News

02 Oct 2018

Deadline approaches for payslip changes

There are just six months remaining until new legislation is introduced changing the requirements of employee payslips.

The payroll changes require all workers – including permanent, casual and zero hours – to be provided with fully itemised payslips.

Employers will need to issue staff with written, printed or electronic payslips which detail how the payment was calculated in cases where the rate of pay and hours are variable.

Lindsey Knowles, head of employment law and partner at Kirwans law firm said the changes had been introduced to make it easier for workers to understand their pay, ensure they are being paid correctly, and challenge their employers if they feel they have been underpaid.

“Following the recommendations of both the Taylor Review and the Low Pay Commission’s 2016 report, from April 6 2019, employers must provide all workers with a payslip that clearly states the number of hours they are being paid for,” said Ms Knowles.

“The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order 2018 will change the requirement of what information is given on an itemised payslip and is an attempt to improve transparency around pay, especially in cases where workers work varied hours or in various roles which involve differing rates of pay.

“Once it comes into force, payslips must include the information set out in Section 8 of the ERA 1996, including earnings before and after any deductions, the amount of any deductions that may change each payment period such as tax and National Insurance (NI), an explanation of any fixed amount deductions and the net wages to be paid.

“The second Order to be amended is The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) (No. 2) Order 2018, which will require employers to provide all workers – not just employees – with written itemised payslips.

“To ensure a smooth transition, employers need to ensure that those involved in HR understand the changes and how to implement them. Payroll processes need to be revised as soon as possible so that the additional information can be collated and included in the payslip,” she added.

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