Earlier this year two orders were laid before Parliament that will effect change to Section 8 of the Employment Rights Act 1996 (‘the 1996 Act’). Together they will obligate the employer when making payment by reference to time worked to clearly display the number of hours paid.
With effect from April 2019 the order amends section 8 of the 1996 Act to add to the particulars required within an itemised pay statement to also contain information regarding the number of hours worked by the employee for which they are being paid, but only in situations where the employee’s pay varies as a consequence of the time worked. The amendment states:
“…where the amount of wages or salary varies by reference to time worked, the total number of hours worked in respect of the variable amount of wages or salary either as:
(i) a single aggregate figure, or
(ii) separate figures for different types of work
The amendments made by the order do not apply in relation to wages or salary paid in respect of a period of work which commences before the date the order comes into force.
In addition, the Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) (No.2) Order 2018 (https://goo.gl/8BSgMx) provides for an additional change that extends the right to receive an itemised pay statement, together with the ‘associated enforcement provisions’, to all workers and not just employees who work under a contract of employment.
The government, during informal consultation in 2017, apparently looked at other options which included requiring all employers to state on the payslips of all ‘timed’ employees, the number of hours and pay for NMW purposes (as defined by the 1998 Act). They also considered a non-regulatory option that would see employers voluntarily provide the hours paid for on the payslips of their employees; and, in parallel, guidance would be issued, and promotional campaigns would be run. Neither it seems were considered appropriate.
What does this mean for you?
From April 2019 you will need to ensure you provide the hours for any variable paid employees or breakdown the hours and rates.
We have prepared payslips which will not limit the amount of elements shown, but if you don’t breakdown the hours as per the new legislation you will need to start preparing for the new change.
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