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New payslip rules in place from 6 April 2019 - are you compliant?

New rules are in force from 6 April 2019 giving workers as well as employees a right to an itemised payslip. Section 8 of the Employment Rights Act 1996 is amended by the Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order 2018 from 6 April 2019.

Employers are now required to include the number of hours worked by the employee for which they are being paid on the employee’s payslips, but only in situations where the employee's pay varies as a consequence of the time worked.

This can be done either as an aggregate figure or as separate figures for different types of work or different rates of pay.

What additional information is required?

●      There is no requirement to show fixed hours but you can do so if you choose - if a member of staff works the same hours each month, you do not need to break down the total figure - even if the amount varies month to month due to a seasonal supplement.

●      If an employee works overtime which is varied, you will need to break this figure down.

●      If an employee works a varied amount of hours a month, you will need to break this figure down.

●      There is no limit to the amount of information required - the new rules set out a new minimum.

Do other members of staff need a payslip under the new rules?

Previously employers were only obliged to give employees a payslip. With effect from 6 April 2019, all workers (including zero-hours workers and agency workers) will also be entitled to receive itemised payslips. Only the genuinely self-employed will not be entitled to receive an itemised payslip.

To decide whether they are being compliant with the new regulations, employers will have to consider whether the individual is likely to be an employee, a worker, or a self-employed contractor. Of course, this question of employment status should have already been considered as it also effects entitlement to paid holiday and to the national minimum wage.

What happens if there is non-compliance?

The new rules only apply to payslips which include the pay date of 6 April 2019 and onwards. There is no need to reissue previous payslips.

The primary risk for non-compliance is to reputation if the employment tribunal finds that an employer has not included the correct information on a payslip.

Financial risk is more limited but an employer may be ordered to pay compensation up to the aggregate amount of any ‘unnotified’ deductions (section 12(4) ERA 1996). These may be lawful deductions (e.g. NICs) but not properly noted - as opposed to an ‘unlawful deduction from wages’ which are deductions employers are not legally allowed to make.

Posted on 28 April, 2019 by Ortolan

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