The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order 2018 was laid before parliament in February 2018 which outlined new legislation taking force from April 2019 requiring employers to include additional information on payslips.
In simple terms, this now means that all workers have the statutory right to see what hours make up their pay with such hours itemised clearly on their payslip each period.
The Department for Business, Energy and Industrial Strategy (BEIS) has recently published a guidance document to help clarify how employers will need to comply with the new legislation coming into effect.
The guidance offers practical examples of different workers situations including:
- Example 1: A salaried worker with no variable pay
- Example 2: A salaried worker with additional variable pay
- Example 3: A worker paid by the hour
- Example 4: A worker paid by the hour with additional pay for unsociable hours
- Example 5: Term time workers
- Example 6: Day rate workers
- Example 7: A salaried worker takes unpaid leave
- Example 8: An hourly worker on statutory sick pay
Broadly speaking, a worker’s payslip must be itemised if their pay varies depending on the amount of hours they work in a period.
If a worker is salaried, however, with no variation in their pay, an itemised payslip is not necessary.
The vast majority of employer processes should already comply with the new legislation but the most likely aspect of the legislation that employers are likely to fall foul of is failing to itemise gross overtime payments to workers.
The guidance has drawn some criticism from CIPP for including more complex scenarios as put forward by some stakeholders. Discussions between CIPP and BEIS are ongoing to hopefully offer more detailed, pragmatic advice to employers.
We will of course pass on any new clarification or advise as soon as it comes available.