John Thompson, Chief Executive of the Association of Plumbing & Heating Contractors (APHC), looks at how new rules will change the way employers issue payslips from 6 April 2019.

Incoming legislation means that, from 6 April 2019, the statutory right to receive an itemised payslip will be extended to all workers. Previous to this date, only staff classed as employees needed to receive written itemised payslips, meaning that employers didn’t need to provide itemised payslips for staff classed as ‘workers’.

Workers are different from employees. An employee is someone who works for a company under a contract of employment. Employers can instruct employed plumbers in terms of telling them what work to do, how they should do it, and when. If employees need time off, they will have to ask the employer and any misconduct has to be dealt with via company policy.

Essentially, employees are an integrated part of a workforce who generally drive a company van, wear company overalls, and use company tools to do the job under employer control. It’s key to remember that they have full employment rights.

Like employees, workers have a contract for work but, unlike employees, there is usually no ‘mutuality of obligation’ between a 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. Common types of workers are those on zero hour contracts and casual workers who do plumbing work as and when a company needs them.

This incoming legislation will mean that, from 6 April 2019, the difference between a worker and an employee will no longer matter when it comes to payslips, as everyone will fall under the same rules. This means that employers will need to look into their workers’ payslips carefully as they will need to ensure that they break down workers’ payslips according to pay and deductions.

Payslips will have to include:

• Gross salary before deductions
• The amounts deducted from pay and for what reason
• The net amount due after deductions
• The amount and method of any part-payment (i.e. if work is paid in part by cash and BACS transfer)
• The hours where pay varies (i.e. where different amounts are paid for over-time or working certain hours).

A payslip may be provided in either a physical format or an electronic format that the worker can print. It’s worth mentioning that there are some limited exclusions from the right to receive a payslip, such as for members of the armed forces or merchant seamen and women.

However, employers in the plumbing and heating sector need to ensure they are prepared for these changes, as a worker who thinks that they have not received a payslip, or that the payslip they have received lacks the required information, may bring a claim before an Employment Tribunal.

If the tribunal agrees, it must make a declaration to this effect, which it may publish on its website. The tribunal may also order repayment of unnotified deductions made in the 13 weeks preceding the presentation of the claim, even where the employer was otherwise entitled to make the deductions.

This is separate from a claim that a worker has not been paid properly, such as a claim for unlawful deduction of wages, where other remedies are available.

Additionally, itemised payslips will make it much easier for HMRC to find and prosecute employers who pay below the national minimum wage, while employers who charge for uniforms and equipment need to ensure their practices are compliant, as such charges can tip pay below the minimum wage. In 2018, 173 employers, including TGI Friday and Wagamama, made this mistake and were forced to give £1.3 million to under-paid staff.

APHC members can contact the APHC Business Advice Helpline for further guidance and support on itemised payslips for workers.