So you have seen the advert on TV with the big fluffy purple monster? Talking about how employers have to follow new pension regulations and the new workplace pension scheme? If you have that is great but yet there are some employers who don’t know that they have employees. I know that sounds strange but I will explain.
Many Employers don’t know they need to do anything
If you employ a nanny, for example, you may be considered to be an employer and must follow the guidelines on workplace pensions. As most of the PR has been aimed at employers unless you realise you are an employer you won’t take notice.
The Pensions Regulator has been great at providing guides on what do to if you are an employer. The only issue is getting these guides in front of the right people, which is proving to be a struggle.
You may think it is okay I have sub-contractors working for me – they don’t count. No, you are right you are not obliged under the law to provide a pension but can you prove they are not an employee?
It might be worth applying the test to make sure – See my blog – Do I need to issue contract of employment
Communications to staff
Within the guidelines that the pensions regular have set out that are statutory communications that need to go out to all staff. This does mean all staff and not just the ones that you think will be eligible for a workplace pension.
Depending on which pension provider you choose there are some that send out these communications for you. Make sure you ask about this when choosing your supplier, you have enough to do make life easy for yourself.
Are you compliant with the Employment Rights Act 1996?
This act requires you to issue a contract of employment to every employee and has 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 usually between 3 and 6 months. A workplace pension allows an employer to defer enrollment of an employee into the scheme for a maximum of 3 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 is suffice. You need to ensure you have done one of the other. If you haven’t had had your contract reviewed recently it might be the time 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If you have an outdated contract an employee could bring a claim for breach of contract.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 are these now 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.
So quick checklist of what you need to do
- if you employ people check your staging date – you need at least 6 months prep time
- check your contract, policies and handbook and get them updated, or get some!
- if you have 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 box has not been ticked. You don’t want to get caught out you have worked hard to get your business to where it is.
Make sure you protect your business laws change all the time and protecting you and your employee is only part of your job. If you are not sure if you are up to date contact me for a free no obligation HR health check.
Don’t keep it a secret
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