Payslips mandatory for all workers from 6 April
Almost 300,000 workers who previously did not receive a payslip will now do so starting from this week, including those on casual and zero-hours contracts, as part of the government's Good Work Plan reforms
8 Apr 2019
From 6 April, payslips will now have to include the number of hours worked – making it easier for workers to check they are being paid the correct amount.
A further 120,000 agency workers will benefit from the scrapping of the Swedish Derogation, which meant certain agency workers were paid less than full time staff, although this will not come into force until 2020.
This new right ensures that all workers receive a payslip, which forms part of the government’s Good Work Plan – the biggest package of workplace reforms for over 20 years.
It means payslips now have to include the number of hours worked, making it simpler for workers to make sure they are being paid in full, and at the correct rate.
Ministers also brought into law a package of reforms, which will give workers new rights. This includes the repeal of the Swedish Derogation – a legal loophole that enabled some companies to pay agency workers less than permanent staff – and a new entitlement to a day one statement of rights setting out details of a new employee’s leave allowance.
Clare Parkinson, pay and reward expert at Croner said: ‘The beginning of the new tax year on 6 April 2019 traditionally brings with it a number of new requirements which employers must adjust to. This year is no exception and it is important that businesses understand the changes to payslips that will become effective on this date.
‘Importantly, for pay periods starting on or after 6 April, the right to receive an itemised pay statement will be extended to include both workers and employees. Previously this right was reserved only for employees, however businesses must now ensure “workers”, including casual and zero-hours, also receive detailed payslips on or before the date of payment of salary.
‘A failure to provide an itemised payslip to those with a “worker” status could result in a tribunal claim, especially given the attention surrounding workers’ rights.
‘Those who fail to receive their payslip on time, or receive the payslip without the necessary information, may make a claim to the employment tribunal that their right has been breached. If the tribunal agrees that this is the case, they will make a declaration and, in some cases, award the employee an amount equal to any deductions which have been made in the previous 13-week period.’
A significant change to the new payslip rules means that the total number of hours worked must be included on payslips for all workers whose pay varies depending on the amount of time worked.
‘The rules on this can be tricky; all hourly paid workers will be within the scope of this new requirement, as well as salaried hours staff who are paid the same each month for their basic hours but also work overtime and receive extra money for this,’ Parkinson said. ‘In the latter scenario, the payslip will only need to show the hours relating to the overtime, and not the salaried work, because it is the overtime that has made pay vary.
‘Where the number of hours is to be included, the hours must be clearly listed as either one total of all the hours which vary pay, or separate hourly figures for each variation of pay.’
Good Work Plan
Last week, parliament approved the first package of Good Work Plan legislation, some of which will come into effect immediately, with further measures due to come into force from April 2020.
Measures effective from April 2019 include:
- mandatory payslip detailing hours worked; and
- all workers will be better protected from employers who have demonstrated malice, spite or gross oversight, with the maximum additional penalty that Employment Tribunals can use quadrupling from £5,000 to £20,000.
Meaures effective from April 2020 include:
- up to 120,000 agency workers will benefit from the scrapping of the Swedish Derogation – an end to the legal loophole which enables some firms to pay agency workers less than permanent staff;
- new agency workers will receive a key facts page before signing up with an agency, which will provide clarity, particularly around their pay;
- employees will have a stronger voice in the workplace. Employees already have a legal right to make a request to be informed and consulted about issues at work and the threshold for them to request these arrangements will be reduced from 10% to 2%; and
- around 1.5m people are to receive a day one statement of rights setting out leave entitlements and pay.
Business secretary Greg Clark said: ‘The UK has a labour market that it can be proud of and we are committed to continue leading the way in workers’ rights. That is why we have introduced a new right for all workers to a payslip ensuring workers are paid fairly.
‘On top this, the legislation approved by parliament is a significant milestone in our concerted effort to deliver the largest upgrade in workers’ rights in over a generation.
‘This all forms part of the Good Work Plan, which is the cornerstone of our commitment to build a labour market which rewards people for hard work, celebrates good employers and boosts productivity and earning power of workers across the UK.’
In addition, the government has launched a new £1m advertising campaign to raise awareness of the national living and national minimum wage rates to workers and employers. The adverts are part of the government’s ongoing ‘A Fair Workplace’ campaign, which is designed to highlight a range of workplace rights to help workers understand what they are entitled to and ensure businesses comply with the law.
Report by Sara White