As you may be aware, as part of the Pensions Act 2008, all eligible employees must be automatically enrolled into a company pension. Both workers and employers are required to make contributions. As a business we operate a three month waiting period, after which all eligible workers will be automatically enrolled onto the company pension scheme.
Who is covered by the law?
If a worker is temporary, they still have every right to be automatically enrolled and receive employer contributions as long as they meet the eligibility criteria outlined in the regulations.
Temporary workers will be automatically enrolled into a workplace pension scheme if they:
- are aged 22 or over and are under State Pension age
- work on a PAYE basis
- earn in excess of the earnings trigger (£192 per week)
- work, or usually work, in the UK.
In addition to eligible jobholders, there are two other relevant categories to consider. These are:
- Aged between 16 and 74
- Working, or ordinarily working, in the UK
- Earning between £6240 and £10,000 per annum
If the temporary worker is classified as a non-eligible jobholder, they may still request to opt into the workplace pension scheme.
- Aged between 16 and 74
- Earning less than £6240 per annum
Entitled workers have the right to access the workplace pension scheme and make contributions but have no right to the employers’ contribution.
How Allen Associates manage this
We engage NOW: Pensions for the provision of our scheme, and Critchleys Accountants support our weekly payroll. NOW: Pensions come highly recommended by our trade body, the REC (www.rec.com) and provide the majority of communications with temporary staff in matters pertaining to the management of their pension.
Allen Associates is committed to continually monitoring the status of non-eligible jobholders and entitled workers to ensure that if they ever satisfy the auto enrolment criteria, they are enrolled punctually. If their pay reaches the trigger, we will endeavour to enrol them within one month of them becoming eligible.
We will liaise with temporary staff, NOW: Pensions and our payroll provider to procure the necessary information and data, in order to make the assessment an efficient and accurate process.
What this means for you as a client
Both temporary staff and employers are obliged to contribute to the pension scheme. Therefore, following the completion of the three-month waiting period, all invoices for eligible workers will detail a separate cost for pension contributions, itemised and shown in addition to the balance of your weekly charges.
Allen Associates apply pension charges at cost. This means we do not profit from pension charges. Additionally, we do not charge an administration fee.
Please see below for an outline of the contribution rates required to meet the legislation requirements. These rates apply to gross earnings:
Date: From April 2019
Total must be at least: 8%
Employer must contribute: 3%
Other points to be aware of
- It will be deemed illegal to take any action which results in temporary workers ceasing active membership of the NOW: Pensions scheme. Any choice to leave the scheme or opt-out must be made solely by the candidate themselves. Similarly, any attempt to induce or pressure workers into leaving the scheme (for example, by offering extra pay or suggesting that future progression within the company would be compromised), is illegal.
- Jobholders aged under 22 or those on earnings above £5,772 can opt-in and receive employer Lower paid workers can request to join the scheme but an employer contribution is not mandatory.
- The pay reference period is worked out on the basis of the worker’s normal pay period. As our candidates are paid on a weekly basis, our temps will be assessed weekly.