Did you know that even if you only have one employee you’re legally bound as an employer, and thus have certain duties you must fulfil? Under the Pensions Act 2008, every employer in the UK has a responsibility to put certain staff into a workplace pension scheme and contribute towards it. This is known as ‘automatic enrolment’.
What you need to do to comply with the regulations depends on whether you have staff that need to be put into a pension scheme or not. All employers have duties. This includes completing an online declaration of compliance, which will tell The Pensions Regulator what you’ve done for automatic enrolment.
Every time you pay your staff (including new employees), it is a requirement to monitor their age and earnings to see if they need to be put into a scheme and how much you are required to pay in. The Pensions Regulator provide guidance and tools to help you meet your duties, and they will also contact you to remind you of your legal duties.
If you don’t comply with the duties outlined in the Pensions Act 2008 at the right time, you will be liable for compliance notices and/or penalties (fines). If you comply late, you could still face notices or fines depending on how long you’ve taken to fulfil your duties.
The Pensions Regulator use data to detect when employers are not maintaining their contributions. Even if you’re employing seasonal workers, you’re still legally required to fulfil your automatic enrolment responsibilities.
There are consequences in place and regulations surrounding if you’re late meeting your duties and significant penalties in place to enforce the regulations. Fixed penalty notices are £400, escalating penalty notices can range from a daily rate of £50 to £10,000, and prohibited recruitment conduct penalties have a prescribed rate of £1,000 to £5,000, which depends on the number of employees you have.
To find out more about what you need to do for automatic enrolment and your responsibilities as an employer, The Pensions Regulator have set up an online tool. For more information about Automatic Enrolment, click here.
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