2019 Payslip Legislation
The month of April welcomes a number of legislative changes that you will be expected to adapt to, including the fact that the right to an itemised pay statement will be extended to include those who qualify as ‘workers’.
Currently, only ‘employees’ have a statutory right to receive a written itemised payslip, which must be issued either before or at the time their salary is paid. Payslips can be provided either physically or digitally and must contain specific information as outlined in the Employment Rights Act 1996. This includes an employee’s gross salary, any fixed deductions made such as tax and National Insurance contributions and their final net salary.
From 6th April this entitlement will be extended to include both ‘employees’ and ‘workers’, an umbrella term which includes zero-hours’ workers, casual workers, and agency workers. This means that many organisations, who have not been required to issue payslips to staff in the past, may have to amend their business practices accordingly. For pay reference periods starting on or after 6th April, you will also need to include the total number of hours worked which results in the payment being made on payslips for staff whose pay varies depending on the amount of time they have worked. This does NOT affect employees who are paid a standard salary, but will include any additional payments made i.e. overtime needs to be broken down into hours.
Eligible individuals have a legal right to receive their payslip on time and you will be in breach of this right if you fail to meet this requirement. This applies where the statement is not provided at all, a statement is provided but does not contain all the required information, or there is a dispute over the accuracy of the information contained within the statement.
Failing to provide an individual with their payslip on time could result in a standalone application to an employment tribunal. Where the tribunal finds the pay statement hasn’t been provided, or a statement has been given but doesn’t contain all required information, the tribunal can make a declaration that the employee’s right has been breached. In these situations, you may also face a penalty equal to the amount of un-notified deductions, lawful or otherwise, made from the individual’s salary.
It is likely that you already provide us with this information, however if you do make ANY payments to your staff that are not a set salary then you WILL need to provide us with a breakdown of the hours and rate of pay for those hours.
If you would like to discuss your payroll needs with Simpson Wood, or require further clarification, then please don’t hesitate to contact a member of the payroll team.