Welcome to the April issue of the Mize Payroll Newsletter! Before we get to the state-by-state updates, we’d like to spend a little time talking about direct deposit, pay cards, and electronic pay stubs.

The Benefits of Paying Employees Electronically

It’s really convenient to pay all of your employees through direct deposit. If they have a bank account, paychecks are electronically deposited directly into that account. Wages for employees who don’t have a bank account are transferred to a debit card that can be used just like any other bank debit card. Employees can access an electronic version of their pay stub by logging into their payroll portal account. Less paper is always a good idea, right?

Another benefit of utilizing electronic pay methods is the elimination of unclaimed property. If an employee doesn’t pick up a paycheck, the employer is required to make extra effort to find the employee and annually report to the state any checks that remain unclaimed. With direct deposit, once the employee’s paycheck is transferred to their account on payday, you’re done! If the employee abandons that account, it’s the bank’s problem, not yours.

When you pay employees electronically, they’re paid on time. You don’t have to worry about weather delays, delivery service strikes, incorrect addresses, or lost mail.

And electronic pay reduces your exposure to fraud. Anytime your company’s bank account information is made public (like on a paycheck), it can be used in nefarious ways.

Your State Laws May Differ

While federal law and all states allow employees to be paid by direct deposit, states vary on their rules governing direct deposit and electronic pay statements.

All states allow employees to be paid electronically. However, states differ on whether the employer can require employees to utilize direct deposit. Two common provisions shared by many states include:

Employees must be permitted to select the financial institution that will receive the direct deposit.
Employees must consent to direct deposit voluntarily and (in some states) in writing.

When it comes to pay statements, state laws differ quite a bit. Some states require written, printed, or printable statements, some only require access to statements, some require employee consent before providing paperless statements, and a few states have no specific laws covering pay stubs.

Here are states that have no requirement that pay statements be in writing, only that employees must be able to access their statements. This means that employers can comply with state requirements by issuing electronic (i.e., paperless) pay statements:

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

The following states have no requirement that employers provide a pay statement to employees, though it’s considered a good practice to do so. Since there’s no required format or manner of delivery, electronic pay statements are acceptable:

Alabama
Arkansas
Florida
Georgia
Louisiana
Mississippi
Ohio
South Dakota
Tennessee

If your state isn’t listed above, it means your company needs to comply with additional requirements. We’ll cover those requirements in a future newsletter!

For more information about your state’s requirements, visit with your Mize payroll professional. We’re here to help!

State By State News

Idaho

The Idaho Department of Labor encourages employers to sign up for the SIDES E-Response program, which allows employers to respond to unemployment notices electronically. More information is available here.

Massachusetts

The Department of Revenue has issued updated withholding tables that reflect a 4% surtax on wages above $1,000,000 in a year. The updated instructions cover the calculation of withholding for supplemental wage payments such as bonuses.

Maryland

New legislation has just passed requiring Maryland employers to provide employee wage statements each pay period either on paper or electronically. Pay statements must include the following information:

Employer’s name, address and contact information
Dates of payment and pay period
Hours worked
Rates of pay
Gross and net pay
Deductions
Additional types of pay (i.e. commissions or bonuses)
Piece rates of pay for piece-rate employees

Mize current pay statements are in compliance with these standards and are available to all employees electronically through the payroll portal, so encourage employees to sign up and minimize employer printing and shipping charges.

The same legislation also mandates that employers inform new employees of their rate of pay, regular paydays, and leave benefits when they are hired. Changes to check dates or wages must be communicated to employees in advance, but increases may be done without notice.

Nebraska

A new law that will take effect this summer increases the penalties for employing children under age 16 in occupations that are unlawful, dangerous, unhealthy, or immoral.

New Jersey

The Division of Taxation has updated its withholding tax guide for employers to address withholding state income tax for residents working outside of the state.

South Carolina

Beginning March 1, 2024, employers with 10 or more employees must respond electronically to unemployment claim information requests. In addition, employers with 10 or more employees are now required to file quarterly unemployment insurance reports electronically. The previous threshold was 100 or more employees.

Vermont

The ACH credit guide for employers has been updated, including instructions and examples for setting up an account.

A new booklet on the Child Care Contribution (CCC) has been published.

Virginia

Civil penalties for child labor law violations are increased under a new law effective July 1, 2024.

Washington

Washington Saves. A bill creating a new mandatory retirement program called Washington Saves was signed by the governor in late March. This mandatory retirement program will require employers to allow employees to make automatic payroll deductions into an IRA. Covered businesses include:

Companies located in Washington for at least two years;
With employees who work a combined minimum of 10,400 hours during the previous calendar year;
That do not currently offer a qualified retirement plan to their employees.

Employees may opt out of the program.

The legislation establishes a governing board to design, implement, and oversee the new initiative, with a goal of launching the program by July 1, 2027.

Bellingham Minimum Wage Increase. Beginning May 1, 2024, Bellingham’s new local minimum wage will move to $17.28 per hour, which is $1 higher than the current state minimum wage.

Effective May 1, 2025, the local minimum wage will increase to a level that is $2 higher than the state minimum wage. Beginning January 1, 2026, it will be adjusted annually to remain $2 higher than the state minimum wage. This minimum wage applies to all hours worked within the city except for public employees of the city and workers exempt from the state minimum wage.

Wisconsin

Beginning September 1, 2024, Wisconsin employers will be able to offer earned wage access (EWA) to their workers. Providers must be licensed in order to provide EWA services in the state. EWA providers may not share any revenues with employers in order to offer the service.

When it comes to Mize Payroll 2.0, Ann knows it all! Check out her latest 2.0 tips:

Tips & Tricks: Emailing Employees Through Payroll

Have a tip or trick you'd like Ann to cover? Let her know, ahobart@mi zecpas.com

Tools You Can Use

Electronic Pay Solutions

Employees like to get paid on time. Sometimes that’s harder than it might seem. With delivery issues, severe weather, and wildfires frequently in the news and maybe even your back yard, getting paychecks to employees can be difficult. That’s where electronic payroll solutions like direct deposit and pay cards can be a great solution.

Electronic pay solutions can also save you money. The costs of both printing and delivery are going up, which increases your payroll fees. With direct deposit and pay cards, employees can access their pay stubs and year-end Forms W-2 and 1095 online through the Mize payroll portal.

Read more about the benefits of electronic pay from our Insights blog by clicking here.

Earned Wage Access

Even if employees get paid on time, sometimes that money doesn’t stretch until the next payday. Stuff happens – the washing machine overflows, the car breaks down, or somebody gets sick. Sometimes employees need money sooner than later, but there aren’t a lot of great options. Payday loans, overdrawing their checking account, and incurring credit card debt can chock up high fees. The employer can give a pay advance or loan, but that can put you in a difficult position.

That’s where an Earned Wage Access (EWA) program can help. EWA programs are a new employee benefit that advances employees a certain amount or percentage of their accrued wages. The employee’s next paycheck is automatically reduced by the advanced amount, with no risk or liability to the employer.

For more information about ZayZoon, the EWA program offered through Mize CPAs, click here or visit with your Mize professional.

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