Auto Enrolment Payroll Legislation
Payroll legislation in the UK has changed and employers now have to enrol all employees who meet specific criteria onto a workplace pension scheme, and contribute towards the scheme. Larger businesses with dedicated payroll staff have taken this in their stride, whereas many employers with up to 50 staff have found the administration and expense of auto enrolment is yet another burden on running their business.
What is auto enrolment?
Auto enrolment includes various key elements:
- An employer has to identify eligible employees and enroll them automatically onto a qualified workplace pension scheme.
- The employer has to inform eligible employees of their rights and entitlements.
- The employer has to send an appropriate letter to any employees who don’t qualify for auto enrolment informing them of their rights.
- Employers have to process opt-in and opt-out notices from both qualified and unqualified employees.
- Employers have to reassess their workforce at least once every pay period.
When are the auto enrolment staging dates?
The auto enrolment process for smaller businesses of less than 50 employees began in 2015, with the pension staging dates staggered until 2018. Your staging date is determined by the size of your business, its sector and tax status. You can find your pension staging date here.
What must every business do to comply?
- Find out your company’s pension staging date which is the date by which you must comply with the auto enrolment payroll legislation
- Identify and provide a qualifying pension scheme for all eligible employees and automatically enrol them on the scheme
- Pay employer contributions for all eligible employees
- Tell all eligible employees that they have been enrolled onto the workplace pension scheme.
- Inform all eligible employees of their right to opt out if they wish to do so
- Offer alternative pension schemes to ineligible employees and entitled workers
- Provide details of your qualifying pension scheme to the Pensions Regulator with the number of employees you have automatically enrolled
For further information, please refer to this guidance from The Pensions Regulator.
Penalties for companies which don’t comply?
The regulators have a number of interventions available to them to ensure all employers meet their statutory objectives. These are listed below and you can read more about it by visiting The Pensions Regulator.
- A Fixed Penalty Notice (FPN) requiring payment of a fixed fine of £400
- An Escalating Penalty Notice (RPN) imposing a penalty of £50 to £10,000 per day if you are non-compliant
- A Prohibited Recruitment Conduct Penalty Notice (PRCPN) at a maximum of £5,000
- A Civil Penalty Notice (where contributions have not been paid). The relevant fine is £0 – £5,000 per individual and £0 – £50,000 per organisation
Let Primo Umbrella take care of your auto-enrolment obligations
Primo Umbrella takes care of the auto enrolment process making sure that you won’t receive penalty notices and can focus on other aspects of your business. Primo Umbrella does it all for you, from signing up to a company pension with direct links to a pension provider, through to sorting out all the admin that comes with auto enrolment. Primo Umbrella fully automates the following:
- Pension setup
- Workforce assessment
- Enrolment of eligible employees
- Creation and sending of email letters to employees
- Processing of opt-in and opt-out notices
- Calculating pension deductions and refunds
- Record keeping and activity tracking
- Data export to pension providers
Get in touch with our support team today for further information about how Primo Umbrella can help your company.