Are you an Employer paying employee’s a fixed salary? There’s only 5 months to go until the new legislation comes in that requires all employees to be provided with itemised payslips.
On the 8 February 2018, a new statute was laid before Parliament: The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order 2018.
Currently, under section 8 of the 1996 Act, an employer only has to include:
- The employee’s gross wage;
- deductions from the gross amount; and
- the net wage received.
From April 2019, when the new legislation is put in place, provide itemised payslips on which the employer must include:
- the hours worked for which payment is being made; or
- give separate figures for different types of work, worked or where different rates of pay are paid for the work done.
The aim of the Order is to increase transparency over whether employees are paid correctly and to address the issue of underpayment.
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 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.
What action you need to take as an Employer?
Before the order comes into place employers should:
- Ensure payroll processes are adjusted to collect the new information required; and
- Amend the format of their payslips to include this new information, where appropriate.
If you feel you may not be complying with this new legislation and would like some advice then please do not hesitate to contact us.