February 13, 2020
February 13, 2020
The simplest way workers can ensure their employers have paid them all they’re owed is to check their paystubs. But Ohio is among just nine states with no requirement that employers provide a pay statement to employees. Ohio Reps. Brigid Kelly and Nino Vitale want to change that with House Bill 137 to require that all Ohio workers receive a pay statement. HB 137 passed the House and is now in committee in the Senate.
The Fair Labor Standards Act requires employers to maintain payroll records, but not to share the information with workers. This lack of transparency creates both honest mistakes and opportunities to short workers on their wages. Doing so is theft.
Policy Matters Ohio has documented a quiet crisis of wage theft in Cleveland and Columbus. Employers steal wages from an estimated 217,000 Ohio workers each year through minimum wage violations alone: On average, victims lose $2,800. For workers employed by companies willing to steal from them, a paystub is a vital layer of protection.
Requiring employers to provide basic and accurate paystub information is a necessary element of preventing wage theft, but it isn’t sufficient. Even though most states require employers to provide a paystub, an estimated 20 million U.S. workers do not receive them. A landmark 2008 survey of low wage workers in New York, Los Angeles and Chicago by the National Employment Law Project (NELP) found that 57% of respondents had not received a paystub for their most recent work week, even though employers in all three cities are required to provide one. This fact underscores the need to pair policy with robust enforcement. In Ohio, we need to start by making a payroll record a right for all workers.
House Bill 137 would help workers make sure their paychecks include the full wages they earn in each pay period, and account for all the hours they work. The bill was heard last week by the Senate Transportation, Commerce and Workforce Committee. The Committee should advance HB 137 to a vote, and the Senate should pass it.
Why do working people need paystubs?
Workers need a paystub to ensure that their employers have not shorted their wages, by accident or intent. Unscrupulous employers use tactics like shorting hours worked, not paying time-and-a-half rates for overtime, and misclassifying employees as contractors. When an employer must give workers a paystub, these practices become much easier to spot. If mistakes are made in pay, they can be quickly resolved. More than half of U.S. workers have spotted an error in their paystub at some time in their careers. And if employers engage in wage theft, workers can use paystubs to document their cases and seek restitution.
Employers who don’t provide paystubs cut their employees off from participation in basic aspects of economic life. When a worker lacks proof of income, securing everything from a car loan to an apartment may be off the table. Meanwhile, safety net programs exclude workers who can’t prove they are working.
Workers need paystubs:
According to the Northeast Ohio Coalition for the Homeless (NEOCH), receiving no paystub makes it difficult or impossible to qualify for basic services. A worker may have to go to the IRS office and ask for a record of pay, which the IRS itself may not have if the employer has not filed payroll tax forms. Traditional lenders may refuse buyers for auto loans, relegating them to buy-here-pay-here arrangements which charge higher interest. Such lenders often require family members to co-sign, jeopardizing their own credit standing if the worker’s income is disrupted: Workers who can’t prove employment get turned away for unemployment compensation when jobs fall through. Because low wage workers often work temp jobs with no guarantee of work on a given day, even NEOCH’s housing requires eight paystubs.
Paystubs help with wage and hour enforcement
Today just five wage and hour investigators and a supervisor oversee employment relationships for more than 5.6 million Ohio workers. That’s one staffer for every 932,367 workers. Without a paystub, employees are deprived of critical information to protect their rights. When a paycheck is smaller than expected, the worker may not understand why, or may believe that the balance will come in the next check. A paystub puts everyone on the same page, every earnings cycle.
Ohio provides workers with a private right-of-action in wage theft cases, meaning they can hire a lawyer and sue their employer for unpaid wages. The system places on workers the burden of retaining and paying a lawyer; excludes workers whose pay is too low to afford an attorney; and lacks punitive authority. Yet, without sufficient wage and hour enforcement the private right-of-action is a vital tool for some workers to recover stolen wages.
Workers who do not receive a paystub may not get a check to verify earnings, either. The NELP study found that 97% of employers who paid workers in cash did not provide a paystub, and employers paying cash committed minimum wage theft violations at twice the rate of those that paid by check.
Payroll debit cards profit by restricting workers’ access to information and payWhile employers who pay in cash are more likely to steal from their workers, a growing number of employers pay workers on debit cards that charge excessive fees. Some employers enroll their employees in payroll debit schemes without their consent.
What information does a paystub contain?
Most Ohio business owners follow the law and cultivate partnerships with their workforce. Providing an accurate and regular pay record establishes good faith between the company and workers, and may boost morale and productivity. It’s an essential verification that workers need to obtain credit, secure housing, and verify their eligibility for work supports.
Workers need paystubs to spot earnings discrepancies and correct any mistakes; protect themselves from employers who would steal from them; verify eligibility for public work supports; and qualify for everything from a bank account to an apartment. Withholding paystubs from workers relegates them to unofficial employment status and closes off access to participation in basic facets of economic life. The Ohio House has passed House Bill 137 to address the problem. The bill now stands before the Transportation, Commerce and Workforce Committee in the Senate. The Committee should advance HB 137, and the Senate should vote it into law.
 In 26 states, an electronic statement is enough, while 11 states require a written slip, and four states allow workers to receive a paper slip by opt-in or -out. Prime Pay, “State-by-state paystub requirements,” https://bit.ly/3btjDu9
 Vidmar, William and Hannah Halbert. “Quiet Crisis: Wage Theft in Cleveland,” August 26, 2019. https://bit.ly/2w0RU3N
 Shields, Michael. “Wage Theft: A Quiet Crisis in Ohio,” April 10, 2019. https://bit.ly/2tMOFw8
 Interfaith Worker Justice. “The goal: Paystubs for all workers,” Paystubs for all, http://bit.ly/39sjLbu
 Bernhardt, Annette et.al. “Broken Laws, Unprotected Workers: Violations of Employment and Labor Laws in America’s Cities,” National Employment Law Center, 2009. https://bit.ly/2OKOTuS
 Reinicke, Carmen. “More than 50% of US workers have had a mistake in their paycheck – here's what to do,” CNBC, November 5, 2018. https://cnb.cx/38mDIAo
 Mercado, Darla. “Here’s the reason you need to check your paystub,” CNBC, March 26, 2018. https://cnb.cx/31LErsH
 Bernhardt, Annette et.al. “Broken Laws, Unprotected Workers: Violations of Employment and Labor Laws in America’s Cities,” National Employment Law Center, 2009. https://bit.ly/2Sj0PGL
 Williams, Kalitha. “Testimony: Make sure payroll debit cards are good for workers,” Testimony to Ohio House Commerce, Labor and Technology Committee on HB 253, May 7, 2014 https://bit.ly/2OLdfVI
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