Employers need to be aware of new employee payslip rules

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British employers are not far away from the introduction of new employee payslip regulations. Businesses are being reminded that there are just six months to go until new legislation comes into force that requires all workers to be provided with itemised payslips.

From April 6, 2019, all workers, including casual and zero hours workers rather and not just employees, must be issued with written, printed or electronic payslips which detail how the payment was calculated in cases where the rate of pay and hours are variable. The new rules have been introduced to make it easier for employees to understand their pay, ensure they are being paid correctly and challenge their employers if they feel they have been underpaid.

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 1996 (Itemised Pay Statement) (Amendment) Order 2018 will change the requirement of what information is given on 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.
– Lindsey Knowles, head of employment law and partner, Kirwans

Payslips need to include both the information mentioned above, and that set out in Section 8 of the ERA 1996, including earnings before and after any deductions, the amount of any deductions that may change each payment period such as tax and National Insurance, 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, which will require employers to provide all workers – not just employees – with written itemised payslips.

If you have employees, your payroll processes may need to be revised but the chances are that, if you employ a payroll firm, or are just simply moderately diligent, then these new employee payslip requirements won’t be onerous because you already meet them.

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