UK Pension auto enrolment for Temporary Staff? What Employers need to know

With the summer holiday period upon us, many employers will take on extra staff to manage increased demand. This surge in hiring often includes a mix of seasonal workers, temporary employees, and staff with irregular hours and pay. While these additional team members can provide much-needed support during busy times, employers must also be mindful of their legal obligations regarding workplace pension enrolment.

Understanding the nuances of automatic enrolment is crucial for employers to ensure compliance and avoid potential penalties. This involves regularly assessing each employee’s eligibility based on specific criteria and contributing to their pension schemes accordingly. In this article, we will outline the key responsibilities employers in the U.K. may have concerning the automatic enrolment of temporary staff.

By adhering to these guidelines, employers can maintain a smooth operation during peak periods while fulfilling their pension duties and supporting their workforce’s future financial security.

Key Criteria for Automatic Enrolment

As an employer, it is your duty to ensure that all staff, including seasonal and temporary workers, are assessed for automatic enrolment into a workplace pension scheme. This assessment must be carried out every time an employee is paid, regardless of whether they work regular hours or have variable pay. The key criteria for automatic enrolment include:

Age Requirement

Employees must be between 22 years old and the state pension age. This age range ensures that younger employees and those nearing retirement are not automatically enrolled, focusing on those in the core working age group.

Earnings Threshold

Employees must earn over £192 per week or £833 per month. This threshold helps to determine the eligibility of employees based on their income levels, ensuring that those who earn below this amount are not automatically enrolled.

Regular Assessment of Staff

Even if you hire short-term, seasonal, or temporary staff with irregular hours or incomes, you must assess them individually each pay period. This ensures that anyone meeting the criteria is enrolled in a workplace pension scheme.

Employer Pension Contributions

Once staff are enrolled, employers must make regular contributions to their pension scheme. If an employee’s earnings fall below £120 per week or £520 per month, employers may cease contributions unless the pension scheme rules stipulate otherwise. It’s important to check with the pension scheme to understand their specific requirements.

Tax Relief on Pension Contributions

Employees receive tax relief on their pension contributions, which effectively reduces the net cost of contributing to the pension. Employers must:

1. Apply for Tax Relief: Ensure that the pension scheme is registered with HMRC to provide tax relief on employee contributions.

2. Inform Employees: Make sure employees understand how tax relief works and how it benefits them.

Non-Compliance and Penalties

Employers who fail to comply with their workplace pension duties, including making regular contributions, may face significant penalties:

Warning Notices

The Pensions Regulator may issue a warning notice outlining the required actions and a deadline for compliance.

Fines

Continued non-compliance can lead to fines, which can be substantial depending on the severity and duration of the breach.

Using Postponement for Short-Term Staff

If you have staff members who will work for less than three months, you can use postponement to delay assessing these employees. This pauses your duty to assess them until the end of the three-month postponement period.

By following these guidelines, employers can ensure they are compliant with workplace pension regulations and avoid potential penalties.