New Payslip Regulations

New rules for payslips took effect on 6 April 2019. There are two main changes. As well as employees you must provide payslips to individuals classed as “workers” for the purposes of employment law (see The next step ), even though they bill you for their services as self-employed individuals.

If an individual’s pay includes an amount based on an hourly rate, their payslip must show the number of hours that equate to the amount being paid. Plus, you must show a total for the pay period for each type of hourly pay. For example, total overtime hours.

Workers are individuals who work for the business but are not employees. The terms “employee” and “worker” are commonly used and to some may mean the same thing. From a legal perspective, employee and worker are different types of employment status. The distinction is important because employment status defines an individual’s employment rights.

An individual is likely to have the status of an employee where all of the following tests are met;

• the individual is required, under the terms of their contract, to provide their services personally to the employer – in other words, they aren’t permitted to send a substitute to carry out the work on their behalf
• the employer is obliged to provide the individual with work and, in return, they are obliged to carry out that work for an agreed salary or wages, and on terms and conditions laid down by the employer
• the employer exercises a sufficient degree of control over the manner in which the individual carries out their work which is consistent with an employer/employee relationship. For example, the individual is subject to the employer’s policies and procedures and is obliged to work set or core hours
• the individual works under a contract of employment which can be written, verbal or implied.

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