Payment of Wages
The lack of a written pay statement or payslip is a common employment issue reported to CAB and this article will look at rights around the payment of wages and what should be included in a pay statement.
An employee will have the method by which they are paid (by cash, cheque or bank transfer) defined by their contract of employment. There is no statutory right to have wages paid in a certain way, for example, in cash.
All employees, irrespective of the number of hours they work, are legally entitled to a written statement of their main terms and conditions of employment within two months of the date when their employment started. This statement must provide information on how frequently wages will be paid, for example, weekly or monthly. The written statement is evidence of the contract of employment but does not contain everything that would be in the contract. The contract should also give details of when wages are paid and if these are paid in advance or in arrears.
If the employer changes the method or timing of paying wages this could be a change to the contract of employment. Any changes to a contract of employment must be agreed by both parties.
Most employees have a statutory right to receive a detailed written pay statement from their employers at or before the time of the payment of wages. Every pay statement must give the following information:
- the gross amount of the wages or salary;
- the amounts of any fixed deductions and the purposes for which they are made, for example, trade union subscriptions;
- the amounts of any variable deductions and the purposes for which they are made;
- the net amount of any wages or salary payable;
- the amount and method of each part payment when different parts of the net amount are paid in different ways, for example, the separate figures of a cash payment and a balance credited to a bank account.
An employer may choose to give either a pay statement which specifies the amounts and purposes of every fixed deduction separately or a pay statement which specifies only the total amount of all fixed deductions without any explanation of their purpose. In this case the employer must give the employee a standing statement of fixed deductions (which identifies all deductions from the wages) at or before the time the pay statement is issued. If a standing statement is used it must be in writing and must for each item deducted state the amount, the intervals at which the deduction is made and the purpose or description of the deduction. This statement must be reissued at intervals no longer than twelve months apart incorporating any changes.
If an employer fails to provide an itemised pay statement or, there are queries about what should be included in the pay statement or standing statement of fixed deductions, or an employee has had certain deductions made which are unauthorised, the employee should raise a grievance with their employer.
Further information on the payment of wages is available from your local CAB or on the Department for Employment and Learning website at delni.gov.uk. Guidance on the payment of wages can be found on www.nidirect.gov.uk if you are an employee or worker and www.nibusinessinfo.co.uk if you are an employer.
Siobhan Harding is an Information and Policy Officer with Citizens Advice.