Legal Update  - Changes to Pay Slips

Legal Update - Changes to Pay Slips

PAYSLIPS

New legislation comes into force from 6thApril 2019 which will require employers to provide payslips to all workers, rather than only for employees.  The legislation includes agency workers, bank workers and those on casual and zero hours contracts.  In addition, where pay varies as a result of varying hours worked, there is a requirement to show the hours of work on the payslip.   It will not be necessary to show hours worked for salaried employees except where overtime has been worked which should be itemised.

All workers must receive payslips on or before every pay day.

The new rules will benefit casual and zero hours workers as well as staff who regularly work overtime. However, there will be more pressure on the business to ensure that you pay staff in line with the National Minimum Wage/National Living Wage or face being named and shamed by the government. It will be much easier for staff to see if they have been paid correctly.

Showing hours on payslips where pay varies by time worked

Where time worked varies as is normally the case with bank workers and those on zero hours contracts, the number of hours worked must be shown.  Any other hours do not need to be shown.  For example, where a worker has a fixed salary each month but works variable overtime with additional pay at an hourly rate, only the hours of overtime need to be shown. Likewise, 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 the payslip.

However, if a worker’s pay does not vary by time worked and they receive a fixed salary each pay period 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.  These 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.

Enforcement

A worker who believes that they have not received a payslip or that the payslip they have received lacks the required information, may bring a claim before a 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 unnotified deductions made in the 13 weeks preceding the presentation of the claim even where the employer was otherwise entitled to make the deductions.

This is separate from a claim that a worker has not been paid properly, such as a claim for unlawful deduction of wages, where other remedies are available.

Next steps

Work with your payroll provider to ensure that you are ready for the 6thApril.  

Identify any of your workforce who may be entitled to receive their first payslip in April’s payroll

If you are unsure who is an employee and who is a worker, examine the contract and their working relationship with you.  The following website can also provide advice.

www.gov.uk/employment-status/worker

If you do not currently record the number of hours your staff work, it is important that you identify those staff who will be entitled to have their hours of work itemised and prepare now for their first or next payslip.

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