New legislation will be in force from 6 April 2019 requiring employers to provide itemised pay slips to all workers. Previously only employees were entitled to receive a pay slip.

Guidance released from the Department for Business, Energy and Industrial Strategy on what payslip information employers are obliged to provide can be found here.

The effect of the legislation is that employers will have to provide payslips not only to their employees but also to those who are categorised as workers.

The new payslip requirements can be summarised as follows:

Variable pay

Information must be provided on the payslip where the worker’s pay varies depending on the number of hours he/she has worked, for example, where a worker is paid hourly. The information must include the number of variable hours worked and the rate of pay received in respect of that work. The hours can be shown as a total, broken down for different types of work, or for different rates of pay if necessary.

If a worker is salaried, but receives additional pay for working overtime, only information on the additional hours and associated pay must be detailed. The workers salaried hours and associated pay need not be detailed.

Variations caused by unpaid leave or statutory sick pay

Where a worker receives a fixed monthly salary there is no requirement to include information on the payslip to account for variations in pay that have arisen as a result of the worker taking unpaid leave or being in receipt of statutory sick pay. Pay variances such as this only arise due to the worker departing from his/her normal working and pay arrangements; they do not arise as a result of the amount of time worked.

However, if a worker is paid according to the amount of time worked and takes unpaid leave or receives statutory sick pay, any hours they did work will still need to be included on their payslip.

Providing the payslip

The guidance allows for payslips to be provided in hard copy or electronically.

Enforcement

A worker is entitled to bring a claim in the Employment Tribunal if a payslip is not provided to them, or if the payslip they receive lacks the required information.

If the Tribunal finds the employer has failed to discharge its payslip obligations, it must make a declaration to this effect. The declaration can also be published on the Tribunal website.

Additionally, where an employer has failed to provide a payslip, the Tribunal may order the repayment of any un-notified wage deductions made in the 13 weeks preceding the presentation of the claim, even if the employer was otherwise properly entitled to make the deductions.

Our tips for employers

  • In advance of 6 April 2019, employers should reconsider their workforce to determine whether it has any non-employee workers.
  • Where a worker is identified arrangements will need to be put in place to ensure they receive a payslip for any pay period beginning on or after 6 April 2019.
  • It is advisable to inform workers in advance of 6 April 2019 that they will be receiving a payslip and the information it will contain.
  • Employers may also wish to ask employees how they wish to receive their payslip (hard copy or electronically). This will remove any potential argument that the worker did not receive a payslip.

The Regulations focus on the need to identify whether those providing a service are truly an independent contractor or a “worker”. As we have seen there are several significant cases before the courts and Employment Tribunals at present, where individuals who were designated as independent contractors, have argued they are “limb (b) workers” or employees. If an employer decides to provide a contractor with a payslip, and therefore recognise their status as a worker, this will have wider, and potentially costly, implications on matters such as holiday pay, pension entitlement and whistleblower protections. As ever in employment law decisions taken in the light of one piece of legislation may have significant ramifications in other areas. Before deciding whether to categorise someone as a worker employers will no doubt wish to consider very carefully whether an individual is a worker.