Itemised pay statements for all workers

The first new employment legislation has been passed for a long time! The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) (No.2) Order 2018 SI 2018/529 has been made recently.

Written itemised pay statements

The Order will amend Ss.8, 9, 11 and 12 of the Employment Rights Act 1996 with effect from 6 April 2019. It means that every worker will have the right to be given a written itemised pay statement at or before the time at which any payment of wages or salary is made to him / her.

Definition of a worker

The meaning of “worker” for purposes of the Employment Rights Act 1996 is defined in S.230(3) of the Employment Rights Act 1996. It states that:

  1. In this Act 'employee' means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.
  2. In this Act 'contract of employment' means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing.
  3. In this Act 'worker' means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment, or any other contract, whether express or implied and whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual

Written statement of wages

The written statement will need to include:

  • the gross amount of the wages or salary;
  • the amounts of any variable, and (subject to S.9, which concerns standing statements of fixed deductions) any fixed, deductions from that gross amount and the purposes for which they are made;
  • the net amount of wages or salary payable; and
  • where different parts of the net amount are paid in different ways, the amount and method of payment of each part-payment.

The amendments that will be made and come into force on 6 April 2019 mean that where the amount of wages the worker receives varies by reference to time worked, the statement must show the total number of hours worked in respect of the variable amount of wages or salary.

This may be given either as a single aggregate figure, or separate figures for different types of work or different rates of pay.

What will happen if an employer does not give a statement?

Kate Fretten, a Partner in our Employment Team, says "Where an employer either fails to give a worker a statement (or gives a statement that does not comply with the requirements) the worker will be entitled to make a reference to an employment tribunal to determine what particulars ought to have been included or referred to in a statement."

Kate points out that where a pay statement or a standing statement of fixed deductions is given to a worker and a question arises as to the particulars which ought to have been included, the worker will be entitled to refer that question to an employment tribunal to be determined.

These changes will not apply in relation to wages or salary paid in respect of a period of work which commences before 6 April 2019.

  

At Frettens, all of our solicitors offer a free initial meeting or chat on the phone to answer your questions. If this article raises issues for you or your business, please call us on 01202 499255 and Kate or Paul will be happy to discuss it with you.