Current Legal Position
As it stands all employees are entitled to a written, itemised pay statement from their employer which must be provided either before or at the time that the payment of the wages or salary is made.
There is a minimum amount of information which must be provided by law:
- The gross amount of wages or salary.
- The amounts of any variable and any fixed deductions from that gross amount and the purposes for which they are made (subject to the ability to provide a statement of fixed deductions instead).
- The net amount of wages or salary.
- Where different parts of the net amount are paid in different ways, the amount and method of each part-payment.
An example of a variable deduction may be an overpayment that has been made or a one-off training course fee. A fixed deduction on the other hand may include trade union subscriptions or season ticket loan repayments.
An employer can provide an employee with a standing statement of fixed deductions for a maximum duration of 12 months which provides details of what the deduction will be, how much it is for, and the intervals at which the deductions will be made. In providing this standing statement, there is no longer a requirement to specify the purpose of the deduction on the payslip itself.
Many employers now choose to use the wonders of modern technology to provide these payslips in an electronic format. Employers still need to ensure that they meet their obligation to provide the statement on or before payday.
It does however remain untested in the English courts as to whether providing statements electronically satisfies the requirement to ensure that the employee actually receives their statement.
Change in Legislation – April 2019
Following the Taylor Review of Modern Working Practices, an itemised pay statement will need to be provided not only to employees but also to workers who are paid on an hourly basis. The number of hours must be shown either as an aggregate figure or as separate figures for different types of work (or rates of pay).
What does this mean for you?
It is recommended that for those employers who currently provide electronic payslips to e-mail employees to confirm that payment of their wages/salary is due to be made and either attach the payslip to the e-mail or provide a link to a portal to enable employees to access their statement.
Where employees are off sick, on maternity, or other statutory leave and it is not possible for them to access their payslips online, printed copies may still need to be provided to ensure compliance with the law.
Looking ahead to April 2019, businesses should prepare to provide itemised pay statements to any workers, as well as employees, who are paid by the hour, with the ability to breakdown the figures if there are different applicable rates of pay or different types of work being undertaken.
If you have any queries or concerns, please don’t hesitate to contact the Alcumus HR Consultancy team on [email protected]. Our team of consultants can provide you with the professional advice you need for managing your employees.
Written by Marie-Clare Swallow, Senior HR Consultant