Paperless pay stubs are convenient in many ways, but are they legal? The short answer is, it depends where you work. The Federal Fair Labor Standards Act (FLSA), does not require an employer to provide pay stubs to employees. Rather, employers are required to keep accurate recordkeeping of hours worked and wages paid.
Whether or not you can require paperless pay stubs comes down to the state the employee works in. Although most states require pay stubs, some allow electronic access to them, some say that the employee must have the option to print them, and some say you must receive employee consent to go paperless. Some states have no requirements regarding paper vs. paperless pay stubs, leaving the decision up to the employer.
In the states that require pay stubs, in general, there are no specifications that they be in paper or electronic format. Where state law does not expressly outline the requirements, reasonable interpretation is that employees must at least be able to access and view their pay stubs. Since the laws vary across all 50 states, the takeaway for employers is to ensure they are in compliance based on where the employees works.
The laws are similar with direct deposit. State law dictates whether you can require employees to collect their pay through direct deposit. For many states, direct deposit is optional, but in most cases, employers must receive authorization from employees to determine which method they prefer for receiving their pay. Some states also offer the option of a payroll debit card as an alternative method of direct deposit.
The key takeaway for employers is that, very often, state law drives many areas of payroll compliance. We recommend working with your payroll provider to ensure you are following the appropriate state requirements. Clients of HR Knowledge can reach out to us to confirm their state requirements and to discuss paperless payroll options.
If you are not one of our payroll clients and want to take the payroll burden off your plate, please contact us today to learn more about our integrated payroll, benefits, and HR solutions.
Founded in 2001, HR Knowledge, Inc. provides integrated outsourced HR services tailored to our clients’ needs. Our full array of offerings includes managed payroll, employee benefits administration, and HR consulting and support services, such as training, compliance, and Hiring Process Management™, our comprehensive recruitment service that takes you from finding to onboarding new talent. Our major markets are fast-growing small- and medium-sized businesses, many of which are venture-capital-backed; foreign companies expanding into the states; and charter schools. Partner with us to reduce your administrative costs, minimize your legal risk, find and develop talent, and alleviate the HR burden so you can focus on your core business.