New amendments to the 1996 Employment Rights Act will come into force from 6 April 2019, increasing employer’s responsibilities regarding the payslips they produce. It is important to understand these changes, firstly because employers will be required to provide greater detail within their payslips. In addition to this, the legislation also requires employers to send payslips not only to employees, but to all those classed as ‘worker’. To help you stay compliant, the team at Solve HR have summarised the upcoming payslip responsibilities below.
The following details will be required in every payslip from 6 April 2019;
1. Gross salary or wages
2. Net salary or wages payable
3. Where there are deductions, specify the amount and what it relates to
4. Where it is paid in parts, the amount and payment method for each part
5. If any part varies due to time worked, specify both rate of pay and total number hours worked. This can be either as a single aggregate figure, or separately for each rate of pay or type of work
The reasoning behind the increase in detail demanded of payslips is to increase transparency around what is being paid and why. By helping employees better understand their pay, it is hoped that this will ensure obligations around National Minimum Wage, Holiday Pay and Sick Pay are more likely to be honoured. It is anticipated that some organisations may find they need to introduce new software or update their existing payroll processes in order to meet the new requirements. If your business would benefit from further guidance in this area, the Solve HR team can provide you with expert support.
Even if someone isn’t classified as an ‘employee’, they may legally fall into the category of ‘worker’, and as such be entitled to employment rights around National Minimum Wage, paid holiday and sick leave. With the emergence of the so-called gig economy, it is becoming increasing difficult to determine the status of their workforce. This is being reflected in Employment Tribunal cases, where we are increasingly seeing instances of those who were originally defined as ‘self-employed’ winning the right to be treated as a worker, as can be seen in high-profile cases such as Uber. Many employers are finding the boundaries are blurred between an employee, a worker and a self-employed contractor, and by not understanding the distinctions, running the risk that they are not fulfilling their legal obligations.
If you find that you are in any doubt about the status of your workforce, or you have any questions regarding the new payslips legislation, you can contact Solve HR for advice at firstname.lastname@example.org.