What is automatic enrolment?
If you are already an employer then it’s likely that you will be well accustomed to auto enrolment and your legal duties. But what about new businesses or those deciding to employ staff for the first time?
Under the Pensions Act 2008, every employer in the UK must put certain staff into a workplace pension and contribute towards it. This is called ‘automatic enrolment’.
Whether you’re a hairdresser, an architect, or employ a personal care assistant, once you employ at least one person you are an employer and you’ll have certain legal duties. If you decide to do this before 30 September 2017 then you will be issued with a staging date just like everybody else thus far. This is likely to be sometime before March 2018 and will give you some time to come to terms with your legal duties. But from 1st October 2017 it changes.
If you are employing staff for the first time after 1 October 2017, your legal duties for automatic enrolment begin on the same day your first member of staff starts work. You should start preparing early for this to work out what you’ll need to do.
How will I know what I’ll need to do?
On the date your duties start you must assess your staff to see if they meet the age and earnings criteria to be put into a pension scheme for automatic enrolment. Any staff who are…
- aged between 22 up to State Pension Age
- and earn over £10,000 per year, or £833 per month or, £192 per week
…must be put into a pension scheme and you must both pay into it. What you need to do will depend on whether you have anyone who needs to be put into a pension scheme or not.
It is compulsory for an employer to automatically enrol their eligible jobholders into an automatic enrolment scheme. However, ongoing membership of the scheme is not compulsory for the jobholder, they have the right to ‘opt-out’.
Spot checks and penalties for non-compliance
You, the employer, are responsible for meeting your legal duties for automatic enrolment. If you don’t comply, you may face enforcement action including compliance notices, and penalty notices (fines).
The Pensions Regulator has also announced that their inspection teams will be visiting hundreds of businesses across the country over the coming months to check that staff are being given the workplace pensions they’re entitled to, so make sure you are meeting your legal duties.
If you have any questions or need an further guidence then please contact the office and visit the website below