The Workplace Pension: 4 Important Things You Don’t Get Told
Have you seen the workplace pension advert on TV? The one with the big fluffy purple monster talking about how employers have to follow new pension regulations and the new workplace pension scheme? Well, there are still some employers who don’t even know that they employ employees. I know that sounds strange but let me explain.
Many Employers Don’t Understand They Need To Take Action
Most of the PR surrounding workplace pensions has been aimed at employers, but unless you realise you are an employer, you won’t take notice. “How on earth could someone not realise they employ people?” I hear you cry simultaneously. Well, even if a person only employs a nanny, they may be considered to be an employer and must follow the guidelines on workplace pensions.
The Pensions Regulator has been great at providing guides on what do to if you are an employer. The struggle has been getting these guides in front of the right people.
You may be thinking “It’s okay; I only have sub-contractors working for me – they don’t count.” While you are right you are not obliged to provide subcontractors with a pension, can you prove they are not an employee?
It might be worth applying the Contract of Employment test. Please refer to this blog to make sure.
Communicating The Workplace Pension To Staff
The Pensions Regulator’s guidelines state there are statutory communications that need to go out to all staff. This means all staff and not just the ones that you think will be eligible for a workplace pension.
Depending on which pension provider you choose, some companies will send out these communications for you. Make sure you ask about this when selecting your supplier because you already you have enough to think about.
Are You Compliant With The Employment Rights Act 1996?
This act requires you to issue a contract of employment to every employee. The act also contains a section on pensions. Does your contract follow the new Pensions Act 2008?
Employers who offered pensions did so after a qualification period for which was usually in line with a probationary period. A probationary period is generally between three and six months. A workplace pension allows an employer to defer enrollment of an employee into the scheme for a maximum of three months, but an employee can overrule this decision, so the scheme needs to be set up.
You do not have to issue a new contract if yours has been reviewed recently; an amendment to contract will suffice. Yet you need to ensure you have done one or the other. If you haven’t had had your contract reviewed recently, it might be time to review and update.
If you have an outdated contract, an employee could bring a claim for breach of contract.
Your policies and staff handbook usually work in line with your contract of employment, so you need to find out if these are also out of date?
Are You Covered By The Data Protection Act?
The Workplace Pension generally requires your employee’s personal data to be passed to an external provider. Do you have a clause in your contract of employment or policy to confirm how you will protect this data as a business?
Your employees trust you with confidential information. It is your duty as an employer to ensure that you protect it.
Here is a super handy quick checklist of what you need to do:
- If you employ people, check your staging date – you need at least six months prep time.
- Check your contract, policies and handbook and get them updated, or create them!
- If you use sub-contractors, make sure you have a contract with them and make sure you have applied the test. This will protect you with HRMC as well
The Pensions Regulator has already started to issue fines to companies that do not comply; even if a simple tick-box has not been ticked. You don’t want to get caught out after working so hard to get your business to where it is.
Make sure you protect your business. Employment Laws change all the time and protecting yourself and your employee is only part of your job. If you are not sure if you are up to date, or need any help with workplace pensions, please contact me for a free, no-obligation HR Health Check.
Don’t keep it a secret
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