For the first time in many years the Government will introduce new legislation which will change the reporting on employee payslips. From 6 April 2019, employers will need to issue staff with payslips that detail how the payment has been calculated in cases where the rate of pay and hours worked are variable.
This government initiative is intended to help employees identify what they are being paid and equate that with worked time. It will also help the employee to better identify if the employer is meeting minimum pay obligations (National Minimum Wage and National Living Wage).
How will this affect the employee’s payslip reporting?
- where a worker has a fixed salary each week/month with no overtime to pay, there is no requirement to show hours worked on the payslip.
- where a worker has a fixed salary each week/month, and works variable overtime with additional pay at an hourly rate, the number of overtime hours worked and the rate of pay need to be shown on the payslip.
- where a worker is paid by daily rate, the hours worked and the rate of pay need to be included on the payslip.
- where a worker is paid variable hours in the week/month and the hours are recorded as a lump sum amount, the actual hours worked and the rate of pay must now be reported on the payslip rather than just the payment value.
To ensure a smooth transition, employers need to interact with all relevant stakeholders to collect the right information: how many hours their variable hours staff work, and that they are paid at the correct hourly rate.
These hours should then be recorded on the employee’s payslip.