EMPLOYMENT LAW - PAY ISSUES
Employment Law Pay Questions
We list here the most commonly asked questions in relation to employment law pay. If you have any other questions please contact us using the information at the bottom of this page.
What is the minimum amount of pay an employee can receive?
The minimum amount of pay an employee can receive depends on the age of the employee as follows: -
- Main (adult) rate for workers aged 22 and over: £4.10 per hour (from 1 October 2001)
- Development rate for workers aged 18-21 inclusive: £3.50 per hour (from 1 October 2001)
This rate can apply to workers aged 22 and above during their first 6 months employment with a new employer if they are receiving accredited training.
Does a record have to be kept of wages that are paid?
The Inland Revenue requires an employer to keep records of salaries/wages paid to employees. An employer must also provide an employee with an itemised pay statement.
What must the itemised pay statement show?
The statement must show the following items:
- the gross wages or salary - that is, the amount before deductions.
- the amounts of, and reasons for, any 'fixed' deductions (the fixed amounts an employer deducts every pay period, for example income tax and national insurance deductions). If you have already provided a separate "standing statement" about these, you should state the total amount of fixed deductions.
- the amounts of, and reasons for, any 'variable' deductions (those that may change from one pay period to another). the net wages or salary, the employee's take-home pay.
- If you pay parts of the salary in different ways (for example, part by cash and the rest by cheque), how, and how much, you pay for each part.
What is a standing statement?
An employer can, instead of providing all the details about fixed deductions every time give an employee a 'standing statement'. It must be in writing and an employer must issue it at least every 12 months. (The P60 can serve as the standing statement.). It must show for how much and why each fixed deduction is made and when (such as weekly, monthly or quarterly). If there are any changes, the employer must tell its employees in writing or give them a new standing statement.
Does everyone have the right to an itemised pay statement?
No, some people do not have the right to an itemised pay statement.
What happens if an itemised pay statement is not provided?
An employee can complain to an employment tribunal and if the employment tribunal decides that an employer did not give proper notice of any deductions they can order the employer to repay the employee the amount of any such deductions made in the 13 weeks immediately before the employee lodged the complaint.
The tribunal can do this even if the employer was entitled to make the deduction under the terms of their contract of employment. If the employment has ended, the employee must normally make the complaint within three months.
What if the employee disagrees about the accuracy of the statement?
The accuracy of amounts or deductions will depend on the contract of employment.
Employees who think that they have been underpaid can take their complaint to an employment tribunal if their employment has ended or the employer has made an illegal deduction from pay. Otherwise the can claim is to be presented before the civil courts.
Can monies be deducted from salaries/wages?
Generally, unless one of three conditions are met, it is unlawful for monies to be made from monies due to an employee, worker or apprentice. The three conditions that allow deductions to be made lawfully are when the deduction is:
-- required or authorised by legislation (for example income tax or national insurance contributions); or
- authorised by the worker's contract - provided that the worker has been given a written copy of the relevant terms or a written explanation of them before it is made; or
- agreed to in writing by the worker before it is made.
Are there any exceptions?
The conditions set out above do not have to be met where a deduction is made or a payment received:
- to recover an earlier overpayment of wages or expenses by the employer to the worker; or
- as a result of disciplinary proceedings provided for in legislation; or
- a consequence of the worker taking part in a strike or other industrial action; or
- to satisfy a court order or a tribunal decision - provided in the case of a deduction that the worker has given his or her prior written agreement to it.
In addition, where a deduction is made under an arrangement agreed to by the worker in writing for the employer to pay to a third party amounts notified by that third party, the deduction is always lawful under the legislation on unlawful deductions if the employer deducts the amount that has been notified.
There is, however, special protection to individuals who undertake "retail work".
What if the employee/worker disagrees with the deductions?
Employees who think that the employer has made unlawful deductions from their wages can take their complaint to an employment tribunal, regardless of the length of time they have worked for the employer. Such complaints must normally be presented within 3 months of the date on which the monies alleged to have been unlawfully deducted should have been paid.
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