From 6th April, changes will come into effect to the information that must be included on a payslip. It means that all workers will be entitled to a payslip that includes the actual hours they have worked.
The UK government noticed that some employers had been disregarding (inadvertently or deliberately) UK Employment Law and, in turn, denying employees their rights to minimum pay. It was found that workers on zero or low hour contracts were the most vulnerable, as employers were expecting workers to be available on demand with no or limited guarantee of work or pay. As a result, employers might not have been meeting their obligations concerning deductions and employee rights, and employees would find it difficult to work out the actual time worked and the pay they were entitled to.
Who will these changes affect?
The payslip changes should be applied for all employees who work for a company or have a contract of employment, which includes agency and zero-hours staff. However, there are some workers not affected by the changes including:
- Merchant seamen
- Those in the police service
- Masters or crew members in share fishing
What do employers need to do to prepare?
It’s best to change your processes now rather than wait until 6th April. This may involve a formal review of your current payroll processes in line with the new law, and ensuring you keep records of the hours your staff have worked.
Do employers need to make any retrospective changes?
No. The rules only come into effect from the date of implementation, so you don’t need to go back and amend information from previous pay periods, nor do employers have an obligation to provide retrospective detailed payslips to their employees.
What happens if businesses fail to comply?
Not providing compliant payslips can lead to an employment tribunal, which can mean adverse publicity and damage to an employer brand. If any unnotified deductions have been made during the 13 weeks before the application of an employment tribunal, the employer could be made to pay compensation up to the aggregate amount of these deductions. This could be a legitimate deduction like PAYE or NICs but still be subject to a financial award if the employee hasn’t been notified.
For all of the latest news and insights surrounding UK employment legislation, stay tuned to the Mango Pay blog.