pay: an overview

This section of the Guide covers the law and good practice on pay. In general, employers are free to decide what their workforce is paid, but there are some legal constraints. One of the most significant is the need to respect employees' rights under their contract of employment. This section explains the contractual principles that underlie how employees are paid (contractual issues). It also describes employers' duties to provide employees with written information on their pay details when they are first recruited and itemised pay statements each time they are paid (documenting pay).

Another important legal consideration is that most workers must be paid at least the national minimum wage. This section outlines who qualifies for the minimum wage and how it is calculated (the national minimum wage).

Although employers have a large degree of freedom in how they set pay rates, the law prohibits employers from allowing a worker's pay to be affected by his or her age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex or sexual orientation. It is also unlawful to pay a worker less because he or she works part-time or on a fixed-term basis, unless the employer has objective justification for doing so. This section summarises how discrimination law affects payment systems (discrimination in pay).

Deductions

There are many reasons why an employer may make deductions from a worker's pay, from tax and National Insurance contributions through to loan repayments. The law prohibits employers from making deductions from workers' pay, or receiving payments from them, unless certain conditions are met. This section explains these rules (deductions from pay), and how deductions can include shortfalls and non-payments. Finally, the section summarises the circumstances in which an employer may be under a legal duty to make deductions from a worker's pay (other deductions from pay ).

Other legislation on pay

Various pieces of employment legislation require employers to pay employees in certain specific situations. These are covered in other sections of the Guide:

• paid annual holidays (holidays);
• statutory sick pay (sickness absence);
• statutory maternity pay (statutory maternity pay ), paid time off for antenatal care (antenatal care ) and paid maternity suspension (alternative work );
• statutory paternity pay (statutory paternity pay );
• statutory adoption pay (statutory adoption pay );
• guarantee payments (guarantee payment ); paid time off for trade union officials (time off for union duties ), health and safety and workforce representatives (time off ), and pension fund trustees ( Trustees' paid time off );
• paid time off for study and training (time off for study and training);
• payment during notice of dismissal (wages during notice ); and
• paid time off during notice of redundancy to look for other work or arrange training (time off during notice period).

Related links

acas: pay

Equality and human rights commission 

HM revenue & customs