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Pay or salary payment arrangements policy

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This model policy template provides information regarding pay or salary payment arrangements. It includes the following sections:

  1. Payment arrangements
  2. Deductions
  3. Benchmarking
  4. Pay reviews
  5. Queries
Reading time
How long to understand and implement this policy?
10 mins
Word count
How many words in this policy?
425
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What is a Pay or salary payment arrangements policy?

The purpose of this Pay or salary payment arrangements policy is to provide you with a flexible and customisable document to serve as a robust and effective starting point for you.

By using our Pay or salary payment arrangements policy, you can streamline your process, maintain consistency and accuracy, and save time, and it can be easily adapted to fit your specific scenario.

Best practice timescale for this to be issued
When should this policy be issued?
During onboarding / after changes / planned refresher
Issued by who, to whom
Who should issue this policy, and to whom?
Internally issued to appropriate recipients in your Company
Applicable legal jurisdictions
In which jurisdictions can this policy be used?
Great Britain & NI (United Kingdom), Worldwide

What legislation and best practice guidelines have been taken into account in the development of this template?

United Kingdom

  1. Equality Act 2010: This Act ensures that employees are not discriminated against in their pay arrangements based on protected characteristics, such as gender, age, race, religion, disability, or sexual orientation.

  2. National Minimum Wage Act 1998 (NMWA): This legislation sets the minimum wage rates that employers must pay to workers, depending on their age and employment status. The pay arrangements policy should outline how the organization complies with the NMWA and ensures that all employees receive at least the minimum wage.

  3. Employment Rights Act 1996: This Act includes provisions for employee contracts and specifies that employees have the right to receive a written statement of their pay arrangements, including details of their salary, payment frequency, and any deductions.

  4. Working Time Regulations 1998: These regulations set limits on working hours, including overtime arrangements, to ensure that employees are fairly compensated for any additional time worked.

  5. Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000: These regulations protect part-time workers from being treated less favorably in their pay arrangements compared to full-time workers doing similar work.

  6. Agency Workers Regulations 2010: These regulations ensure that agency workers receive equal treatment in pay arrangements compared to direct employees after a qualifying period of employment.

  7. Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018: These regulations require employers to provide more detailed information about pay arrangements and benefits in the written statement of employment particulars.

  8. Trade Union and Labour Relations (Consolidation) Act 1992: This Act addresses issues related to collective bargaining and employee representation, including pay negotiations and pay-related disputes.

  9. Data Protection Act 2018 (DPA): The DPA governs the processing and handling of personal data, including pay-related information. The pay arrangements policy should ensure compliance with data protection principles in managing and protecting employee pay data.


Other territories

Consult your jurisdiction's employment legislation or labor laws to ensure compliance with the template. Review the language for local precision.

Pay or salary payment arrangements Policy

Overview

The purpose of this policy is to provide information and procedures regarding salary payment arrangements.

Scope

This policy is applicable to all employees of [company name].

General principles

Payment arrangements

Salaries for permanent and temporary members of staff (excluding agency workers) are paid monthly by transfer directly into each individual's bank or building society account.

Payments to employees are made on the [date] day of each month. [Payments to casual workers, freelancers and contractors are made on the [date] day of each month.] However, if this day falls on a weekend or bank holiday, salaries will go into individuals' accounts on the [previous/following] working day.

Employees will receive an itemised pay statement of their earnings and deductions on the date on which they are paid.

It is the responsibility of each employee to ensure that [Company]:

  • Has details of his/her bank or building society account number and sort code.
  • Is advised of any changes to his/her bank or building society account.
  • Is told about any payment anomalies that the employee discovers (e.g. overpayment of wages).

Deductions

Appropriate deductions will be made from pay including income tax and National Insurance contributions (NICs), which are subject to each employees earning level, family status and the number of hours worked.

Benchmarking

[Company] is committed to ensuring that:

  • Its salaries remain competitive in the labour market, through conducting an [annual] pay review, paying individuals in line with normal industry practice and standards, and benchmarking salaries against other employers.
  • It recognises individual performance and rewards employees financially for this through [merit pay/bonuses].
  • It regularly consults staff and employee representatives on pay levels and during the [annual] pay review.
  • Individuals are not discriminated against because of gender, marital or civil partnership status, race, religion or belief, sexual orientation, age, disability, gender reassignment, pregnancy and maternity, or because they work part time or on a fixed-term contract.
  • Workers are paid at the level of at least the national minimum wage or national living wage whichever is applicable.

Pay reviews

Employees' basic rates of pay will normally be reviewed annually in [April], although any increases will be at the absolute discretion of [Company]. Reviews may take place at other times of the year to reflect a change in circumstances. Any resulting changes to pay will be notified to employees in writing.

Queries

Employees who have any queries or problems concerning payment of their salary should contact [name of manager].

Unless agreed otherwise, any pay errors, whether of over or underpayment, will be rectified in the next salary payment.

This policy [does not] form[s] part of your terms and conditions of employment.

Version: [1.0]

Issue date: [date]

Author: [name, job title]

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pay or salary payment arrangements policy