Payroll is one of the most important areas in a business. If staff lose confidence in the payroll system and don’t get paid on time, there can be far-reaching consequences and can even end up costing the business extra money. So, what are employee’s right around late payroll and how can it be avoided?
Employee rights around pay
Because pay is such a key part of working life and many people rely on regular, timely payments of their wages, there are a number of rights around the matter of pay. These include:
- Employees are entitled to a written pay statement (pay note or payslip)
- These must be given out on or before the pay date
- Fixed pay deductions must show on the payslip with information and amount such as national insurance and income tax
- Part-time workers should get the same rate as full-time workers and this must consider national minimum wage and national living wage
The interval that employees are paid doesn’t matter specifically but it should be laid out in their contract. This might be weekly, monthly, every set date of the month or any other interval. This is set out in a way that there’s no manoeuvrability in it – pay must be received on that date or before if the date is on a weekend or bank holiday.
What happens if payroll is late?
Because this is laid out in the employee’s contract, if payroll is late then this can be seen as a potential breach of contract. There is a contractual obligation to pay staff on a certain date or before it depends on the day or other factors. The normal route to dealing with this is with claims for costs incurred.
For example, if your staff experience bank charges because Direct Debits were declined due to the wages not being present, they can request this be refunded by the employer. Other problems could include being unable to buy groceries or having to borrow money to cover costs because their wages weren’t paid on time.
Employers are responsible for losses arising directly as a result of the breach of contract. However, they are allowed to ask for some proof of these costs or charges. Staff should be made aware of the problem as early as possible and steps taken to minimalize costs such as stopping Direct Debits. Cash advances can be offered to help with living costs until payroll is corrected.
Using Trace to avoid late payroll
The easiest way to ensure that payroll is always conducted on time is to have an expert do it for you and this is the service that Trace Payroll offer. We are dedicated and experienced payroll provider and we can take over managing the payroll for your business to ensure this isn’t a problem.
Our service including loading all data, handling amendments and tax code changes and sorting back pay and adjustments. We then check all information for accuracy before creating printed or electronic payslips for staff. Finally, we create the BACS transfer to ensure the payments are always paid on time, accounting for weekends and any holidays. This means your business doesn’t need to worry about late payroll again.
Get in touch with our team on the details below to find out more.