Are you ready for automatic enrolment? As the 1.8 million small businesses who have fewer than 30 employees start to introduce workplace pensions, we look at how they are coping and how you can ensure your business is prepared.
In the news, there’s important information about a possible issue with annual leave due to the dates of Easter this year. Do make sure you’re complying with the law.
Top news stories
Employers risk breach of holiday rights with annual leave contract wording
The wording in some employees’ contracts may result in an unanticipated shortfall in their holiday entitlement, for which their employer will be liable. The issue affects employers whose annual leave year runs from 1 April to 31 March, and whose contracts use wording such as “20 days’ holiday plus bank holidays”.
Small business owners don’t have enough information ahead of EU referendum
More than half of small business owners feel they have not been given enough guidance about the implications of leaving or staying in the EU, according to a survey of 4,000 company directors. The referendum is set for 23 June.
Six-figure fine for missing a VAT payment by one day was ‘proportionate’
Businesses are being urged to pay on time to avoid hefty penalties.
20% of businesses will maintain pay differentials impacted by national living wage
A fifth of respondents said they would maintain pay differentials between employees affected by the national living wage and their managers, according to new research.
Ofcom tells BT to open up infrastructure to rivals
BT will keep control of Openreach but it must help rivals use its infrastructure to lay fibre cables.
Key dates for your diary
7 March: Changes for regulatory references for the finance sector
From this date, banks and insurers will need to follow new rules for employment references for certain senior posts. More details can be found on the FCA website.
8 March: International Women’s Day
Automatic enrolment - where are we now?
Small businesses who have fewer than 30 employees are now facing the reality of automatic enrolment. Between November 2015 and April 2017, these businesses will need to introduce new workplace pension schemes or face penalties.
We look at what is happening with automatic enrolment and how other businesses are rising to the challenge.
What’s the timetable?
The actual staging date depends on the number of employees and, for smaller employers, your PAYE reference number. You can see a full list of dates on the NOW:Pensions website.
How are companies coping with automatic enrolment?
Getting definitive statistics about the impact of automatic enrolment on smaller businesses is problematic. In the last few weeks, there have been contradictory news stories. Figures from NEST showed that small businesses are meeting their duties without needing to call their pension scheme or use their waiting period as much as larger employers. But the week before other figures showed that the number of businesses being fined for failing to meet their obligations had jumped 14-fold in just three months.
Whichever way things are going, it’s clear businesses are worried about the impact. Recent research showed that automatic enrolment was the top concern for small businesses this year.
One of the challenges that employers have highlighted is how to walk the line between providing the right information and offering financial advice to employees. There are certainly expectations that businesses manage this well - research shows that 60% of employees think it’s their employer’s responsibility to ensure employees understand workplace pensions.
Another concern is the cost of automatic enrolment. 70% of employers who are already running a workplace pension scheme have seen a financial impact on their company. A survey by the Chartered Institute of Personnel and Development (CIPD) found that 17% of employers said automatic enrolment was the reason they were unable to raise basic pay by 2% or more in 2015.
In response to these concerns, the government launched a consultation to look for ways to simplify the process and make it easier to manage. This is now closed and the government is reviewing feedback.
Further reviews of the impact are planned for end of 2017, although small business leaders have called for this to be delayed to fully gauge the impact of mandatory increases in employer contributions.
Making sure you’re ready
Whatever the outcome of the consultation, you need to start preparing for automatic enrolment now. If your staging date is approaching and you need more information, we can help: