New pay slips requirements from April 2019

New pay slip requirements are set to come into force requiring itemised calculations for variable rates of pay and hours worked.  This requirement will also be extended to include workers, not just employees.  Natalie Rawson, Employment Law Solicitor, explains these changes in more detail.

The amendments to the 1996 Employment Rights Act will come into force on April 6 2019.  From that date, employees and workers, including those under casual or zero hours contracts, must receive correctly detailed written, printed or electronic pay slips.

Pay slip inclusions

From April 6 2019, the following details must be included in pay slips:

• the amount of gross wages or salary
• for any part that varies according to time worked, the total number of hours worked and the rate of pay, either as a single aggregate figure or separately for each type of work or rate of pay
• the amounts of any deductions and what they relate to 
• the net amount of wages or salary payable
• if paid in parts, the amount and payment method for each part.

The greater detail is designed to help employees understand their pay and ensure they are being paid correctly.  The requirements will also ensure that it becomes clearer if an employer is not paying the individual the correct rate of National Minimum Wage, National Living Wage or holiday pay. For some employers, new payroll procedures and alternative software may be needed to satisfy the new requirements. 

As the right to receive an itemised payslip has been extended to include workers, a more complex question for many employers will be to first determine whether someone is an employee, a worker or a self-employed contractor. They will then be able to establish whether the individual is entitled to a payslip or not.  

Employment status

Many organisations do not recognise that even where someone is not an employee, they may still be categorised as a ‘worker’ and be entitled to certain rights such as the National Minimum Wage, paid holiday and sick leave. 

The boundaries as to who is a worker and who is self-employed are increasingly difficult to clarify following high-profile cases involving Uber and other so-called gig economy companies, with individuals winning the right to be treated as a worker, rather than a self-employed contractor. 

Many employers are not meeting legal minimum requirements because they do not understand their employment law obligations when it comes to workers.  The distinctions between an employee, a worker and a self-employed contractor may not be clear for some organisations; we have worked with many employers across Hampshire defining their workforce to ensure they are complying with the necessary regulations and reducing the risk of future tribunal claims against them.  If an employer is in any doubt about the status of their workforce, we would recommend they seek legal advice before taking steps to comply with the regulations regarding pay slips.

You can contact Natalie or the Employment team with any questions regarding the changes to pay slips or to discuss employment status on 023 8071 7717 or email natalierawson@warnergoodman.co.uk. 

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ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.