Auto Enrolment Payroll Legislation

The law in the UK has changed. Now it is your job, as an employer, to enrol all employees who meet specific criteria onto a workplace pension scheme and contribute towards it. While this might be an easy step for larger businesses that are well versed in workplace schemes, as a smaller employer (with up to 50 staff), the burden of the administration and expense of auto enrolment is much greater.

What is auto enrolment?

Auto enrolment is all about identifying eligible employees and enrolling them automatically at the right time onto a qualified workplace pension scheme. It is also your responsibility, as an employer, to inform them of their rights and entitlements. Those employees who don’t qualify for auto enrolment will also need to be sent an appropriate letter informing them of their rights. You will also have to process opt-in and opt-out notices from your qualified and unqualified employees, and reassess your workforce at least once every pay period.

When are the auto enrolment staging dates?

The auto enrolment process for smaller businesses (less than 50 employees) began in 2015, with the pension staging dates staggered over the next three years. Your staging date is determined by the business’ size, sector and tax status. You can find your pension staging date here.

What must you do to comply?

  • Find out your company’s pension staging date (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, and inform them of their right to opt out if they wish to do so
  • Offer alternative pension schemes to ineligible employees and entitled workers
  • Register with The Pensions Regulator and provide details of your qualifying pension scheme and the number of employees you have automatically enrolled

For more information, please refer to this guidance from The Pensions Regulator.

What happens if you 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 Payroll do the legwork

Primo Payroll takes care of the auto enrolment process every step of the way, from signing up to a company pension with direct links to a pension provider, all the way through to the administration tasks associated with auto enrolment. The result is the removal of the compliance risks and more time to focus on growing your business.

Primo Payroll 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 to discover the many ways Primo Payroll can help you.