Changes to Payslips – April 2019

March 13, 2019, By

Currently, an employee (but not other types of worker) is entitled to be given a written itemised pay statement by his employer at or before the time any wages are paid to him. Under s.8 of the Employment Rights Act 1996 (“ERA”), the statement must contain particulars of:
• the gross amount of wages
• the amounts of any variable and any relevant fixed deductions and the purpose for which they have been made
• the net amount of wages
• where different parts of the net amount are paid in different ways, the amount and method of payment of each part
However, new legislation in force from 6 April 2019 amends s.8 ERA and will require all employers to (a) provide payslips to all workers (and not just employees), and (b) show hours on payslips where the pay varies by the amount of time worked.
This comes in the wake of the Taylor review of modern working practices in 2017 which, amongst many other things, called for clarity on legislation surrounding categories of workers and pay, including National Minimum Wage and National Living Wage.
The new requirement for an itemised pay statement to contain information regarding the number of hours worked by an employee for which they are being paid is only in situations where the employee’s pay varies as a consequence of the time worked.
The government has released some guidance on this and confirms that where pay varies depending on hours worked; –
• the number of hours paid for on this basis (i.e. on the amount of time worked) must be shown
• any other hours do not need to be shown, but can be shown if it would be helpful to do so (for example, where a worker has a fixed salary each month, and works variable overtime with additional pay at an hourly rate, only the hours of overtime need to be shown)
• the hours can be shown either as a single total of all such hours in the pay period, or they can be broken down into separate figures for different types of work or different rates of pay
• it should be made clear which pay period the hours were worked in
• the hours paid for only need to be shown for pay periods which begin on or after 6 April 2019.
The government guidance goes on to confirm that if a worker’s pay does not vary by time worked, i.e. because they are paid a fixed salary each month, there is no need to include an hourly figure to account for variations in pay caused by taking unpaid leave or being on statutory sick pay. Such cases do not amount to pay varying depending on the amount of time worked, but rather to pay varying because of a departure from the normal working and pay arrangements, caused by the unpaid leave or statutory sick pay. However, if a worker is paid according to the amount of time worked and takes unpaid leave or receives statutory sick pay, any hours they did work will still need to be included on their payslip.
The intention is that the new payslip requirements will better enable workers to understand what they are being paid and identify whether the employer is meeting its obligations in relation to minimum pay; namely payment of the National Minimum Wage and National Living Wage.
A worker who thinks that they have not received a payslip, or that the payslip they have received lacks the required information, may bring a claim before an Employment Tribunal. If the Tribunal agrees, it must make a declaration to this effect, which it may publish on its website. The Tribunal may also order repayment of un-notified deductions made in the 13 weeks preceding the presentation of the claim, even where the employer was otherwise entitled to make the deductions.