PAYROLL INSIGHT
Hours on payslips
Samantha Mann MAAT, MCIPPdip, CIPP senior policy and research officer, provides background to and an explanation of imminent fundamental changes that will affect many if not all pay statements
E arlier this year two orders were laid before Parliament that will effect change to section 8 of the Employment Rights Act 1996 (‘the 1996 Act’). Taken together they will obligate the employer when making a payment by reference to time worked to clearly display the number of hours being paid. Additionally, as well as providing payslips to all employees, the right to receive a payslip is to be expanded to all workers. All employees are ‘workers’ but not all workers are employees. This obligation will take effect from April 2019. Are your processes sufficient to ensure that you comply? Why intervention is necessary Workers – as distinct from employees – are not by law entitled to receive a payslip. Despite having no such legal right, government understand that some workers do currently receive a payslip; particularly those who work alongside employees since individual employers do not typically differentiate between the two, where the pay of each is being processed via pay as you earn (PAYE). But for those workers whose pay is not being processed via PAYE or because they are deemed to be a worker but not an
employee, there is a lack of transparency regarding their pay because, in many cases, they are not entitled to receive any of the statutory information required on an itemised pay statement. ...enable workers and employees to benefit from a In its 2016 spring report, the Low Pay Commission (LPC) made a non-rate recommendation that the government should consider introducing a requirement that payslips of hourly-paid staff clearly state the hours they are being paid for. Currently, under the National Minimum Wage Act 1998 (‘the 1998 Act’) employers are required to keep a record of information sufficient to establish that the employer is remunerating the worker at a rate at least equal to the National Minimum Wage (NMW). A worker only has a right to access this information upon request, but this right is qualified: the worker can only access the information to determine whether they are being paid greater level of transparency...
the NMW when they reasonably believe they are not. As a result, workers who are paid according to their time worked may not have sufficient information to identify whether the hours that the employer is using to calculate their gross pay is commensurate with their own understanding. Government intervention is therefore believed to be necessary in both these areas to enable workers and employees to benefit from a greater level of transparency of pay which will be provided by the itemised pay statement. It is further believed that this information will in turn help employees and workers assess whether they have been paid correctly and empower them to challenge their (ACAS) and/or HM Revenue & Customs (HMRC) where they think they have been underpaid. In the longer term, government believe that these measures will reduce non- compliance. Implementation April 2019 The recommendation by the LPC was accepted by the Department for Business Energy and Industrial Strategy (BEIS) employers or contact the Advisory, Conciliation and Arbitration Service
| Professional in Payroll, Pensions and Reward | July - August 2018 | Issue 42 16
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