The world of payroll is constantly evolving, from Real Time Reporting to Auto Enrolment. The latest legislation change in April will require all employers to provide payslips to all workers and also show hours on payslips where an employee’s pay varies by time worked..
Workers are entitled to a payslip from April 2019
Still to this day employees do not receive a payslip. From April this will be a statutory right for all workers including those that are casual/zero hour.
Showing hours on payslips
From April 2019 you are required to show additional information for employees who’s pay varies by hours worked.
To summarise the number of hours worked must be detailed on the payslip.
For a worker that has a permanent fixed salary each week/month you wouldn’t be required to show detailed hours. Although if they worked overtime these would have to be shown as hours under a separate figure.
Hours worked can be marked down as an overall total or they can be broken down into separate figures for different hourly rates.
What if a worker’s pay varies due to unpaid leave or statutory sick pay?
If an employee is paid according to hours worked and takes unpaid leave or statutory sick pay the hours they worked would still need to be detailed on the payslip for that period.
If a workers hours do not vary as they are paid a fixed salary there is no need to use hourly figures when pay varies due to unpaid leave or statutory sick pay as on this occasion the variation in pay cannot be helped.
Enforcing the new legislation
If an employee does not receive a payslip or they believe the payslip they received lacks information they may bring a claim to an employment tribunal.
Here are a few examples of when you may have to report hours
Employees that are paid hourly
An employee is paid £8 for each hour that he/she works. This can vary each week (sometimes 16 hours per week or on other occasions 25 hours per week) In this case the total number of hours worked each week must be recorded on the payslip. Prior to the new legislation this may have been recorded as a figure.
Workers that are paid a daily rate rather than hourly
Some employees can be paid a daily rate rather than hourly (as long as this meets the national minimum wage). As workers pay varies by how many days are worked then the hours worked would have to be shown rather than the daily rate.
An employee contracted to work a 40 hour week with a set salary with no overtime etc has no requirement to show hours worked.
A Salaried Worker with overtime/additional pay
An employee is contracted to a 40 hour week however there are some months when the workload is higher meaning that they are sometimes required to work extra hours. When this happens they are paid an overtime rate for any extra hours. As the contracted hours do not change these can still be marked as an overall salary figure. It would just be the overtime that needs to be recorded separately as hours.
A salaried worker that takes unpaid leave
An employee is salaried and they have taken all of their annual leave so they decide to take a week off unpaid. In this case there would be no requirement to shown hours worked on the payslips. On this occasion the employees pay is only varied because of an absence from normal working hours.
So to summarise this legislation doesn’t really affect workers that are salaried unless they work extra hours. Any workers with variable hours will need the hours marking down going forward.
Should you require any advice on this matter then please contact our dedicated payroll team on 01472 604628