5 Important Payroll Stub Laws That All Employers Should Know

Jan 24, 2020


Anyone who's ever found themselves on the wrong side of the Labor Department or the Internal Revenue Service will be the first to tell you that few things can prove to be as significant of a setback to a business.

That's why it's so crucial that you make sure that your payroll process is happening according to law and your payroll stubs to follow suit. If not, then you could easily be looking at a hefty fine should you ever get audited and the discrepancy is discovered.

Payroll law isn't the easiest thing in the world, which is why we've created this article to help you get started.

Think State, not Federal

Although there are lots of federal labor laws, there are very few federal laws that regulate payroll stubs. In fact, issuing payroll stubs are not a federal requirement.

That's because the federal government leaves this up to the state governments' discretion. Each state has varying rules on how pay stubs should be administered, so be sure to check your state's Labor Department to uncover the laws in your region.

1. Opt-in

In 2020, there is pretty much no reason to use a paper-based payroll strategy. It's wasteful and environmentally harmful, not to mention more difficult for you to process and more inconvenient for your employees. You should be using a software tool. Click here to learn more about Paystub creator.

In some states, however, employees have to opt-in to order to use any electronic system that documents their pay information. If such is the case with your state, make sure you get written confirmation from your employees before you start sending them electronic payroll stubs.

2. Contact Information

The next thing that may be legally required to have on your payroll stub is contact information. All employees have the right to raise pay disputes, and the stub should indicate who the employee should talk to if they so desire.

3. All Stubs Readily Accessible

Some states require that companies house all historic information about an employee's pay at the company. This is why you should always keep all payroll related documentation backed up in the cloud.

4. Withholdings if Requested

If an employee requests, your state may legally require you to include federal and state tax withholdings on their payroll stub. This means that you will need to send this money to the IRS as well.

5. Private to Your Employee

Last but certainly not least, your employee's pay information is private to him or her. You are not allowed to share it with random people in the company without them approving it first. This depends on how your organization is structured.

Payroll Stub Laws are Important

It's important that you adhere to payroll stub laws in order to keep your business on the right side of the government. Make sure to consult an expert in your region or visit your state's Labor Department website to learn more about the requirements specific to your area.

For more business advice, be sure to check out the rest of the articles on the website!

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