Itemised Pay Statements
Why must a pay statement be provided?
All employers must provide workers with an itemised pay statement at or before each pay day. There is no requirement for the employee to request a statement.
What should a pay statement include?
An itemised pay statement must include (1) gross pay, (2) details of all deductions made from gross pay and (3) net pay. Where net pay is paid in different ways, then the amount and method of payment of each part of net pay must also be itemised.
If an employer supplies a worker with a written statement of a fixed deduction to be made each pay day (eg, training costs repaid), then the employer must explain the nature of this deduction once every 12 months in writing.
What happens if a statement is not provided?
If an employer fails to give a worker an itemised pay statement (or deductions are made which were not notified) then the worker can apply to an Employment Tribunal within 3 months for a declaration to this effect, and ask the Tribunal to exercise its discretion to make a compensatory award. The declaration is compulsory, but the compensation award is discretionary.
The maximum amount of compensation that a Tribunal can award is calculated by determining the amount of the deductions (the difference between the gross and net pay) on each day in the previous 13 weeks from the date of application to the Employment Tribunal.