All UK employers, even those who just employ one member of staff, such as a nanny or carer have legal duties as a result of the auto enrolment legislation.
If you are providing somebody with a regular income, then you may be classified as an employer and auto enrolment duties will apply to you.
In order to comply with your auto enrolment duties, it is important that you understand what you need to do and by when,
If you employed your member of staff prior to 1 October 2017, then you should have a staging date. If you don’t know when your staging date is, you can find out here.
If you employed your first member of staff on or after 1 October 2017 then you will not have a staging date and instead your duties will apply immediately. This is known as your duties start date and means you will need to comply with auto enrolment duties as soon as you employ your first member of staff.
Assessing your workforce
Next, you’ll need to work out if your employee is eligible for auto enrolment based on age and earnings. You can do this by assessing your workforce. This will allow you to work out whether you will be paying regular employer contributions and prepare to start deducting employee contributions from their pay packet.
If you assess the job holder is eligible then they must be auto enrolled into your workplace pension. Non-eligible jobholders do not have to be enrolled, but must be able to opt in to your workplace pension voluntarily, the same goes for entitled workers but there are differences in the levels of contributions.
If non-eligible job holders wish to opt in to your workplace pension, then you will both be required to pay at least the minimum contribution in. If they are entitled workers and wish to join, you will need to deduct contributions on their behalf and pay these into the scheme, but you do not need to pay the employer contribution, unless you choose to do so.
It’s important to note that assessing your workforce doesn’t stop at the outset, and instead should be undertaken on an ongoing basis to ensure that all eligible employees are correctly enrolled into your workplace pension scheme.
Communicating to your employee
You are legally obliged to send out statutory written communication to your employee to keep them informed about auto enrolment. NOW: Pensions sends out all statutory communications including postponement and all pension communications once someone has become a member on the employer’s behalf. But, it’s worth sitting down with your employee to explain the benefits of the scheme and the implications to them. They will appreciate your time and the opportunity to ask you questions that may concern them.
Declaration of compliance
Once you have completed your legal duties you will need to notify The Pensions Regulator to let them that you have complied. The declaration of compliance form can be found here and can also act as your duties checklist.
If you are late complying with your auto enrolment duties, or you don’t comply at all, then there may be enforcement action taken by The Pensions Regulator. This could include a penalty notice and potential fines.
Ongoing duties and re-enrolment
After completing your assessment and successfully enrolling your eligible employees into your workplace pension scheme, you will still have ongoing duties. You must keep up to date staff records such as age, address, earnings and requests to join or leave your scheme. If your employee is not eligible but becomes so later, then you must be ready to offer to enroll them. Furthermore if your employee decides to opt in, you will need to offer them the choice of joining your workplace pension.
Every three years you will need to complete an assessment of your workforce known as re-enrolment and you will need to complete a re-declaration of compliance to notify The Pensions Regulator you have met your duties. This must be completed within 5 months of the third anniversary of your staging date.