Employers to provide itemised payslips under new legislation

From 6 April 2019, new legislation will change how UK employers provide payslips to their workforces. More specifically, under the new system employers will have to deliver itemised payslips to every worker on their payroll, not just those classified as ‘employees’. Current legislation does not require payslips to be issued to contractors, freelancers, and other types of ‘non-employee’ workers – this situation will change this year, with obvious consequences for payroll departments around the country.

The amendment to current pay legislation was proposed in February 2018 and motivated for greater clarity over the hours of work UK employees were being paid for.

By extending the statutory entitlement to receive an itemised payslip, the government aims to ensure workers are paid fairly and accurately in all industries across the UK. Similarly, those workers will be able to react faster when they are paid incorrectly, and become more aware of their rights.

 ‘Time Worked’ Amendment

Beyond the simple expansion of payslip entitlement to all workers, the reformed Employment Rights Act also changes the information which must be included on the payslip.

UK payslips must, under current provisions, detail:

  • The employee’s gross salary/wages,
  • Deductions (tax, NI, etc)
  • Net salary/wage amount received.

Under the new legislation, payslips will also have to include information about the number of paid hours the employee has worked – but only in situations where “the amount of wages or salary varies by reference to time worked”.

In these variable contexts, payslips will have to show hours worked either as:

  •  A single, combined amount, or
  • An itemised list of hours worked for different rates of pay

Including this information on payslips means that variable-time employees will not only find it easier to reconcile their pay with their work hours, but to establish whether they are being paid the national minimum wage by their employers.

Adjusting your Payroll

With the new regulations approaching, it’s time for employers to adjust their payroll setups to facilitate the provision of payslips to all workers. As an employer, this means reviewing your business’ payroll infrastructure and ensuring there is sufficient cohesion between other parts of your organisation, such as accounting and HR. Basically, you’ll need to ensure that your payroll is not only able to collect the information required by the new regulations but that your payslip format is adjusted to present this.

Payslips can be provided to employees as a printed or even written document, or provided electronically – and must be delivered on or before the employee’s payday.

If you would like more information on the new changes and adjusting your business payroll. Why not get in touch with our payroll department at Ward Williams as we would be delighted to assist on 01932 830664 or email rachel.kellett@wardwilliams.co.uk.