need to know about pay stubs, including how to create one, why employers should provide pay stubs and the potential consequences of non-compliance.
Understanding pay stubs
Before we unpack what the requirements are by state, let’s first define what a pay stub is.
A pay stub is a written, itemized statement that documents the details of an employee’s total wages earned during a specific pay period.
The first step in creating a pay stub is to have each employee complete a Form W-4.
Once this process is completed, employers will be required to provide the following basic information:
- The employee’s number of hours worked during the pay period
- The total wages paid before the employee’s deductions
- Federal, state and local taxes withheld from the employee’s gross earnings
- Other withholdings, including the employee’s share of insurance premiums
- Net pay
Pay stubs are important because they can be used as proof of income when employees apply for a loan, buy a home or need a record to query their deductions or gross pay.
Employers need to ensure that the information on the pay stub matches the data on each employee’s W-2 form, which is used to file personal tax returns.
There are many different ways employers can create pay stubs.
If your business uses accounting or payroll software, it’s likely that these programs have built-in pay stub makers.
Spreadsheet programs like Excel also allow business owners to create their own pay stub templates.
Alternatively, employers can use Form Pros’ online, user-friendly pay stub generator. We’ll go into more detail about how to create electronic pay stubs later in the article.
Are employers required to provide pay stubs?
There is no federal law that requires employers to provide pay stubs to their employees, or one that all states must follow.
However, employers should keep the Fair Labor Standards Act in mind.
This is a federal law which “establishes minimum wage, overtime pay eligibility, recordkeeping and child labor standards affecting full-time and part-time workers in the private sector and in federal, state and local governments.”
Although pay stubs are not required under federal law, the Fair Labor Standards Act states that employers must “keep employee time and pay records”.
Therefore, business owners should consult their state’s Department of Labor to determine what the pay stub requirements are in their area.
Pay stub requirements by state
Each state has different pay stub requirements, which means employers need to familiarize themselves with what these rules are.
There are three different types of states:
- Access states
- Access print/states
- No requirement states
Let’s take a closer look at what each of these means and which states fall underneath them.
Access states
These states require employers to provide their employees with access to a pay stub that includes all of their pay information.
It’s not specified that the pay stub has to be a physical copy, which means that employers can provide the pay stub electronically and still comply with these requirements.
These states include:
- Alaska
- Arizona
- Idaho
- Illinois
- Indiana
- Kansas
- Kentucky
- Maryland
- Michigan
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New York
- North Dakota
- Oklahoma
- Pennsylvania
- Rhode Island
- South Carolina
- Utah
- Virginia
- West Virginia
- Wisconsin
- Wyoming
Access/print states
States that fall under this category require employers to provide a physical copy (either written or printed) of the pay stub that outlines the employee’s pay information.
Although employers can provide electronic pay stubs, they must first ensure that their employees are able to print their pay statement.
These states include:
- California
- Colorado
- Connecticut
- Iowa
- Maine
- Massachusetts
- New Mexico
- North Carolina
- Texas
- Vermont
- Washington
No requirement states
As the name suggests, these states do not require employers to provide pay stubs to their employees.
An employer can choose to provide electronic pay stubs but it is not required by state law. These states include:
- Alabama
- Arkansas
- Florida
- Georgia
- Louisiana
- Mississippi
- Ohio
- South Dakota
- Tennessee
Employers also need to determine whether they are in an opt-out or an opt-in state.
Opt-out states
Employers must first get the employee’s consent before changing the way it delivers pay stubs.
Within opt-out states, if the employee does not agree to the change the employer must adhere to the original pay stub delivery method.
Opt-in states
Employers are required to provide a physical copy of the pay stub. If the employee chooses to receive electronic pay stubs the physical copy is not needed.
As it stands, Hawaii is the only state that requires employee consent before implementing an electronic pay stub system.
What are the consequences of pay stub non-compliance?
The penalties for not providing employees with pay stubs vary according to state and will depend on the state’s law.
For example, in California employers can be fined $50 for an initial pay stub violation and $100 per employee for each violation in a pay period.
Employees in California are entitled to recover damages of up to $4,000 in the event that pay stub requirements are violated.
Form Pros Pay Stub Generator
Our pay stub generator provides a fast and easy solution to creating pay stubs online. The process is fully automated and user friendly.
Not only are all calculations of deductions and income tax withholdings based on current tax laws, but we also keep up to date with new requirements every tax year.
Better yet, our intuitive pay stub generator allows employers to instantly and efficiently create pay stubs for a fraction of the cost that they would pay accounts or payroll companies. Click here to find out how to create pay stubs in three easy steps with Form Pros.