28.06.2018

Payslip Law Changes – What you need to know

A recent statute (The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order 2018) has been passed mandating changes to the information employers have to show on workers’ payslips.

Payslip

Under the Order, which is due to come into force on 6 April 2019, employers must itemise payslips for employees’ wages which vary depending on how much time they have worked. This must include the number of hours they are paying the employee for.

The employer must either:

• Show the combined number of hours worked for which payment is being made; or
• Itemise the figures for different types of work worked and/or different rates of pay.

This change to legislation is aimed at employees who work varied hours and whose pay changes accordingly. Itemised payslips will increase transparency for both employers and employees alike.

The aim of the Order is to increase transparency over whether employees are paid correctly and to address the issue of underpayment – whether of the National Minimum Wage, the National Living Wage or under the employee’s contract of employment.

An employee will be able to see when they read their payslip whether the number of paid hours matches their understanding of how many hours they have actually worked. Employees can then:

  • challenge their employer if they think their payslip is wrong;
  • alternatively raise a case with the Advisory, Conciliation and Arbitration Service (ACAS); or
  • raise a case with HMRC (if the National Minimum Wage has not been paid).

In all these cases, the employee will be able to use their payslip as evidence.

In preparation for April 2019, employers must review their business and payroll data processes and to check compliance with this new law – amend their processes and configure their payroll operation, to enable the correct hours information to be provided.

If you have any questions on the changes, or would like help with your payroll please contact our dedicated payroll team on 0345 177 5500 or use our on-line contact form.

 

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