From the 6th April 2019 there will be new rules which will change how you issue payslips to workers. Previously, only your staff classed as employees needed to get written itemised payslips. You didn’t need to itemise payslips for any staff classed as workers.
The difference between employees and workers
An employee is someone who works for you under a contract of employment. They have full employment rights.
Workers are different. Like employees, they have a contract with you to do work and be paid for it. Unlike employees, there is usually no ‘mutuality of obligation’ between worker and employer. This means employers don’t have to offer workers work, and workers may turn down any work offered. Workers also have fewer rights than employees. For example, workers don’t have the right to protection against unfair dismissal or statutory notice periods.
From April, you’ll need to break down your workers’ and employees’ payslips according to pay and deductions. Payslips must include:
Gross salary (i.e. the wages you pay before deductions)
The amount deducted from pay, and why
The net amount that your worker takes home after deductions
The amount and method of any part-payment
The number of hours where pay varies depending on the amount of time worked
This aims to increase transparency by allowing workers to check they are being paid for the correct number of hours and receiving the national minimum wage.
Employers will need to check that their payroll systems are set up to produce this additional information in time for April 2019.
Preparing your payroll from April
First, identify the workers in your business who don’t receive itemised payslips.
Determine their working hours and job functions, and how these relate to pay. You’ll then need to work out how much money you take from their paycheque, and why.
Deductions are complicated, but they’re important to get right. Check if an employee gets the same amount for different tasks, or if you pay overtime for different hours worked. Calculate how much you charge them for uniforms or equipment. Record any pay docked for absence or lateness. And make sure you include any salary sacrifice for a non-cash benefit, such as accommodation or transport.
Please get in touch if you have any questions or would like BWM to help with running your payroll. Contact Sue Stephens.