Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) (No. 2) Order 2018 — House of Lords, 2018-04-16
Topic: Labor
Oliver Michael Robert Eden (Conservative, Centre-right): My Lords, the order was laid in the other place on 8 February 2018 Providing workers with transparency over their employment rights underpins good work. It leads to a motivated and productive workforce. In the Government’s response to the Taylor review of modern working practices, we welcomed the principle of increasing transparency to workers The order goes beyond the recommendations made in the review. It was laid alongside a separate order, entitled the Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order 2018. Together the two orders will provide workers with more information about their pay and help them to spot any cases of underpayment Specifically, the orders will give all workers in all sectors the right to regularly receive a payslip—addressing the current anomaly that only employees, a sub-category of workers, are legally entitled to receive a payslip. It will require all employers to provide clear information on the number of hours that workers are paid for in their payslips. This will ensure greater transparency over how their pay is calculated and what they are paid for Although a significant number of employers already provide their workers with a payslip, up to 30,000 workers do not receive one. They will once the order comes into force. The other order is subject to the negative resolution process. That order will require employers to clearly record the number of hours that time-paid employees are paid for in their payslips. This means that up to 1.6 million people will be entitled to receive hourly information in their payslips. It is important to note that the hours recorded in employees’ payslips are the hours they are paid for—not hours for national minimum wage purposes as defined by the National Minimum Wage Act. This information will therefore assist workers in spotting and addressing incidences of underpayment—including, but not limited to, national minimum wage underpayment When a worker thinks they may have been underpaid, I encourage them to raise this with their employer. However, where this is not possible, workers should contact ACAS for free and confidential advice I thank the independent and expert Low Pay Commission, which first recommended the need to provide greater transparency over pay in staff payslips. Its recommendation proposed that the Government, "considers introducing a requirement that payslips of hourly-paid staff clearly state the hours they are being paid for" To develop our policy, the Government engaged with a wide range of stakeholders. They included worker and employer representatives and payroll and software providers. The majority of stakeholders supported an initiative that would encourage greater transparency and ensure that information is shared more widely with workers. The majority of employers are already compliant with this proposal and already provide all their workers, not just their employees, with a payslip. Some employers also already provide a breakdown of the hours worked. However, a significant minority do not. The order that I move today will ensure that all employers converge to the good practice evident during our consultation with stakeholders The Government are committed to creating an economy that works for everyone in terms of fair pay and fair working conditions. Bringing these orders into force is one of many government interventions to tackle non-compliance and ensure that workers are paid fairly. We are clear that anyone entitled to the minimum wage should receive it. This month, the national living wage and national minimum wage all increased above inflation. Those increases benefited over 2 million workers A rising minimum wage means a higher risk of non-compliance. Therefore, investment in minimum wage enforcement has nearly doubled. We now spend over £25 million annually on ensuring that employers meet their legal responsibilities, up from £13 million in 2015-16. When employers pay workers under the minimum wage rate, they face returning all back pay they owe to their staff, paying a fine of up to 200% of the underpayment, and being publicly named under the Government’s naming scheme I am proud to lay these employment rights before the House. We all expect a basic fairness in the workplace. The right to receive clear payslips is just one element of the Government’s good work agenda, which was published in February, following the review of modern employment practices. It underpins our vision for a workforce with fairer and more transparent employment practices, whereby workers can hold their employers to account for being paid fairly and for all hours worked. It will form an integral part of our efforts to prevent underpayment of the minimum wage. I commend the order to the House.