Feb 19, 2024
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All you need to know about payslips in the USA
Introduction
A payslip is a written statement documenting wage details given to an employee to show how much they have earned in a particular period and any deductions that may have been made in their pay. In the United States of America, a payslip is called a pay stub, pay statement or a wage statement.
Laws
The federal law of the United States of America does not compel employers to provide a payslip to their employees. However, the Fair Labor Standards Act (FLSA) states that payroll and hourly labor records must be maintained by employers. This implies that the company has the option to provide the worker access to view paychecks. It is important to note that each state has different laws regarding payslip access in America.
States are of three types:
Access states - These states mandate employers are required to provide some type of stub, either electronic or paper.
States:
- 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
- Print states - States permit employers to give stubs in paper or electronic format, but employees receiving electronic stubs need to be able to easily view or print them.
States:
- California
- Colorado
- Connecticut
- Iowa
- Maine
- Massachusetts
- New Mexico
- North Carolina
- Texas
- Vermont
- Washington
- States with no requirements - these states do not require the employers to provide a pay slip.
States:
- Alabama
- Arkansas
- Florida
- Georgia
- Louisiana
- Mississippi
- Ohio
- South Dakota
- Tennessee
Furthermore, states can be ‘opt-out’ or ‘opt in’.
- Businesses delivering paycheck stubs in opt-out states are required to obtain employee agreement before making any changes. If a worker prefers the old procedure, they have to follow it. Delaware, Minnesota and Oregan are opt-out states.
- Employers are required to provide paper stubs in opt-in states unless an employee requests to receive the stub electronically. Hawaii is the only opt-in state.
Information required on a pay slip
- Wage
- Hours worked
- Gross earnings before deductions
- Net earnings after deductions
- Pay period
- Name of employer
- Employee name
- Payment information
- Allowances (if any) claimed as part of the minimum wage
- Withholding for Social security and Medicare insurance and income tax
These requirements are subject to change with state and industry.
Consequences
Depending on local law, non-compliance can have different costs and consequences. In New York, for instance, workers who fail to get accurate pay stubs may be able to claim penalties of up to $250 for each infraction and $5,000 for each worker.
Pay stubs are not a legal requirement for employers; nevertheless it is considered good practice to grant access to employees so they can see their records upon request, especially in states with no requirements to provide a payslip.
Providing payslips is a means of ensuring transparency and accountability in a workplace and in turn plays a crucial role in employee satisfaction and performance.