Worker Rights: Imminent Changes to Itemised Payslips
New rights for all workers to itemised payslips will make payment more transparent and understandable
Payslips for all employees has been a legal requirement since the Employment Rights Act 1996 where a number of particulars were named as being required on all payslips. These include:
- The gross amount of wages or salary
- The amounts of any variable, fixed or other, deductions from that gross amount and the purposes for which these are made
- The net amount of wages or salary payable
- The method of payment
In February 2018, two new Orders were placed before Parliament which are set to change the requirements of information on payslips based on the contents of The Taylor Review, published in July 2017, in which recommendations were made to increase the rights of workers. The Orders placed before Parliament follow the recent response from the government to this Review, which, amongst other items, confirmed that they would be introducing legislation to extend the right to receive a payslip to all workers. This all-encompassing ‘workers’ umbrella includes those on casual and zero-hours contracts.
Changes to itemised payslips due to become lawful on 6th April 2019
Both Orders are due to come into force on the 6th April 2019. The first of these, passed on the 25th April 2018, named The Employment Right Act 1996 (itemised Pay Statement) (Amendment) Order 2018, will change the information required on an itemised payslip. The goal of the reform is that workers will have a clearer understanding of their pay, especially those who work varied hours which results in changeable pay, differing from period to period. The change will require payslips to state the number of hours that are being paid at which pay level, where pay varies dependent upon number of hours worked. This can either be shown as a summative number of hours worked, or as a breakdown for different types of work or rates of pay.
The second Order, named The Employment Right Act 1996 (itemised Pay Statement) (Amendment) (No. 2) Order 2018 will bring into force the government’s commitment, recently, to providing all workers, with written, itemised payslips- not just employees. This extension of rights to all workers enables all those in receiving payment to enforce their right to an itemised payslip in the Employment Tribunal.
The basis of these changes is, in particular, to provide transparency to the lower paid work force who will, from April 2019 onwards, be able to highlight incorrect payment structures and mistakes on payments. There will also be a clearer ability to recognise if workers are not being paid correctly and in line with the Living Wage, as set out through the government’s proposal of transparency on pay for workers.
Does your business require support with the changes to The Employment Right Act 1996 (itemised Pay Statement) (Amendment)?
In light of these recent Orders, all employers with employees or workers who will also require itemised payslips, or changes to their existing payslips, should begin to review their pay statement practices. The new rules will apply to all work, or periods of work, which commence after the 6th April 2019.
If your business requires support through the imminent changes to itemised payslips, or for any other aspects of employment law, in the first instance, please contact Vaishali Thakerar at our Leicester office on 0116 212 1000 or by email to firstname.lastname@example.org