There are lots of new employment laws landing this April. But the one that’s going to have the biggest impact on your business is the overhaul of payslips.
Here we breakdown the most frequently asked questions about this new law, and explain how to get your payroll processes up-to-date before 6th April. Let’s jump in…
- What’s the new law?
It’s called the Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) (No.2) Order 2018.
- What does that actually mean?
From 6th April 2019, you need to give all workers an itemised payslip. Previously, you only had to give them to employees.
- What information do I need to include on payslips?
You need to include any deductions you make, the gross salary (the wage before deductions) and the net amount (the take-home pay).
And if your staff’s pay is affected by a change in their hours, you need to put these hours on their payslips.
- That’s confusing. Can you give me more detail?
Sure. But it’s best if we explain this with examples. Here’s your first one:
- You only pay your worker for the hours they work. In this case, you need to include the total number of hours they worked on their payslip.
Make sense? Great, now let’s move on to the second example:
- Your salary-paid employee does overtime and you pay them an hourly rate for their extra hours. In this case, you only need to put the number of hours of overtime they worked on their payslip.
So basically, if your staff get paid for the number of hours they work or they get different pay for working certain hours, you need to include these hours on their payslip.
- What risks are there to my business?
You need to make sure that you start giving workers itemised payslips from 6th April, or you could face an employment tribunal.
Not only that, but with itemised payslips it’s easier for HMRC to spot if you’re paying below the National Minimum Wage. If you are, you could face fines of up to £20,000 per worker.
Don’t forget, the National Minimum Wage increases on 1st April. Find out what the new rates are in our detailed guide.
- How do I prepare my business for this new law?
First, you need to identify the workers (if any) in your business. You can do this by looking at your staff’s contracts.
Then, you need to make sure you change your payslips in time—all pay periods that start on or after 6th April will need to have hours on them for staff affected by this new law.
And if you need help to change your payslips, you can call BrightAdvice for confidential, practical support.
Our HR specialists are on hand to help you get your head around itemising payslips, and the difference between employees and workers.
Plus, there’s no legal jargon, just clear advice that’s perfectly tailored to your business. So don’t wait another minute…
Call our experts now on 0800 783 2806.