Get pay, benefits and financial entitlements right to support staff wellbeing and minimise legal risk
Discussions about workforce wellbeing often prioritise mental health, flexible working, and managing workplace pressures. Yet an equally important, and sometimes overlooked, factor for practice owners is financial wellbeing, ensuring pay, benefits and sick pay are accurate, timely and clearly communicated.
From our experience advising GP partners and practice owners, many workplace disputes and formal claims arise not from misconduct, but from uncertainty, inconsistency, or errors in the administration of pay and financial entitlements. If left unaddressed, these issues can undermine staff morale and negatively affect retention. This article outlines the key considerations GP employers should prioritise to get these fundamentals right, support workforce wellbeing, and reduce the risk of employment tribunal claims.
Payslips and pay accuracy: the foundation of financial wellbeing
Under section 8 of the Employment Rights Act 1996, employees have the statutory right to receive an itemised payslip on or before payday. Payslips must clearly set out gross pay, all deductions (including tax and National Insurance), and net pay.
We recently handled a case where a GP practice employed a practice nurse who worked variable hours alongside some overtime. Due to a payroll input error, her payslip showed incorrect gross pay, underpaying her for several overtime shifts. Although the error was relatively modest, it meant her net pay was lower than expected, causing financial stress.
The nurse raised the issue with the practice manager. However, because the practice did not routinely audit payroll and the error was not immediately identified, the problem continued for a second month. The lack of clarity on the payslip made it difficult for her to see exactly where the error sat, undermining trust in the practice’s pay processes.
Frustrated by the delay and worried about ongoing underpayment, the nurse submitted a formal grievance. If the issue had remained unresolved, this could have escalated into a claim for unlawful deduction from wages under section 13 of the Employment Rights Act 1996, exposing the practice to legal costs, management time, and reputational damage.
Ensuring payslips are accurate and delivered promptly is critical. Even small errors or delays can cause significant financial anxiety for employees who rely on predictable income to manage household budgets and commitments.
Accurate payslips also reduce the risk of disputes escalating into formal grievances or employment tribunal claims. Regular audits and effective payroll systems can help employers ensure compliance with legal requirements and demonstrate a commitment to transparency.
Sick pay: clear rules and consistent application
Statutory Sick Pay (SSP) is governed by the Social Security Contributions and Benefits Act 1992 and sets the legal minimum entitlement for employees during periods of illness. While many employers offer enhanced contractual sick pay schemes, it is essential that these are applied fairly, consistently, and in line with the agreed terms.
Inconsistent application of sick pay policies can give rise to disputes and, in some cases, may overlap with claims under the Equality Act 2010 where disability is a factor. Effective management of sick pay entitlements therefore plays an important role in supporting both legal compliance and employee wellbeing.
Notice in lieu and pay on termination: getting it right
Pay in lieu of notice (PILON) and notice periods are often overlooked, yet they are critical areas for employers to manage carefully. The Employment Rights Act 1996 (sections 86 and 87) sets out statutory minimum notice periods, which can be superseded by contractual terms.
Whether an employee works their notice or is paid in lieu, it is essential that pay is calculated accurately, including any outstanding benefits or bonuses. Errors at this stage can give rise to claims for unlawful deduction of wages or breach of contract.
Practice owners should therefore have clear, well-understood policies on notice periods and PILON arrangements, ensuring both they and the practice manager understand the requirements and communicate clearly with departing employees. This clarity helps manage expectations and reduces the risk of disputes at what is often a sensitive point in the employment relationship.
Deductions from wages: avoiding unauthorised deductions
Section 13 of the Employment Rights Act 1996 protects employees from unlawful deductions from wages. Any deduction must be authorised by statute (such as tax or National Insurance), contractually permitted, or made with the employee’s prior written consent.
Common issues arise in relation to deductions for overpayments, training costs, or adjustments to pay on termination. While practice owners may, in some circumstances, be entitled to recover certain sums, failing to follow the correct process or communicate clearly can expose the practice to formal complaints or claims.
To minimise risk, practice owners should ensure that policies on wage deductions are transparent, accessible, and applied consistently. Clear communication between partners, the practice manager and staff about when and why deductions are made can help maintain trust and support positive working relationships.
In one recent matter we advised on, a GP practice employed a locum GP who left part‑way through the year. On termination, the practice deducted the cost of training from her final payslip, believing the clawback was permitted under her contract. However, the deduction was not clearly itemised on the payslip, nor was the basis for it adequately explained.
The GP was surprised by the reduced final payment and contacted the practice to query the shortfall. A subsequent review of the contract revealed that, while repayment of training costs was conditional, the contractual conditions for making the deduction had not been met and the GP had not provided written consent.
As the deduction had already been processed through payroll, the practice faced a complaint that wages had been unlawfully deducted. The GP raised a formal grievance, requiring the practice to spend management time investigating the issue, reversing the deduction, and explaining the error.
The link between pay and wellbeing
Financial security is a fundamental component of employee wellbeing. For practice staff, who often operate under significant pressure and in demanding conditions, the certainty of receiving full and timely pay and benefits contributes significantly to their ability to manage work related stress.
When employees have confidence that their financial entitlements are handled accurately and transparently, it reduces anxiety and helps them focus on their roles. By contrast, uncertainty around pay can heighten stress and negatively affect morale.
Employers who prioritise accuracy and clarity in payroll and benefits administration send a clear message that they value and respect their staff, helping to foster trust and support a positive working environment.
Practical steps for practice owners
To support workforce wellbeing and ensure legal compliance, practice owners should consider the following practical measures:
- Ensure the practice manager regularly reviews payroll processes and systems to maintain payslip accuracy and timely delivery.
- Provide training for practice managers on sick pay entitlements and the importance of applying policies consistently.
- Develop clear policies on notice periods and pay in lieu, ensuring these are understood and applied consistently by practice managers.
- Establish transparent policies on wage deductions, ensuring employees are informed and consulted where appropriate.
- Encourage open dialogue between practice managers and staff around pay and benefits to address any concerns or misunderstandings promptly.
Conclusion
At Hempsons, we advise practice owners to take a holistic approach, integrating precise payroll management, transparent communication, and consistent policies with broader health and wellbeing initiatives.
Complying with statutory obligations is fundamental. Beyond legal compliance, getting pay, benefits, and financial entitlements right strengthens workforce stability and supports staff wellbeing.
First published in AISMA’s Spring 2026 edition.