Initial checks It is important that business advisers do not make assumptions about their clients’ workforce for purposes of auto enrolment. Assessing staff can take some time depending on the size of the business and complexity of the workforce. One of the first tasks, once the staging date is established (preferably using The Pension Regulator’s staging date tool on the website) is to do a ‘quick check’ to ascertain how long a full assessment is likely to take and ensure all the information held about staff is accurate. The Pensions Regulator recommends starting to assess workers several months before the staging date to avoid the risk of non compliance. Staging date tool: www.tpr.gov.uk/staging-date Who is a worker ? What business advisers will need to do for automatic enrolment will depend on whether the employee is someone the legislation classifies as a ‘worker’. At first glance, business advisers may assume that only employees who are paid through the PAYE system are considered workers. However, the definition of worker under the legislation is widely drawn and it’s important not to accidentally exclude workers from the auto enrolment process as this contravenes automatic enrolment duties. When determining who is a worker, employers and business advisers should be aware that: A contractual employment relationship does not have to be in writing. To fall within the scope of ‘worker’ the contract can be verbal and the terms implied rather than explicitly stated. Temporary and part time staff will fall into the category of a worker. In addition, depending on the contractual terms, workers may be those on zero hour’s contracts and secondees. Another category of worker is a ‘personal services worker’. Typically, these may appear to be self employed however in certain circumstances they are actually classified as a worker. If an employer expects that person specifically to perform the work, if they cannot sub contract or send a substitute (unless it’s due to sickness) or if they are not undertaking the work as part of their own business then the employer may need to classify them as worker . In making the judgement as to whether an individual is undertaking the work as part of their own business, the employer should consider factors including whether the employer controls the hours worked, whether tools or facilities are provided, whether employee benefits are provided and whether the employer is financially responsible for faulty work. Who is a worker – detailed guidance: www.tpr.gov.uk/docs/detailed-guidance-1.pdf Show your working When carrying out the assessment, business advisers and their employer clients should exercise ‘reasonable judgment’ in defining workers. The rationale for the decision should be documented demonstrating the underlying reasons for inclusion or exclusion from the worker category. Should there be reason to suspect non compliance through failing to classify staff correctly, written evidence of how these decisions were reached may be required by the regulator. Types of worker The types of worker for which the employer will have automatic enrolment duties are: Eligible jobholders: These are workers who are eligible for automatic enrolment and they are over 22, who ordinarily work in the UK and who earn above the earnings threshold currently set by the Department for Work and Pensions at £10,000 per annum. Non eligible jobholders: These are workers who are not eligible for automatic enrolment but who can choose to opt in. They are aged between 16 and 21, or between state pension age and 74, are ordinarily working in the UK and who earn above the earnings threshold of £5,772 per annum. Essentially they are workers who
CIPP Policy News Journal
08/04/2015, Page 345 of 521
Made with FlippingBook - Online magazine maker