Hi, I'm Toby Christie automatic enrolment policy manager at The Pensions Regulator and today I'm talking about assessing the workforce for automatic enrolment.
Assessing the workforce is a key step that every employer must take as they comply with their automatic enrolment duties.
Quite simply it means looking at the staff and deciding who needs to be automatically enrolled and who doesn't, and as it is a key step for employers it is something that you as an adviser might want to undertake on behalf of the employer.
Now not every member of staff needs to be automatically enrolled, it depends on their age and earnings, and those who earn above £192 of qualifying earnings in a week or £833 of qualifying earnings in a month and who are age 22 or over, but under state pension age will need to be automatically enrolled.
Now age should be easy to determine, as your client should have these records close to hand, but earnings may not be so straightforward.
The law says that you must look at qualifying earnings, and what's qualifying earnings?
Well that's wage, salary, fluctuating elements of pay and some statutory payments.
Now that's fine but in the real world employers don't necessarily pay elements that fit neatly within those headings, so to make it easier for the employer I think we can use a proxy for qualifying earnings that you will recognise, and that's NI-able pay, by which I mean the earnings that the individual will pay National Insurance contributions on.
But for some employers they won't know their staff's earnings until they run payroll at the end of the week or the end of the month, that's because earnings fluctuate greatly on a week-by-week or month-on-month basis.
For those employers they should look to software for help, and they should look towards their payroll software.
Now many payroll providers already provide a module or an add-on for automatic enrolment that will do their earnings number crunching for them, and so they should look at their software, see if it has this functionality and if not they should speak to their payroll provider and potentially purchase that additional add-on.
And if you are an adviser who runs payroll for your client; you should look for that as well, look at your software and if you don't have that functionality, look to purchase it.
So assessing the workforce for many small and micro employers and for you may not be complicated, in fact it may be obvious who needs to be put into a pension scheme and who doesn't, but having the right software can certainly make it easier.
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