It may have come as a surprise to realise that until this April, not all workers were entitled to a payslip.
From 6 April, all workers now have a statutory right to receive an itemised payslip, including zero hour and casual workers. Up to that date, the right only extended to employees. Employers must now be prepared to provide information on ‘time worked’ with details of the number of hours being paid on workers’ payslips. This can be given either as a single aggregated figure or separate figures for different types of work at different rates. Workers should be able to clearly see that they have been paid for the hours worked at the appropriate statutory rates where relevant.
As the new rules were coming into force, however, the Department for Business, Energy and Industrial Strategy (BEIS) released a survey revealing that many don’t entirely understand all the information on their slips – only 62% were confident about everything they saw. Gaps in understanding were higher for women than men (55% of women compared to 70% of men admitted to not understanding their complete payslips) and younger workers.
April also marked the 20th anniversary of the national minimum wage (NMW), which has risen this year to £7.70 an hour for employees between 21 and 24. At the same time the national living wage saw a record 5% increase to £8.21 an hour for employees over 25, However, the BEIS survey also revealed misunderstanding around entitlement to the NMW, with around 30% believing that only permanent employees are entitled to receive it.
With the new payslip rules now in force, it’s even more important for all workers to be aware of their entitlements and check that they are receiving them. But many people don’t check their payslips, trusting their employers to get it right and assuming deductions are correct. Payroll offices do make mistakes or may have been given erroneous information on pay and allowances. For permanent employees likely affected by April’s increase to auto-enrolment contributions, there is even more reason to make sure everything is present and correct.
Encouraging employees to question anything they don’t understand, and to ask if concerned about unknown deductions, will go a long way to consolidating trust. Ensuring engagement with wages flows into helping workers with informed financial decision-making, pensions planning and alleviating one of the major factors of workplace stress.
If you need to discuss your employer liabilities with our specialist team of Accounting & Business Advisory then drop us a line on 01142 664 432 or info@smhca.co.uk
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