Payslip changes - Are you ready?

New legislation comes into force from April 2019 that requires employers to provide payslips to all workers, and more importantly to show hours on payslips where the pay varies by the amount of time worked.

A payslip for everyone

From 6 April 2019, the statutory right to receive an itemised payslip will be extended to all workers. Current legislation does not require payslips to be issued to contractors, freelancers, and other types of ‘non-employee’ workers. The change applies to payslips covering pay periods which begin on or after 6 April. More information on whether a person is classed as a worker can be found here.

How many hours?

Beyond providing an itemised payslip to all employees, employers must now also show the number of hours worked that are being paid for. Any other hours do not need to be shown - for example, where a worker has a fixed salary each month, and works variable overtime with additional pay at an hourly rate, only the hours of overtime need to be shown.

The guidance states that the hours can be shown either as a single total of all such hours in the pay period, or they can be broken down into separate figures for different types of work or different rates of pay, but It should be clear which pay period they were worked in.

Increasing transparency

The amendment to current legislation was proposed in February 2018 and sets out to increase transparency between employers and employees, and to ensure more workers are paid fairly and accurately across the UK. Similarly, workers will be able to easily identify the hours they have (or have not) been paid for and react faster when they are paid incorrectly.

Impact on payroll

These changes may mean that some employers will have to adjust their current payroll procedures to ensure compliance. Where applicable employers will have to provide their payroll department with the number of hours worked, and ensure their payroll system can not only collect the data but also display the information clearly on a payslip.

At RC Payroll Solutions no system changes or software updates are required. Simply provide us with hours worked for employees paid by time worked, and we will take care of the rest. We support these legislative changes and have always maintained that a detailed, itemised payslip provides transparency and clarity to both employers and employees.

The government have provided guidance for employers on these changes here.