How to reduce payroll paper output

with e-payslips,

P11Ds & P60s

Summary

Traditionally, Payroll and Human Resources Departments are some of the biggest producers of printed matter in many companies.

In recent years HR departments have reduced their paper trails considerably, helped by advances in HR Software and document management systems.

However, most Payroll departments still routinely churn out huge quantities of printed payslips and associated pay-related communication to their employees.

In this document we examine the alternative methods available for communicating pay-related information to employees and outline your legal obligations as an employer.

How to reduce payroll paper output.

Here’s what we’re going

to cover:

The business & environmental case for change

Exploring the alternatives

Your legal obligations as an employer

Employees without computer access

The pros and cons

The case for change

There can be few organisations today that do not feel the need to give some consideration to the environmental impact of their business activities. At the most basic level this process often starts with reducing the amount of printing that is carried out on a day to day basis.

Unlike some green initiatives, which can require capital investment, reducing the output of printed matter has the added attraction of associated cost savings. Reducing printing saves on paper, printers and expensive printing consumables.

Business and environmental factors.

The environmental and financial costs of paper payslips go way beyond the paper that the pay information is printed on.

In calculating the true cost it is important to consider the environmental costs associated with manufacturing and distributing printers and consumables, along with the financial cost of purchasing these.

• The energy required to run the printers.

• The energy associated with distributing payslips.

• The cost of stamps.

• Bureau costs.

• Labour costs

The case for change

Tip: Don’t forget to factor in producing P60s and P11Ds! And responding to employee requests for duplicate documents.

Exploring alternatives

If you process your payroll in-house and want to get away from printed payroll documents then you will need to invest in the right technology. The tools that you require are typically delivered as part of a HR and payroll system. Depending on the capabilities of the software chosen you should be able to distribute payslips via:

• Employee self-service and/or

• Email

If you outsource your payroll then some bureaus can now offer the option of e-payslips. Those with an integrated HR software option may be able to deliver pay documents via employee self-service.

Choosing the right technology.

Exploring alternatives

The exact functionality available will vary from supplier to supplier, but essentially browser-based self-service systems deliver an accurate, easy and cost-effective way for keeping employee records up to date, managing certain HR processes such as holiday bookings and authorisations and for dealing with employee requests for information.

However not all systems will have out-of-the-box capabilities to deliver payroll documents via Employee Self-Service. You require:

• Payroll software with the ability to output payslips in this format

• An integrated employee self-service module

• And for P11ds, an integrated Expenses & Benefits module

Using an employee self-service solution.

Exploring alternatives

Some payroll software systems allow users to schedule the automatic email distribution of password protected .pdf payslips, P60s and P11Ds to all or selected employees. In addition this service is also offered by some Payroll Bureaus.

Distribution via email.

• You could send emails as well as, or instead

of, making documents available via employee self-service.

• Potentially cheaper than implementing employee self-service.

• Being able to check on current and historic documents necessitates the employee safely archiving or saving their emails.

Your legal obligations

The requirement for employers to provide an “itemised pay statement” is set out in Section 8 of the Employment Rights Act 1996. It says: “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.”

Notice that:

• the payslip must be “given” to the employee by the employer,

• this must be done “at or before” the time when the payment is made,

• the payslip must be “written”.

There is no stipulation that the payslip must be printed on paper and physically given to the employee.

HMRC agrees that providing electronic payslips is entirely permissible.

Your legal obligations The critical issue, when planning the introduction of any kind of electronic payslips, is whether the electronic delivery arrangements meet the statutory requirements.

Consider the following:

Is each employee “given” a payslip?

Is the electronic payslips available on or before payday?

Can employees make a “written” copy of their payslip?

Now let’s see how to fulfil those requirements.

???

Your legal obligations Is each employee being “given” a payslip?

The responsibility is on the employer to make the payslip available to the employee. Here are some important things to remember:

• If the employee does not know where to find the payslip or has no computer access to it, then it has not been “given” to them.

• Employees who normally view or print out their payslips at their desks or workstations may not have access to them when they are sick or on holiday.

Tip: Personal circumstances change so there must always be the option for employees to revert to paper payslips.

Your legal obligations Is the payslip always available on or before pay day?

The statutory requirements cannot be ignored because the penalties can be severe.

• The objective of the legislation is to ensure that employees are aware of all of the deductions that have been made from their pay at each payday.

• If they are unable to see those details on payday they can make a complaint to an employment tribunal.

• If the tribunal considers that the statutory requirements have not been met, the employer can be required to repay to the employee up to 100% of all of the un-notified deductions made from the employee’s pay in the 13 weeks prior to the date of the complaint, even if they were legitimate or statutory deductions.

Your legal obligations Things to consider:

• Can all employees actually see their payslip on payday if they wish to do so?

• What about employees who only have access to their payslip on their work computer?

• What about employees who do not normally work on their payday?

• Employees who normally view or print out their payslips at their desks or workstations may not have access to them when they are sick or on holiday.

Your legal obligations Can employees make a “written” copy of their payslip?

Many employees will be happy just to read their payslip details on-screen and file the document away somewhere, but others, for a variety of reasons, will want to print it out.

• Employees without printing facilities, or who have privacy concerns about printing their payslip on a network printer, may need to be given paper payslips instead.

• A further practical problem is that a payslip printed out by an employee may not always be accepted as valid proof of earnings for mortgage, loan, work permit or other status purposes. As e-payslips become more widespread more institutions are starting to accept them. However you should be prepared to supply copy payslips or to sign and stamp the employee’s payslip if needs be.

Employees without PCs

Another common argument that companies have for not implementing electronic payslips is that some or all of their employees, perhaps in a manufacturing or shop floor environment, do not use computers or have access to the internet.

This will undeniably impact on an employer’s ability to meet statutory requirements, but all is not necessarily a lost cause.

Can e-payslips work in your business?

Employees without PCs

Even in environments where most employees do not use computers in the workplace, some companies still successfully use e-payslips or implement employee self-service solutions.

Often employees will have internet access outside of work. This may be via a PC in the home or a smart phone. Some employee self-service solutions now have mobile apps.

Many companies provide “kiosks” or PCs in a quiet area to ensure all employees can access the benefits provided by a Self-Service solution, whatever area of the business that they work in.

Employees without PCs

There will be individuals for whom electronic payslips really are not a workable solution. Therefore it is important to:

Offer all employees a choice. In our experience the most common scenario is that employees have the opportunity to opt-out of e-payslips if desired.

Ensure that your payroll software incorporates the flexibility to use different distribution methods for different employees without time-consuming manual intervention.

The pros and cons

Pros

Considerable financial, time and environmental savings are deliverable.

Employees can view (and print if desired) both their current payslip and also historical pay information, including past payslips, P11ds and P60s.

Convenient source of information and reference for employees.

Potentially reduced administrative burden on Payroll Department in responding to employee requests for replacement documents and other requests for information.

For more payroll ideas download our free e-book “7 Top Tips for Streamlining Your Payroll Processes”.

The pros and cons

Cons

May require additional investment in technology.

The option of paper documents will need to be made for employees who permanently or temporarily have no access to a computer and / or the internet.

Many employees will be happy just to read their payslip details on-screen but others, for a variety of reasons, will want to print it out. Employees without printing facilities, or who have privacy concerns about printing their payslip on a network printer, may need to be given paper payslips instead.

Occasionally a payslip printed out by an employee may not be accepted as valid proof of earnings for mortgage, loan, work permit or other status purposes, requiring the employer to make special arrangements to supply copy payslips or to sign and stamp the employee’s payslip.

Next steps We hope you’ve found this e-book useful

If you’d like to find out more about integrated HR and Payroll technology then why not:

• Visit our website

• Request an information pack

• Join a webinar

• Book a demonstration

• Or call us for a chat on 01908 787700