Payslip changes from 6 April 2019
09 April 2019
This is the month that important changes to the Employment Rights Act 1996 come into effect regarding payslip information for pay periods beginning on or after 6 April 2019 and for workers who now have the statutory entitlement to receive a payslip.
The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order 2018 requires employers to show on the payslip the number of hours worked by the employee for which they are being paid, but only in situations where the employee’s pay varies as a consequence of the time worked during the pay reference period.
The Amendment states:
“…where the amount of wages or salary varies by reference to time worked, the total number of hours worked in respect of the variable amount of wages or salary either as
(i) a single aggregate figure, or
(ii) separate figures for different types of work or different rates of pay.”
The amendments made by this Order do not apply in relation to wages or salary paid in respect of a period of work which commences before 6 April 2019.
Guidance
Back in December the Department for Business, Energy and Industrial Strategy (BEIS) published a small guide to help provide clarification on what actions employers will need to take regarding their payslips for pay periods beginning on or after 6 April 2019.
The minimal guidance runs to 7 pages and includes a small number of examples that aim to demonstrate the simplistic approach intended by this legislation.
CIPP comment
We said at the time that we were disappointed that the guidance does not include more of the detailed, complex scenarios cited by stakeholders, and we voiced our fear this will lead to confusion amongst employers.
And it unfortunately has – an example being that the guidance states that for hours paid, “it should be clear which pay period they were worked in”.
We have had feedback from members as there does not appear to be any current payroll software which will let you put on periods in which hours were worked.
There is no requirement in the legislation to indicate when the hours were worked, it is only the guidance that mentions this and it would seem that there is no practical way to implement this element.
We continue to be in discussions with BEIS regarding the detail of its guidance and the issues being experienced by employers and payroll professionals
We welcome any comments to policy via email to contribute to our deliberations.
Payslip for all workers
A second piece of legislation came into effect on 6 April 2019 - The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) (No. 2) Order 2018. This extends the right to receive an itemised pay statement (or “payslip”) to all workers, and not just ‘employees’.
This corrects the current situation whereby those at work classified as ‘employees’ have a statutory entitlement to receive a payslip, while those classified as ‘workers’ who are not employees, do not. The aim is to increase transparency between employer and worker.