Get ready Ohio, on April 9, 2025, Ohio will implement the Pay Stub Protection Act. This legislation was introduced to the as House Bill 106 with new requirements for employers regarding the provision of detailed pay statements to their employees. This legislation will enhance transparency in wage reporting for employees. It will also ensure that employees have access to comprehensive information about their earnings and deductions.
How does this affect how you are processing your employees’ paychecks? As small business owners, can we rely on our payroll software to make these changes? What do we need to know if we process payroll in house? We have the answers below.
Key Requirements of the Pay Stub Protection Act
Under the new law, employers in Ohio must provide each employee with a detailed pay statement. According to SHRM “the new law applies to every employer in Ohio with at least one “employee,” broadly defined as “any person who performs a service for wages or other remuneration for an employer.” After April 9th, every pay stub must include the following information for each pay period:
- Employer and Employee Information:
- The employer’s name.
- The employee’s name.
- The employee’s address.
- Wage Information:
- The total gross wages earned during the pay period.
- The total net wages paid for that period.
- Deductions and Additions:
- A detailed list of any amount added to or deducted from the employee’s wages, along with a brief description of the reason for each adjustment.
- Hours Worked (for hourly employees):
- The total number of hours worked during the pay period, including any overtime hours.
- The employee’s hourly wage rate.
- Pay Period Details:
- The date the employee was paid.
- The pay period is covered by the payment.
What Happens If Employers Fail to Meet the New Pay Stub Protection Act?
If an employer fails to provide this information during a pay period, employees have the right to submit a written request for their pay stub. Employers are then required to respond within 10 days. Should an employer not comply, employees can report the violation to the Ohio Department of Commerce, which may investigate and issue a notice of violation to the employer.
Steps for Employers to Avoid Penalties
To avoid these consequences, employers should:
- Review and update payroll systems to ensure compliance with the new detailed pay stub requirements.
- HR and payroll must work together to handle employee requests for pay statements promptly.
- Conduct internal audits to identify and rectify any gaps in their payroll reporting process.
By taking proactive measures, employers can minimize the risk of non-compliance and ensure they meet the requirements of the Pay Stub Protection Act.
Implications for Small Businesses in Ohio
Employers must prepare for these changes by reviewing their current payroll practices and ensuring that their pay statements comply with the new requirements. This includes updating the payroll systems and training HR personnel to handle requests for pay statements effectively. Non-compliance can lead to penalties, although employees do not have an independent cause of action against employers for failing to provide the required pay stubs.
How Can ClarityHR Help You Review Your Payroll Compliance
The Pay Stub Protection Act represents a significant shift towards greater pay transparency in Ohio. All small businesses must align HR with payroll to ensure that employees receive detailed information about their wages and deductions. The law aims to foster trust and accountability in employer-employee relationships. Small Businesses should take proactive steps to align their practices with these new requirements before the April 2025 deadline.
If you have questions about the Pay Stub Protection Act, you can always reach out to our team. Contact Us today, and let’s make sure your paychecks are compliant.