Changes flowing from the Taylor review – itemised payslips

Following the Government's response to the Taylor Review looking at modern employment practices and staffing structures in February 2018 some recommendations are starting to be put in place. Let's take a closer look at the changes that are being made to itemised payslips for workers and what employers need to do.

Background

An amendment to the Employment Rights Act 1996 has been made to provide that, from 6 April 2019 workers (including casual and zero hour workers) will be entitled to receive an itemised payslip. Previously this right applied solely to those afforded 'employee' status.

This change follows on from the Taylor Review that was conducted by the Government in July 2017 and is intended to assist low paid workers and those whose working hours vary in determining whether they have been paid correctly. The purpose of the review was aimed to improve workers' rights and improve awareness around the protections available. If you would like more information on the outcome of the review, please click here and here for our previous commentary.

Currently, employees have the right to an itemised payslip requiring employers to provide a statement setting out:

  • The gross amount of the wages or salary;
  • The amounts of any variable, any fixed, deductions from that gross amount and the purposes for which they are made;
  • The net amount of wages or salary payable; and
  • Where different parts of the net amount are paid in different ways, the amount and method of payment of each part-payment.

The new legislation will require:

  • employers to provide the above information for both employees and workers alike; and
  • payslips to also state the number of hours that are being paid where wages vary according to time worked.
  • This information can be demonstrated either by:
    • an aggregate number of hours for which payment is being made; or
    • separate figures for different types of work and/or rates of pay.

If employers fail to provide an itemised payslip as required under the legislation and set out above, an employee will be entitled to bring a claim in the employment tribunal and specifically seek a declaration pursuant to the Employment Rights Act 1996 that the employer has breached its duties. A tribunal will then determine what particulars ought to have been included at the relevant time. If successful, a tribunal can award a sum to the value of the sums that were not included on the statement on the 13 weeks prior to the claim.It is important for employers to consider the changes at an early stage to ensure that they are not caught out as the deadline to provide itemised payslips for all workers approaches.

From a practical perspective, businesses should ensure that:

  • payroll processes are adjusted to collect the new information required; and
  • the format of the payslips are adjusted to include the additional information (where appropriate).

If you would like to discuss how this could impact on your business, please contact me on +44(0)1872 243339.

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