Workplace pensions for seasonal and temporary staff
Posted on: 16-10-2023
Workplace pensions for seasonal and temporary staff
According to The Pensions Regulator, some employers who take on seasonal or other temporary workers aren’t following the workplace pension rules correctly. If you’re hiring short-term workers what steps should you be taking?
Workplace pensions
Christmas is still a little way off but if you’re intending to take on seasonal staff you’re probably already in the planning stages. One thing you should definitely be thinking about is auto-enrolment of temporary staff in your workplace pension.
If you need any assistance with Workplace Pensions check out our Accounting Services.
Usual rules apply
You must assess seasonal and other temporary staff for entitlement to join your workplace pension in the same way that you would a permanent employee. That means you must assess each of them every time they are paid. This includes staff who work only a few days for you.
An extra complication when assessing temporary staff is that you’ll need to take into account that:
- they may start and leave in the middle of a pay period
- unlike your regular employees their earnings and hours may vary
- they only work for you for short periods.
You can usually avoid most of the hassle of workplace pensions for temporary workers by using auto-enrolment postponement.
What is auto-enrolment postponement?
If you know that a worker will be with you for less than three months, you can choose to delay assessing them for your workplace pension. You can use auto-enrolment postponement as long as you apply it within six weeks from the date after the employment starts. If you postpone auto-enrolment, you must provide the worker with a written explanation telling them what you are doing and their workplace pension rights.
Once you’ve notified the worker that you intend to apply postponement, meaning that you won’t automatically put them into a pension scheme even if they are eligible and have qualifying earnings, they can ask to be included. If they ask, you must enrol them in your workplace pension subject to the usual conditions regarding eligibility.
Where a worker only works sporadically, the postponement period begins when the employee starts working for you and ends three months later if they are still on your payroll for the same employment. The period isn’t measured by the amount of time they have been in paid work with you.
Example. Acom Associates takes on Harry as a temporary employee on a zero-hours contract. Acom decides to postpone auto-enrolment for him. Harry works on and off from 1 October to the following 31 January for a total of eight weeks, i.e. less than three months. However, Acom must include Harry in their workplace pension from 1 January, i.e. three months after the start of his contract.
Remember that The Pensions Regulator (TPR) can fine you for not following auto-enrolment procedure. However, it generally takes a soft approach to minor first-time mistakes.
If you would like any assistance with any of these points.