Written Statements and Itemised Pay Statements

Currently, under the Employment Act 2006, all employees are entitled, from four weeks of employment, to what is known as a ‘written statement of employment particulars’. The written statement contains details of the main terms and conditions of employment.

In recent years there has been concern about the use of zero hours contracts and those working irregular or unpredictable hours. Though the feedback that the Isle of Man Government has received from both workers and employers indicates that such arrangements can suit both parties, the Department has committed to a number of measures to minimise the abuse of zero hours contracts.

One of these measures is to extend the right to a written statement and itemised pay statement, currently enjoyed by employees, to all workers.

The Employment Act 2006 requires certain information to be included in a written statement.

Similarly, there is currently a requirement under the Employment Act 2006 that all employees are provided an itemised pay statement, including particular information.

From 1 April 2024 the rights to a written statement of employment particulars and an itemised pay statement will be extended to all workers.

This means that employers, if they have not already done so, will need to provide a written statement of employment particulars to all workers as well as employees. Similarly, employers, if they have not already done so, will be required to provide an itemised pay statement to workers.

There are also a number of changes to the information that must be contained in the statement:

• The method by which itemised pay statements, and any standing statement of fixed deductions are provided to the workers should be given
  
  
• Terms and conditions relating to hours of work, including normal working hours, days of the week the worker is required to work, or whether or not the hours or days may be variable, and if so how they vary or how the variation may be determined, any paid leave in addition to holiday or sick pay, and any other benefits
  
  
• Any paid leave
  
  
• Any benefits of employment not already listed

In terms of itemised pay statements, from 1 April 2024, where a worker is on a ‘variable hours contract’ (e.g. if overtime is worked or the number of hours in each pay period varies) the statements must include the hours worked by the worker.

The changes come into operation on 1 April 2024.

What is changing

In employment law, there are three different kinds of employment status:

• Employee
  
  
• Worker
  
  
• Self-employed

Employees have the most employment rights, while the self-employed have the least.

Employees already have a right to a written statement and itemised pay statement. The right is now being extended to all workers, as well as employees. This follows a similar measure introduced in the UK in 2020.

Who is a worker

An individual is likely to be legally classed as a worker if most of the following apply:

• His or her work is more casual, for example work is less structured or they do not have a regular working pattern
  
  
• He or she is normally required to personally do the work
  
  
• He or she is not offered regular or guaranteed hours by the employer
  
  
• He or she has little obligation to make themselves available for work, but should do work they've agreed to

What this means in practice is that employers should provide, to all those who work for them, other than self-employed contractors and those employed through an agency, a written statement of employment particulars and an itemised pay statement.

What new information needs to be included in a written statement

• The method by which pay slips are provided, e.g. electronically, in paper copy, and how they may be accessed – e.g. in paper copy at a particular location, or provided to individuals at their workplace
  
  
• Whether or not working hours or hours may be variable, and how any variation may be determined
  
  
• Any paid leave
  
  
• Any benefits of employment not already listed

What new information needs to be included in an itemised pay statement

In cases where the amount of wages or salary varies by reference to time worked, the total number of hours worked in respect of the variable amount of wages or salary either as:

• A single aggregate figure; or
  
  
• Separate figures for different types of work or different rates of pay

The text of the changes, incorporated into the Employment Act 2006, is now available.