Posted on September 1, 2015

paperless payroll for business

Now more than ever, businesses are looking for ways to go green, while also maintaining security. Doing away with paper pay stubs and checks in favor of an online portal is a great way to do just that. What’s more, the majority of employees today prefer direct deposit and receiving their check stubs electronically.

Why should I switch to direct deposit and paperless?

1. Give employees what they want

76% of employees say they would prefer to view their pay stub electronically, according to a recent APA survey. 53% say their company already does this and they like it. Not only are online check stubs a good way to save paper, but they are also very popular with employees. Mobile apps that allow employees to view their pay details securely from anywhere are equally as popular.

2. Reduce paper waste

According to the same APA survey, 43.9% of American wage earners receive a paper pay stub. That adds up to approximately 1.8 billion paper check stubs each year. That’s 3.6 million reams of paper and more than 200,000 trees. Switching to online check stubs is a simple way to reduce your company’s carbon footprint by eliminating the need to use all that paper.

3. Keep your information securely accessible

There are many benefits to switching from paper paychecks to online check stubs, including security. You never know where paper pay stubs may end up, which means your employees’ sensitive information could be at risk. An online system allows employees to view their pay stubs securely and on their own time. Online check stubs along with online reports also mean no delivery fees or lost records.

4. Keep everything up to date

Using checks means that an employee who is sick or on vacation doesn’t get paid until they come back to work. Employees like being paid immediately whether they are in the office on payday. Moreover, bookkeeping will be immediately up to date; you don’t have to wait until everyone cashes their check for the books to balance.

Direct deposit sounds great! Can I require my employees to use it?

96% of U.S. employees receive their paycheck via direct deposit, according to an American Payroll Association survey. There are many benefits of having direct deposit. But can this useful, popular deposit method be a requirement for your employees?

Depending on the state laws, employers can require their employees to receive payments via direct deposit. Sometimes receiving direct deposits can even be included as a condition of employment in some states. The restrictions are:

  1. No employer can require an employee to use direct deposit at a specific bank.
  2. Employers aren’t allowed to charge employees fees based on payment method.
  3. Employees must have access to their pay stubs.
  4. If an employee does not have a bank account, direct deposit payments can still be made via a [paycard](

So if we use direct deposit, I’m done with paper, right?

If you provide direct deposit to your employees, you may also be required to provide them with a pay stub if it’s required in your state. Federal law does not mandate pay stubs for workers, but the Fair Labor Standards Act requires employers to keep accurate records of employees’ wages and hours worked. Your state might not require employer-issued pay stubs, but an employee has the right to request payroll records.

So I don’t have to provide paper check stubs though. Right?

Printed pay stubs are mandatory in several states: California, Colorado, Connecticut, Iowa, Maine, Massachusetts, New Mexico, North Carolina, Texas, Vermont, and Washington. However, most states now allow employers to use electronic pay stubs as long as three standards are met:

  1. Employees can access the pay stub electronically
  2. Employees have a unique, secure login
  3. The pay stubs can be printed out

Several states do not require you to provide pay stubs all: Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Ohio, South Dakota, and Tennessee. The remaining states require some type of pay stub, whether in print or available electronically, such as Paycor’s Online Check Stubs or Employee Mobile app.

Going paperless is a simple change that can make an impact on your company’s security and employee satisfaction, as well as our environment. Get in touch with us to find out how Paycor can streamline your payroll process.

Related articles:
Can I Require My Employees to Use Direct Deposit?
6 Reasons Your Employees Will Access Your Payroll & HR Software
Paper or Plastic? The Pros and Cons of Paycards