Changes to pay statements

With the GDPR looming, you may be doing last minute preparations for the introduction on 25th May 2018 but employers should not be heaving a sigh of relief.

There is much more work for employers to do to ensure they remain compliant with Employment Law.

One such change that is coming up is to pay statements or payslips. You may not give them much thought but next year sees some changes that employers need to be aware of and prepare for in advance.

Who do pay statements need to be issued to?

As of April 2019, the right to an itemised pay statement will be extended to cover workers.

At present, an employee has the right to a written itemised pay statement by their employer on or before pay day. This right is afforded to employees; therefore this does not cover workers, contractors or freelancers.

The aim of this amendment to the law is to help workers ascertain whether they have been paid correctly.

What do pay statements need to include?

Next April, changes are also coming to effect in regards to what needs to be shown on the pay statement.

Currently, the payslip, which can be provided electronically or in printed form, must include the gross amount of wages or salary, the amounts of any variable and any relevant fixed deductions and the purpose for that deduction and the net amount of wages.

But the law will require employers to state the number of hours they are paying the employee for on the pay statement in cases where the employee’s wages vary in accordance to how much they have worked. The employer must either show the total number of hours worked for which payment is being made or provide the figures for different types of work worked or different rates of pay.

The aim is to tackle underpayment – this covers if an employer has paid the employee below the amount laid down in the employee’s Contract of Employment or below the statutory National Minimum Wage/National Living Wage. This allows employees to at spot if anything is amiss quicker and more easily and helps them if they want to challenge their employer. They can do this by going to Acas or if they think there has been an underpayment of the national minimum wage, they can go to the HMRC.

What now?

The changes are set to come into force next year, so employers should have enough time to adjust their internal systems and processes. If you would like to discuss these changes in more depth, contact your Employment Law Adviser for guidance and support.

Director of Legal Services

James Tamm

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We combine the service quality of a law firm with the certainty of fixed-fee services to provide expert, solutions-focused Employment LawHR and Health & Safety support tailored to employers.

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