New employee payslip legislation for April 2019
New legislation is being introduced in April 2019 changing the requirements of employee payslips.
The changes require all workers which include permanent, casual and zero hours employees to be provided with fully itemised payslips.
These itemised payslips follow recommendations made by the Taylor Review of modern employment practices, which called for employers to make clear the hours which staff were being paid for.
Employers will need to provide staff with written, printed or electronic payslips which detail how the payment was calculated in cases where the rate of pay and hours are variable.
Alternatively, different payments for varying types of work and/or pay should be itemised instead.
Amendments employers need to make
The head of employment law at Kirwans law firm said the changes had been brought in to make it easier for workers to understand their pay.
This ensures they are being paid correctly and if not be able to challenge their employers if they feel they have been underpaid.
She said: “Following the recommendations of both the Taylor Review and the Low Pay Commission’s 2016 report, from April 6, 2019 employers must provide all workers with a payslip that clearly states the number of hours they are being paid for”.
The Employment Rights Act
The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order 2018 will change the requirement of what information is given.
This will be in the form of an itemised payslip and is an attempt to improve transparency around pay especially in cases where workers work varied hours or in various roles which involve differing rates of pay.
Once it comes into force, payslips must include both the information mentioned above, and that set out in Section 8 of the ERA 1996.
This includes earnings before and after any deductions, the amount of any deductions that may change each payment period such as tax and National Insurance (NI), an explanation of any fixed amount deductions and the net wages to be paid.
“The second Order to be amended is The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) (No. 2) Order 2018.
This will require employers to provide all workers, not just employees with written itemised payslips.”
Act now before the April deadline
Employers can act now in order to ensure they’re ready by the deadline.
To ensure a smooth transition, employers need to ensure that their HR team understand the changes and how to implement them.
Payroll processes should be revised as soon as possible so that the additional information can be collated and included in the payslip.
The format of the payslip itself needs amending so that the new information can be included ahead of the implementation deadline.