Our thoughts on the latest developments in our specialist sectors and services.

Workers’ payslips and broader rights

01 May 2018

The Government has announced that with effect from 6 April 2019, the right to receive an itemised payslip, currently applicable to employees, will apply to workers too.

The obligation is to provide particulars of:

  • Gross amount of wages or salary
  • Amounts of any variable and fixed deductions made under purposes for which they are made
  • Net amounts of any wages or salary payable.

For employees, this is a straightforward process and one with which there is typically a high level of compliance. However, the practical issue facing businesses who use ‘workers’ will surely be the task of identifying whether an individual is a ‘worker’ and so is entitled to receive an itemised payslip, or is a genuinely self-employed individual who will have no such entitlement. A number of complex tests of status have been established by the Courts over many years. The task is made no easier by the fact that whilst employment legislation distinguishes between the worker (who, despite not being an employee has a number of statutory rights), and the person carrying on business on this or her own account who does not, HMRC does not however make the same distinction, treating workers as self-employed for tax purposes, even though, they increasingly benefit from employment legislation. The key exceptions to that are protection from unfair dismissal and rights to redundancy pay which apply to employees only.

The direction of travel is clearly towards greater protection for individuals who provide their services personally, as workers. This makes the distinction between employees and the genuinely self employed ever harder to identify and delineate. Businesses using the service of individuals who are not employees must therefore remain vigilant as to the correct employment status of those with whom they are dealing in order to avoid unexpected liability to both individual and HMRC.

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