PAYSLIPS - 23.03.2015

Is it OK to send electronic payslips?

Sign of the times

One of our subscribers has contacted us for advice regarding payslips. Currently, they give these to all employees in hardcopy format but would prefer to move over to an electronic system whereby they’re issued to employees each month via e-mail. But having sounded staff out on this idea a few people have raised objections - including one complaint that “this is actually illegal” . So is it OK for an employer to issue electronic payslips or not?

The law on payslips

To answer this question we first need to look at s.8 of the Employment Rights Act 1996 . It says that an employee: “has the right to be given by his employer, at or before the time at which any payment of wages or salary is made to him, a written itemised pay statement” and further defines the information which must be included in it at the time.

The issuing of payslips via electronic means is not specifically prohibited by the Act, which indicates that the process is legal.

No objections

There is little official advice available on the issuing of electronic payslips, but HMRC has no objection to it. Since 2011 it has also allowed P60s to be issued in an electronic format.

Tip. Furthermore, although some employees might raise concerns along these lines, electronic payslips are also accepted as proof of income by banks, building societies, etc.

What’s our advice?

In our view, provided an employee: (1) fully understands how their employer’s electronic payslip system works; (2) has readily available access to e-mail; (3) receives their payslip via e-mail either before or at the point which their wages or salary is paid; and (4) can always obtain copies of their payslips in a hardcopy format (even after employment has ceased), there shouldn’t be any problem.

Tip 1. Don’t automatically use an employee’s work e-mail address for this purpose - always ask them to confirm in writing which e-mail address they would like their electronic payslips sent to (see The next step ). Also make it their responsibility to inform you about any changes but do verify the selected e-mail address at least once a year.

Tip 2. Where you know an employee is going to be off work for an extended period of time, e.g. due to sickness absence or maternity leave, check that they will still be able to access and print their electronic payslip. If not, or you’re unsure, send them one in a hardcopy format to be on the safe side.

Tip 3. Although some employees will object to electronic payslips citing security and/or data protection reasons, it’s arguable that properly thought out systems are actually far safer all round - we all know of employees who leave their opened payslips lying around for all to see.

For a free employee payroll information form, visit http://tipsandadvice-personnel.co.uk/download (PS 17.07.05).