FAILURE TO ISSUE ITEMISED PAYSLIPS
April 2019 welcomes a number of legislative changes that all employers will be expected to adapt to, including the fact that the right to an itemised payslip will be extended to include those who qualify as ‘worker’s’.
Currently, only ‘employees’ have a statutory right to receive a written itemised payslip, which must be issued either before or at the time their salary is paid. Payslips can be provided to the employees either physically or digitally and must contain specific information as outlined in the Employment Rights Act 1996. This includes the employee’s gross salary; any deductions made such as tax and national insurance contributions and their final net salary.
Your Tax Shop processes payroll on behalf of many of our clients, the majority of our clients receive the payslips and payroll reports digitally each pay period. This is the most efficient way for us to provide the reports to our clients. If you process your payroll in-house, there will be an option within your payroll software that will allow for the payslips to be emailed direct to the employee’s.
From 6th April this entitlement will be extended to include both ‘employees’ and ‘workers’, an umbrella term which includes zero-hours’ workers, casual workers, and agency workers. This means that many organisations, who have not been required to issue payslips to staff in the past, may have to amend their business practices accordingly.
For pay reference periods starting on or after 6th April 2019, you will also need to include the total number of hours worked which results in the payment being made on payslips for staff whose pay varies depending on the amount of time they have worked. This is something which we already do at Your Tax Shop for our clients, as we believe this helps the employees understand the breakdown of their pay easier.
Eligible individuals have a legal right to receive their payslip on time and you as an employer will be in breach of this right if you fail to meet this requirement. This applies in instances where the payslip is not provided at all, a payslip is provided but does not contain all the required information, or there is a dispute over the accuracy of the information contained within the payslip.
Failing to provide an individual with their payslip on time could result in a standalone application to an employment tribunal. Where the tribunal finds the payslip hasn’t been provided, or a payslip has been given but doesn’t contain all required information, the tribunal can make a declaration that the employee’s right has been breached. In these situations, you as an employer will face a penalty equal to the amount of unnotified deductions, lawful or otherwise, made from the individual’s salary.
Making appropriate plans ahead of time will ensure you are able to comply with this new payroll requirement, but should you require any advice regarding the above-mentioned payroll changes please contact us at Your Tax Shop and we will be happy to help.