Electronic Payslips and The Law

Here in the UK, the Employment Rights Act 1996 states that an employee “has the right to be given by his employer, at or before the time at which any payment of wages or salary is made to him, a written itemised pay statement”

This statement is accompanied by a further clarification of what information should be included in the pay statement.

However, nowhere in this act does it state that payslips cannot be issued electronically.  HMRC has made no objection to their introduction, and also allows P60s to be issued in an electronic format (since 2011).

As electronic payslips are a format accepted by the HMRC, they are also accepted by banks and other financial institutions as proof of income.

Recommendations for issuing electronic payslips

However, in order to avoid falling foul of the spirit in which the Employment Rights Act outlines employee rights to pay statements, it is important that certain considerations are made.  The spirit of the law, in this case, is to have a clear and easily available communication between employer and employee regarding payment of their wages or salary.

The following considerations are advisable:

  • Deliver electronic payslips in an easily readable format (e.g. PDF attachment) prior to, or at the point their salary or wages are paid.
  • Ensure employees provide the most suitable email address for receipt of payslips – this is not necessarily, and should not be assumed to be, their work email address.
  • Place the onus on employees to inform you of any change to their preferred email address, but still validate this (requiring a response to an email to confirm) every 12 months.
  • If employees do not have secure and discrete access to email, or the ability to print from email, provide them with a printed payslip instead.
  • When there is a change of circumstance, such as prolonged sick-leave or maternity leave, ensure that the employee can still access and print their payslips – or arrange for a printed payslip to be delivered in place of this.
  • Provide access to print payslips, at no extra cost, from the original electronic copies.
  • Provide employees with access to their archived payslips, allowing printing of old copies.
  • Explain clearly to employees how to print payslips.
  • Explain clearly the security and efficiency benefits of electronic payslips to employees.

Making electronic payslips easy with Sage Online Payslips

One of the biggest concerns about going electronic is the east of access to them. Sage Online Payslips keeps your payslip production process simple and straightforward and is a great alternative method. The safe, secure online portal allows your employees access to their payslip online 24/7 from any device.

This reduces your costs by eliminating the need to print and post and can save time dealing with payroll queries as you can both view the same information from one place. You can even use the portal homepage to send messages to your staff, such as holiday hours and bonus payments.And, if your employees record and submit the hours they work to you, Sage Online Timesheets is the latest addition to the Sage Payroll Online Services.

Get in touch to find out more.

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