Your Paystub is Not Regulated: Why Pay Transparency Matters

The images speak for themselves. Everyone's paystub is different. This did not happen by accident — employers made it this way.

In addition to transferring over 21 million employment records and building connections into hundreds of employee portals, Argyle is also being used as the repository for paystub records. It got us thinking — why do employers provide different levels of pay transparency to their own employees about how their earnings are calculated? The answer — The Fair Labor Standards Act of 1938 does not set a requirement to provide a paystub to any worker.

If you are reading this and find it hard to fathom that there are no federal guidelines on providing transparency into their earnings to any worker in the United States, trust your instincts. Each state has the option to set guidelines for employee pay transparency. Only twenty-six states have any type of guidelines; only eleven states require calculation level transparency; today in Florida employers don’t have to provide any kind of paystub.

If you are a lender, bank, credit bureau, insurer, underwriter, car dealership, accountant, attorney realtor, or recruiter, this should be an alarm bell — how can your business run effectively if your customers do not have standardized access to the records of their earnings? This complete lack of standards for employee accessible paycheck records has produced a patchwork of manual administrative processes such as calling and mailing employers or leveraging third-party data agencies like Equifax to obtain information that could all be provided by the employees themselves.

Structurally there is no reason for even the most detailed and sanitized physical paystub to exist. The raw data inside of these paycheck record documents is what everyone, including employees, is really after. Elements such as gross earnings, deductions, health care costs, hours worked, overtime and net pay are simple numerical values that can be displayed on any digital paystub or transferred securely with ease. But without a set of agreed-upon standards, businesses are going to continue operating with fractured processes.

Argyle has an intrinsic interest in enhancing the standards around paystub records and pay transparency; our goal is to provide a universal, consumer-controlled, digital access point to employment records in an impactful and organized way. But even without Argyle both businesses and employees would benefit from more transparency into one's earnings. It would open up access to credit and expand the ability for employees to apply for loans, cars, and homes.

If you are interested in enhancing transparency into employee data — through a paystub or otherwise — come join us as a client, employee, or advisor.