Since the introduction of The Payment of Wages Act 1991, the payslips provided to an employee* by an employer are itemised to reflect earnings before and after any deductions, and the amount of such deductions, each time that employee is paid.
The introduction of the Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order 2018 (the Order) introduces changes to how payslips are itemized as from 6 April 2019.
The changes will mean that any employee paid on an hourly basis will be entitled to receive a payslip itemising the number of hours that have been worked, the aim of which being allowing employee to establish that they have been paid the correct amount in return for the hours worked under the National Minimum Wage rules.
Payslips should be provided in a written, printed or e-format detailing how the payment has been calculated in circumstances where the employee’s rate of pay and hours are variable.
Practically speaking, employers should ensure that their systems are geared up to accurately record the appropriate information concerning pay and hours worked, and checks should be introduced to ensure the format of payslips adequately and correctly display all required information.
Additionally, The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) (No. 2) Order 2018 sees the legislative changes extending to all ‘workers’. ‘Workers’ are entitled to some employment rights including the National Minimum Wage and holiday pay therefore the requirement now extends to this employment category.
The changes have come into effect in an effort to improve employees and workers rights and raise awareness of such rights.
If you have any queries about the impact on your payroll processes please contact our Payroll Team: