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the GMB’s experience was that payslips are not always clear, and so it thought they should show an hourly rate. Also at oral evidence the Association of Labour Providers suggested the national living wage might lead to higher non‑compliance through various malpractices, including paying well below the minimum wage through falsely under‑recording worker hours, or sometimes in collusion with workers establishing false records to claim benefits. ... and considers introducing a requirement that payslips of hourly- paid staff clearly state the hours they are being paid for Incorrect recording of hours worked, and therefore subsequent underpayment, is likely an important driver of non‑compliance (both measured and unmeasured), and it is a problem which wider structural changes in the labour market are set to keep centre-stage, with more use of variable hours and other kinds of flexible contracts where hours change day to day. The LPC is therefore attracted to the kind of solution proposed by some stakeholders, and think it is worth investigating seriously. So they “… recommend that the Government reviews the current obligations on employers regarding provision of payslips and considers introducing a requirement that payslips of hourly-paid staff clearly state the hours they are being paid for.” The report goes on to say that in implementing this requirement the
Government should take into account the implications for different pay arrangements, such as for those workers on term‑time only contracts receiving a standard level of pay for each pay period, but working nil hours outside term‑time. In order to arrive at a level of pay for workers, businesses already need to know how many hours individuals have worked. So this is about sharing the assumptions made more explicitly than at present, thus increasing transparency, rather than imposing new burdens on firms. As well as providing a key piece of information for the worker to help reconcile hours and pay this step would also help in cases where HMRC is seeking to enforce the NMW. It would also have relevance in sectors such as care and for particular groups of workers, e.g. apprentices. According to the LPC’s report, the Government is still considering this option (and not for the first time), so we await further news. However, the LPC continue to urge the Government to act on this recommendation. The Policy team ran a poll in November 2016 to get a gauge on current practice and received a high number of responses: 933 in total. In response to the question “If you have hourly-paid workers, do you include the number of hours for which they are being paid on their payslip?”, 88% of respondents said yes they do include the number of hours, with the remaining 12% saying they do not. This was of course a single-question poll with no facility to elaborate; so, if you have views or experience with providing payslips/itemised pay statements that you would wish to feed in to any future consultation on this subject, please email Samantha Mann at policy@cipp.org.uk. n If you would like to take part in our latest poll it is situated to the right of all of our news items on the CIPP website.
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Issue 28 | March 2017
| Professional in Payroll, Pensions and Reward |
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