My client has asked me about the new legislation regarding payslips that comes into effect in April 2019. Can you shed some light on this?
From 6th April 2019 new legislation around providing payslips comes into effect, under which:
All employers will be required to provide payslips to all ‘workers’, and
Show hours worked on payslips where the pay varies by the number of hours worked
Who is entitled to a payslip?
The statutory right to receive an itemised payslip will extend to all ‘workers’ from 6th April 2019. Currently, only employees are entitled to payslips.
The status ‘worker’ is the third category in addition to the traditional definitions of ‘employee’ and ‘self-employed’ and a worker could be either of these. The definition of a ‘worker’ as expressed in the Employment Rights Act 1996, s230(3) is an individual who:
“has entered into work under a contract of employment or any other contract, whether express or implied and whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or custom of any profession or business undertaking carried on by the individual.”
Workers could include:
zero hours work
This new right will come into force for pay periods which begin on or after 6th April. A payslip may be provided in either a physical format or an electronic format that the worker can print.
When do I need to show hours on payslips?
You need to show the number of hours on payslips where pay varies by the number of hours worked.
For example, a member of staff who is paid by the hour will need to see the number of hours worked. A member of staff who receives a monthly salary for a set number of hours worked, does not need to see the number of hours they work on their payslips.
The hours can be shown as a single total of hours or can be broken down into separate figures for different types of work or different rates of pay.
This new right will come into force for pay periods which begin on or after 6th April.
Please see below some examples:
A salaried worker with no variable pay
Georgia is contracted to work 35 hours per week at a salary of £35,000.00 per year. She doesn’t work overtime and only works 35 hours per week.
Georgia’s pay does not vary by the number of hours worked, therefore there is no need to show the number of hours worked on her payslip.
A salaried worker with additional overtime pay
Autumn is contracted to work 40 hours per week at a salary of £28,000.00 per year. She sometimes works overtime at a weekend in busier periods.
Autumn’s payslip does not need to show the number of hours for which she is paid a salary. However, her payslip does need to show the number of hours she has worked as overtime, as this is variable pay.
A worker paid by the hour
Elliott is paid £10.50 per hour and is paid weekly for the number of hours that he has worked.
Elliott’s pay does vary by the number of hours worked, therefore all hours which he works each week must be shown on his payslip.
HMRC has published guidance around this new legislation; please see the below link:
In association with Croner Taxwise
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