Deadline approaches for employers to comply with new payslip requirements for employees and workers

The Government’s achingly slow progress in implementing many of the key recommendations of the Taylor Review means that some of the proposals may be in danger of slipping from many employers’ radars. Indeed, a whole year has passed since the Government published its response to the Taylor Review (which itself was published in July 2017).

Employers should be aware that in that response, as part of its aim to increase ‘transparency of entitlement’, the Government committed to extending the right to receive a payslip to all workers and to require that employers state the hours being paid for on the payslips of all time-paid workers.  This proposal had also been recommended by the Low Pay Commission, and accepted by the Government, back in 2016. It took until early 2018, however, to publish the relevant legislation (click here and here) and the changes are now due to come into force on 6 April 2019.

The key points of which to be aware are that from 6 April 2019:

  • Employers must provide all workers with a payslip, not just employees as now. Identifying and classifying the individuals to whom this applies may not, in many cases, be a straight forward exercise and employers should seek advice if they are unsure.
  • Employers must state the number of hours worked on payslips where the pay varies by the amount of time worked. Employers with only salaried employees or workers (i.e where pay is fixed and does not vary with the amount of time worked) therefore do not have any additional obligations in this regard.  However, many employers will engage employees and workers on an hourly paid basis and, in these circumstances, the hours worked by each individual will have to be provided on the payslip (either as an aggregate total, or as separate figures for different types of work/pay). This may catch even salaried employees to the extent that any additional hourly payments are made in respect of overtime.  Although on the face of it the new requirements are seemingly clear, employers who engage individuals on a variety of different hourly paid arrangements may find these new obligations administratively difficult to comply with. Employers will need to ensure that the relevant processes and systems are in place to manage this.
  • BEIS has published guidance to assist employers with these new obligations which includes a number of different case study scenarios.
  • An individual who has not received a payslip or believes that the payslip lacks the required information, can bring a claim before the employment tribunal. If successful, the employment tribunal will make a declaration to that effect, which may also be published on its website.  Further, if a tribunal also finds that, in the 13 weeks immediately prior to the employee’s claim, any unrecorded deductions have been made from the individual’s pay, it can order the employer to pay compensation up to the aggregate amount of the unrecorded deductions.
  • The obligations do not apply in respect of any period of work which commenced before 6 April 2019.