Maintaining accurate and transparent payroll records is crucial for both employers and employees. One essential document that ensures transparency and compliance with labor laws is the paystubs, or check stub. This document provides detailed information about an employee's wages, deductions, and other relevant information.
To avoid legal issues and comply with regulations, employers must understand the legal requirements for pay stub templates – in this article, we will cover everything you need to know about what to include on your pay stubs and how using templates and a check stub maker can ensure compliance.
Required Information in Pay Stub Templates
While the specific information may vary by jurisdiction, several key elements are typically mandated in pay stubs. These include:
- Employee information: The pay stubs should include the employee's full name, address, and Social Security number or employee identification number.
- Employer information: The employer's legal name, address, contact information, and employer identification number.
- Earnings: Check stubs should clearly display the employee's gross wages for the pay period, along with any additional earnings such as overtime, bonuses, or commissions.
- Taxes: Paystubs should detail the deductions made for federal, state, and local taxes, including income tax, Social Security tax, and Medicare tax. Some jurisdictions may also require additional tax-related information to be included.
- Deductions: Any other deductions made from the employee's wages, such as healthcare premiums, retirement contributions, or wage garnishments, must be clearly outlined on the pay stubs.
- Net pay: The net pay i.e., the amount the employee receives after all deductions and taxes have been subtracted, should be clearly stated.
- Pay period: The start and end dates of the pay period.
- Hours worked: For hourly workers, the pay stubs should include the number of hours worked during the pay period.
Federal Law on Paystubs
There is no federal law concerning pay stubs – the IRS simply requires employers to keep accurate records of pay information for at least four years from each year’s tax filing. Pay stub requirements are decided by each state.
State-Specific Requirements for Pay Stub Templates
Pay stub requirements can vary significantly from state to state. Some states have additional information that must be included while others may not mandate pay stubs at all. To ensure compliance, employers should be aware of the specific regulations in the states in which they operate.
Are Pay Stubs Required in My State?
Some states do not require employers to provide pay check stubs; others must provide printed pay stubs, while others have the option of providing electronic access. There are also opt-in/opt-out states.
No Requirement States
In the states listed below, you do not have to provide pay stubs:
- South Dakota
In these states, employers must provide pay stubs – these may be in digital form or printed:
- New Hampshire
- New Jersey
- New York
- North Dakota
- Rhode Island
- South Carolina
- West Virginia
In the following states, employees must have printed copies of their paystubs:
- New Mexico
- North Carolina
Opt-In and Opt-Out States
In opt-out states, employers must supply printed paystubs – unless the employee asks to receive them digitally instead. Currently, the only opt-out state is Hawaii.
Opt-in states work in reverse – the employee will get electronic pay check stubs by default and may request printed copies. The three opt out states are Delaware, Minnesota and Oregon.
Pay Stub Frequency
Since different states have different regulations about how often employees get paid, the requirements for paystub frequency also vary. Employers must supply check stubs for every pay date, so if your state mandates monthly pay periods, you will need to generate paystubs monthly.
A few examples of pay periods in different states are as follows:
- Alaska: Employees must be paid monthly or semi-monthly.
- Arizona: Employees must be paid at least twice per month, at a maximum of 16 days apart.
- California: Here, the frequency of pay depends on the employee’s profession.
- Louisiana: Companies that have 10 or more employees that work in manufacturing, mining or boring for oil are required to be paid semimonthly (typically on the 15th and last day of the month).
- North Carolina: Employees can be paid daily, weekly, twice per week, twice per month, or monthly.
- Pennsylvania: Employers are free to decide the pay date each month.
- Texas: Most employees are entitled to be paid twice per month.
In states such as North Carolina where pay dates may be weekly, it’s much more efficient to use an instant paystub generator to keep on top of things and stay compliant.
Pay Stub Information by State
Another requirement to be aware of is what to include on your pay stubs. Some states require more comprehensive information, while others are more minimal. Here are some examples:
- Texas: Here, the pay stubs must display hours and dates worked, deductions, net pay, the employee’s name, and the employer’s name and address.
- California: Hourly rate, number of hours worked by category (i.e., standard pay, double time, overtime), the employee’s name, and the employer’s name and address.
- Colorado: Gross pay, deductions and withholdings, net pay, the dates of the pay period, the employer’s name and address, and the employee’s name or social security number.
- Illinois: Gross pay, number of hours worker, rate of pay, overtime pay and number of overtime hours worked, itemized deductions, and year to date itemized deductions.
Using Pay Stub Templates for Compliance
To streamline payroll processes and ensure compliance with legal requirements, businesses can use pay stub templates – pre-designed forms that contain the necessary fields for the pay-related information. These templates can be customized as per the employer's needs.
Using a paystub template offers several benefits:
- Accuracy and consistency: Templates help maintain consistent formatting and ensure that all required information is included accurately.
- Time and cost efficiency: Templates allow employers to save time and resources that would otherwise be spent creating pay stubs from scratch.
- Record-keeping: Pay stub templates provide a standardized format for organizing and storing payroll records, which are essential in the case of audits or disputes, and makes it easier to comply with record-keeping requirements.
- Compliance across multiple states: Pay stub templates are often designed to comply with specific state requirements, minimizing the risk of legal issues. This is especially beneficial for companies operating in multiple states, as it helps ensure that the right information is used for each jurisdiction.
What Are the Consequences of Not Complying with Paystub Laws?
Again, the penalties for non-compliance depend on the states in which you operate. California and New York are among the strictest states. In California, failing to provide pay stubs incurs a penalty – for each employee. In the first instance, the fine is $50 and increases to $100 for any further violations. The maximum fine per violation is $4,000 – again, per employee.
The fines in New York are charged per employee per day, up to an amount of $250. It may be possible to avoid these fines if the employee was in fact paid and just hasn’t received the pay stubs. If the employee files a lawsuit, the penalty can reach $5,000 per employee.
Understanding the legal requirements for pay stub templates is of utmost importance for employers to maintain transparency, compliance, and positive working relationships with their employees.
Key elements that are typically mandated in pay stubs include employee and employer information, earnings, taxes, deductions, net pay, pay period, and hours worked. However, pay stub requirements can vary significantly from state to state, so make sure you understand the rules that apply to any jurisdictions in which you employ people.
Pay stub templates are valuable, helping to ensure accuracy, consistency, time and cost efficiency, and simplified record-keeping. These templates can be customized to meet the needs of individual businesses while ensuring compliance with state requirements.
The easiest way to make use of paystub templates is by using an online check stub maker. At Real Check Stubs, we provide an instant paystub generator with a range of professional templates. Once you’ve created your pay check stubs, simply download them or email them in seconds. Get started here.