Pay Stub Requirements By State

You pay your employees on time. But do you give them a pay stub as well? Providing pay stubs is not only good business practice but also legally required in most states. Read on to learn why pay stubs are important, federal law’s position on pay stubs, and pay stub requirements by state.

What is a pay stub — and why is it important?

Also called a “wage statement,” a pay stub breaks down an employee’s gross-to-net wages for the covered pay period. It is basically a receipt (given to the employee) for the wages paid. Pay stubs reveal the employee’s gross wages, deductions, and net/take-home pay. They are given directly to employees in electronic or paper format. Moreover, they serve as proof that the wage payment was made, plus supply details of that payment. Along with being an informational tool for employees, pay stubs can act as proof of income for securing a:

• Home loan
• Rental property
• Personal loan

Employees can also refer to their pay stubs when filing their annual tax returns. If employees do not receive a pay stub each time they are paid, they may become confused about how you arrived at their take-home pay. This can lead to them contacting the payroll department with questions, which could have been answered by the pay stub.

Does federal law require employers to provide pay stubs?

The federal law in question here is the Fair Labor Standards Act (FLSA) — which governs minimum wage, overtime, child labor, and record keeping laws for private-sector businesses.

The United States Department of Labor says, “The FLSA does require that employers keep accurate records of hours worked and wages paid to employees. However, the FLSA does not require an employer to provide employees pay stubs.” So, federal law does not mandate pay stubs. But the catch is that it requires you to “keep accurate records of hours worked and wages paid to employees.” Pay stubs can help you meet this obligation. Before you start issuing pay stubs, make sure you check state law for any requirements.

What are the state-mandated pay stub requirements?

Below are factors that drive pay stub requirements at the state level:

• States with no pay stub laws
• States that require access to pay stubs, either electronically or by paper. If electronically provided, employees must be able to easily access or print their pay stubs.
• States that require written or printed pay stubs.
• States that require electronic opt-out. Employees must be given the opportunity to receive their pay stubs in paper format even if the employer prefers to deliver them electronically.
• States that require electronic opt-in. Employees must opt-in to get their pay stubs electronically.

States with no pay stub laws

• Alabama
• Arkansas
• Florida
• Georgia
• Louisiana
• Mississippi
• Ohio
• South Dakota
• Tennessee

States that require access to pay stubs

• Alaska
• Arizona
• Idaho
• Illinois
• Indiana
• Kansas
• Kentucky
• Maryland
• Michigan
• Missouri
• Montana
• Nebraska
• Nevada
• New Hampshire
• North Dakota
• New Jersey
• New York
• Oklahoma
• Pennsylvania
• Rhode Island
• South Carolina
• Utah
• Virginia
• West Virginia
• Wisconsin
• Wyoming

States that require written or printed pay stubs

• California
• Colorado
• Connecticut
• Iowa
• Maine
• Massachusetts
• New Mexico
• North Carolina
• Texas
• Vermont
• Washington

States that allow employees to opt-out of receiving electronic pay stubs

• Delaware
• Minnesota
• Oregon

State that require employees to opt-in to receive electronic pay stubs

• Hawaii

Alaska

• Pay period starting and ending dates
• Rate of pay
• Gross wages (or salary)
• Straight-time hours
• Overtime hours
• Payroll taxes plus any other mandatory deductions
• Voluntary deductions (meaning those the employee authorized)
• Net pay

California

• Pay period dates covered
• Gross wages
• Number of hours worked (does not apply to salaried-exempt employees)
• Piece-rate units earned and piece rate payment, if applicable
• All mandatory and voluntary deductions
• Net wages
• Employee name
• Last 4 digits of the employee’s Social Security number or an employee identification number
• The employer’s legal name and address

Massachusetts

• Employer name
• Employee name
• Payment date
• Number of hours worked during the covered pay period
• Hourly pay rate
• All wage deductions and increases made within the pay period

Minnesota

• Employee name
• Hourly pay rate, if applicable
• Total number of hours worked during the pay period, unless the employee is exempt
• Total gross pay
• A list of the deductions taken out of the employee’s gross pay
• Net pay
• Pay period ending date
• The employer’s legal name, and their operating name if different from their legal name

New York

• Employee name
• Employer name, address, and phone number
• Pay period dates covered
• Number of regular and overtime hours worked
• Pay rates (regular and overtime)
• Gross wages
• All deductions from gross wages
• Itemized credits or allowances applied against wages
• Net wages

You’ll notice that some states are more detailed than others in what should go on the pay stub. This is why it’s very important that you check your state’s pay stub requirements. Note that some states do not go into detail at all. They only briefly state the requirements. For example, North Carolina’s statute simply says, “Furnish each employee with an itemized statement of deductions made from that employee's wages under G.S. 95-25.8 for each pay period such deductions are made.” Oklahoma’s statute says, “With each payment of wages earned by such employee, the employer shall issue to such employee a brief itemized statement of any and all deductions therefrom.”

What are the best practices for generating pay stubs?

• Put all of the information required by state law on the employee’s pay stub.
• If your state’s requirements aren’t exhaustive enough, fill in the gaps.
• Provide just enough information for the employee to decipher how you arrived at their take-home pay.
• Do not crowd the pay stub with irrelevant information, as this will likely make it harder for them to understand the statement.
• Include information that will help you meet the FLSA’s record keeping requirements — such as hours worked each day, hourly rate, deductions from wages, and total wages paid each pay period.
• Keep your pay stub design simple and easy to read. This is not the place for flashy graphics.
• Consider making a glossary of pay stub terms available to your employees. For example, give brief descriptions for abbreviations like FIT, FICA, Med, SS, SIT, YTD, and for phrases like “Voluntary Deductions,” “Employer Contributions,” “Pretax Deductions,” “After-Tax Deductions,” and “Net Pay.” This can help improve employees’ knowledge of their paychecks.
• Use payroll software that automatically generates pay stubs based on the employee’s payroll data for the covered pay period.

What are the penalties for not complying with pay stub laws?

States can impose penalties on employers who violate pay stub requirements. For example, in California, failure to provide pay stubs is considered a misdemeanor. It also comes with a civil penalty of $50 for the first violation against the employee. The penalty increases to $100 for each subsequent violation, up to a maximum of $4,000 (per employee). In New York, employers who fail to provide pay stubs may be liable for damages of up to $250 per day, per employee, unless they paid their employees as required by law. If the employee files a civil lawsuit, then the maximum damages are $5,000 per employee. All things considered, it’s best to provide pay stubs even if you’re not legally required to.