New employers must act fast.
Are you a new employer? Are you taking on employees for the first time? In which case, you need to tread carefully. Mistakes could be costly.
The pensions regulator (TPR) is responsible for the workplace pension scheme. Although, its introduction was initially gradual, since October 2017, all first-time employers have been obliged to implement the scheme immediately. Failure to comply from day one could result in fines of up to £10,000 per day. Don’t just assume you have everything in place. Ask an expert to double-check on your behalf that you’re completely compliant. Don’t make these checks just as a one-off. Review your compliance regularly.
Suppose my employees aren’t interested in taking part in auto-enrolment?
This can often be the case. But be careful. Make sure every employee is enrolled in the scheme, before they request to opt out. There are specific procedures to follow for this, including standard letters to be sent out to each employee. Employers must take these steps within six months each employee starting work.
A trap to avoid – even when an employee opts out of the scheme, the employer must repeat the enrolment process every three years, giving the employee to opt out on each occasion.
What if my company only employs directors?
In these cases, the auto-enrolment rules don’t apply. Although the TPR might still notify you about your company’s auto-enrolment duties, you just have to reply, informing them that you have no qualifying employees.
... and if I employ seasonal staff?
Even when you take on staff for a short period, such as Christmas and New Year, auto-enrolment still applies. However, for those working for fewer than three months, you have the option of using ‘postponement’. We’d be delighted to help you with the process of postponement. But remember – even if you opt for this route, you must still write to explain to the employees concerned, within six weeks from the date the postponement starts.
This legal information is not the same as legal advice and you may not rely on our post as a recommendation of any particular legal understanding. Please, consult an attorney if you’d like to get advice on your interpretation of this article.