New laws introducing payslip changes are passed

Peninsula Team

May 16 2018

The government announced payslip rights would be amended and extended as part of their response to the Matthew Taylor Review of modern working practices. New legislation has since been enacted which will introduce these changes next year.

A new right for workers to receive a payslip has been supported by Taylor and the government. Currently only available to employers, extending payslips to workers is seen as a method of providing greater transparency and certainty about pay, including whether deductions are made and how much they will take home.

The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) (No. 2) Order 2018 extends the right to receive a written, itemised pay slip to all workers from 6th April 2019. From this date, employers will be required to produce a payslip when they pay any salary or wages to workers. A failure to provide the payslip at all, or providing a payslip which does not include the information required by law, can be challenged by workers who will have a new right to make a claim at the employment tribunal.

Although receiving a payslip will increase understanding about the amount of money which is entering the individual’s bank account or pay packet, there can still be a lack of clarity about how this figure is arrived at by the employer.

To address this, the Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order 2018 introduces a requirement for employers to state the total number of hours worked in respect of pay on all payslips from 6th April 2019. This requirement will apply where the individual’s wage or salary varies depending on how much time is worked. The number of hours can either be stated as a single total figure or separate figures where the hours worked relates to different types of work or different rates of pay.

Alongside increasing transparency in pay for workers and the hours of work which are reflected in the payment, these new rights and requirements for pay slips will make enforcement action against minimum wage underpayments, arguably, easier. Previously, many employers may not have produced payment documentation for their workers meaning assessing whether they received, on average, the legal minimum for hours worked over the pay reference period was harder. Now, with a right to receive a written, itemised pay statement that includes the total number of hours worked, this assessment becomes much easier for HM Revenue and Customs.

Have concerns about minimum wage underpayments? Call our Payroll Advice Team today for expert advice

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