Further to our recent article on upcoming employment law changes, employers will now be required to provide additional information in itemised pay slips in certain circumstances from the 6th April 2019 under The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order 2018. This new legislation was laid before parliament on the 8th February 2018
Itemised Pay Slips: The Present Position
Employees are entitled to receive an itemised pay slip, with the exception of those who work for the police service, merchant seaman, those who work in share fishing, and those who are not employed (i.e. workers, freelancers, contractors, etc)
Currently, itemised pay slips must contain the following information:-
- Gross pay
- The amount and purpose of any deductions made (e.g. income tax, national insurance contributions, pension contributions, etc)
- Net Pay
- Where elements of net pay are paid differently, the amount and payment method for each part must be included
- Fixed deductions (e.g. a trade union subscription): employer can provide the employee with a ‘standing statement’ showing the amount, purpose, and timings of the deductions. The statement should be updated when changes are made, and should be updated at least once every 12 months. Once a statement has a been issued, then the employer can simply provide the total figure for fixed deductions within the itemised pay slip, instead of providing a breakdown.
- Should an employer fail to provide the employee with a proper itemised pay slip, then the employee can obtain a declaration from the employment tribunal to that effect under section 12(3)(b) of the Employment Rights Act (ERA) 1996. The employment tribunal can also award compensation under section 12(4) of the ERA 1996 for up to the total amount of any unnotified deductions made to the employees pay within the 13 weeks prior to the commencement of tribunal proceedings. Unnotified deductions are any deductions that have been made without explanation on the payslip. Should an employee be dismissed for having asserted their statutory right to a properly set out itemised pay slip, then the employee is entitled to bring a claim for automatic unfair dismissal before an employment tribunal, and they do not require 2 years continuous service in order to do that
The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order 2018
Under The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order 2018, as well as providing the information that currently needs to be included in an itemised pay slip, an employer will also need to include, from the 6th April 2019, the total number of paid hours worked, but only in those situations where pay varies in direct relation to the amount of time worked. The aim of the change is to provide greater clarity for those who work variable hours, and whose pay fluctuates as a result of that.
The legislation amends section 8 of the Employment Rights Act 1996, by adding the following requirement: “where the amount of wages or salary varies by reference to time worked, the total number of hours worked in respect of the variable amount of wages or salary either as (i) a single aggregate figure, or (ii) separate figures for different types of work or different rates of pay” must be included on the itemised pay slip.