Ask the Payroll Expert: Electronic W-2 Forms

Question: We have employees in several states and would like to require that all employees (current and future) have an accessible email account so we can electronically provide all Form W-2s and pay stubs. Can we do this?

Answer: A best practice would be for your company to establish a secure, company-wide email system for all employees to access and/or receive all company communications, Form W-2s, pay stubs and more. Federal Form W-2 compliance requirements are complex and require attention to detail, so consider working with a payroll vendor to implement an electronic system for wage statements and W-2s.

Note that if you allow employees to use a personal email address for business purposes, they must give you consent to use that personal email address. Consider also that this usage triggers the issue of whether an employee must be paid for the time he or she spends reading emails from work on a personal account (as compensable hours).

Employers may set up a system to furnish Forms W-2 electronically. Each employee participating must consent (either electronically or by paper document) to receive his or her Form W-2 electronically, and you must notify the employee of all hardware and software requirements to receive the form. You may not send a Form W-2 electronically to any employee who does not consent or who has revoked previously-provided consent.

To furnish Forms W-2 electronically, you must meet the following disclosure requirements and provide a clear and conspicuous statement of each requirement to your employees:

• The employee must be informed that he or she will receive a paper Form W-2 if consent is not given to receive it electronically.
• The employee must be informed of the scope and duration of the consent.
• The employee must be informed of any procedure for obtaining a paper copy of his or her Form W-2 and whether or not the request for a paper statement is treated as a withdrawal of his or her consent to receiving the Form W-2 electronically.
• The employee must be notified about how to withdraw a consent and the effective date and manner by which the employer will confirm the withdrawn consent.
• The employee must also be notified that the withdrawn consent does not apply to the previously issued Forms W-2.
• The employee must be informed about any conditions under which electronic Forms W-2 will no longer be furnished (for example, termination of employment).
• The employee must be informed of any procedures for updating his or her contact information that enables the employer to provide electronic Forms W-2.
• The employer must notify the employee of any changes to the employer’s contact information.

You must furnish electronic Forms W-2 by the same due date as the paper Forms W-2. You will also need to review any state laws that may be applicable.

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