As part of its campaign to protect workers, the Government has introduced new rules about payslips, which take effect from 6 April 2019.
The goal is to encourage greater transparency in pay, by helping employees and workers understand more easily how their pay has been calculated, and to work out if they have been properly paid.
What are the key changes?
The two key changes coming into effect for pay periods which start on or after the 6 April 2019 are:
1. The statutory right to receive an itemised payslip will be extended to almost all workers (as well as employees), although there will be some limited exclusions (such as members of the armed forces, or merchant seamen and women). Employers must make sure that all entitled employees and workers are receiving payslips containing the correct information.
2. Where pay varies based on the time worked, the time worked must be shown as either a single total, or as a breakdown of hours by type of work or rate of pay.
These changes will only apply to hours worked which are paid on a variable basis - so if a salaried employee works overtime, which is paid at a variable rate, only the overtime hours will need to be specifically detailed on the employee’s payslip.
Whilst there is no set template as to how payslips should be set out, employers must make sure that the template they use must be clear, and it should be obvious from the payslip which pay period is being covered.
Employers who fail to comply with the new rules could face a claim in the Employment Tribunal.
If the Employment Tribunal finds that the employer did not provide a payslip, or that the payslip provided did not have all of the relevant information, then the Tribunal must make a declaration stating this, which it can publish on its website.
The Tribunal can also make an order requiring the employer to repay any unnotified deductions made in the 13 weeks preceding the presentation of the claim, even if the employer was entitled to the make the deductions.
In preparation for these changes, employers should review their business and payroll data processes to make sure they are complying with these new rules.
For further information or any queries, please contact Ashfords' Employment Team.