April’s payslip changes – are you prepared?
The beginning of the new tax year traditionally brings with it a number of new requirements which employers must adjust to. This year is no exception and it is important that businesses understand the changes to payslips that will become effective on 6th April.
For pay periods starting on or after 6th April, the right to receive an itemised pay statement will be extended to include both workers and employees. Previously this right was reserved only for employees, however ‘workers’, including casual and zero-hours, must also receive detailed payslips on or before the date of payment of salary.
A failure to provide an itemised payslip to workers could result in a tribunal claim. Those who fail to receive their payslip on time, or receive the payslip without the necessary information, may make a claim to the employment tribunal that their right has been breached. If the tribunal agrees that this is the case, they can make a declaration to this effect.
If the tribunal finds that the employer did not provide a pay statement and has made an unnotified deduction from wages, whether lawful or otherwise, within the 13 weeks before the tribunal application, they may issue an award up to the value of these deductions. To avoid this, employers should work with their HR and payroll departments to put appropriate provisions in place. It would be advisable to review their current workforce ahead of time to determine who this new right will apply to, whilst it may also be beneficial to voluntarily provide payslips to all staff ahead of April’s deadline, thereby mitigating any teething issues that may occur.
Another change for pay periods starting on or after 6th April is the requirement for the total number of hours worked to be included on payslips for all workers whose pay varies depending on the amount of time worked. It is important to note that this could be in relation to hours, such as those who participate in overtime or shift work, as well as day-rates for individuals whose pay differs depending on how many days they work in each pay period. It will also include the scenario when an hourly paid worker is on sickness absence and receives statutory sick pay during this time because their pay has varied according to the amount of time worked.
Where the number of hours is to be included, they must be clearly listed as either one total of all the hours which vary pay, or separate hourly figures for each variation of pay. Again it is essential that employers amend their business practices where necessary to meet this requirement, such as altering the format of payslips to include space for the new inclusion.
Whilst some employers may be inclined to see April’s new payslip requirements as a hindrance, they are ultimately designed to increase clarity. Pay disputes are often amongst the most common case types heard at employment tribunals, therefore employers would do well to embrace any initiative that looks to reduce unrest when it comes to staff salaries.