Under changes to pension laws, all employers must automatically enrol eligible workers into a work-based pension scheme. ‘Eligible workers’ are those who are over 22, have not reached pensionable age, earn more than £9,440 a year and ordinarily work in the UK.
More than five thousand larger employers have enrolled nearly three million workers into the scheme. But soon, small employers with fewer than 30 staff will need to do the same for their workers.
While most small hotels, restaurants and pubs do not have to automatically enrol their workers until after June 2015, the executive director of automatic enrolment at The Pensions Regulator, Charles Counsell, warns that planning for this ‘can take some months’ and for hospitality businesses in particular, it makes sense to start planning early.
“Employers with workers who have fluctuating earnings have reported it is essential to leave enough time to gather the correct data and assess the workforce,” said Counsell. “The catering and hospitality industry is among the business sectors likely to employer workers with fluctuating earnings. This sector is likely to have temporary workers, agency staff, workers with different types of contracts and zero hours workers among their workforce.”
Eligible workers
One hotel payroll manager from a 200-bedroom hotel in Hampshire told BigHospitality: “As well as key hotel staff and those in the restaurant, we also have agency staff offering spa treatments and fitness instructors. Some of them work for us regularly and some are every now and again.
“I need to find out who we have a duty to.”
So, to answer all your questions, BigHospitality has worked with The Pensions Regulator to compile an essential checklist for hospitality businesses.
BigHospitality checklist: Pension auto-enrolment
Find out your staging date
All hospitality employers should check their ‘staging date’. The date is set in law and it is when your duty as a business to automatically enrol eligible workers is switched on. “You should ensure they make a note of the date and decide when they will need to take action,” added Counsell.
Medium-sized employers - those with between 150 and 249 workers - are due to stage before August this year. Employers with April or May staging dates should by now have both a pension and software provider in place.
But you should not that your staging date is not based on your current headcount, but by the number of persons in their largest PAYE scheme on 1 April 2012. Employers who have less than 30 workers on this date will begin staging in the summer of 2015.
Justin Johnson, head of HR for catering company Elior, stressed the importance of starting preparations in good time. ‘I’m sure that thousands of employers of all shapes and sizes will be able to relate to having a complex workforce of shift workers,” he said.
“If I’m honest, when I first sat here two years ago reviewing the legislation and the information from The Pensions Regulator, I thought ‘how on earth do you work your way through this?’
“But it seems much more achievable if, like us, you break it up into a bite-sized plan. At the end of the day, I think the pre-staging period should be a time for calm, not panic.”
Decide if you need outside help and find a pensions and payroll provider
Once the staging date has been determined, employers should then consider if they need outside help. Check if your existing systems can be used for automatic enrolment, but source an alternative payroll software provider if required
If you do decide to seek assistance, you will need to leave plenty of time to get this in place. Counsell added: “With potentially thousands of employers seeking help, it is sensible to avoid a rush and make approaches in good time.”
Employers should ensure their chosen professional - whether it be an independent financial adviser, accountant or book keeper - is offering the help they need to meet their automatic enrolment duties. The message is the same when seeking pension scheme and software providers.
Approaching both providers and advisers well in advance of their staging date will maximise employer choice and ensure their services will best meet the needs of the workforce. The Pensions Regulator recommends employers should have providers in place at least six months in advance.
Make sure information you hold about your workers is correct
Implementing automatic enrolment includes assessing workers for eligibility and notifying them of the automatic enrolment regime. Before beginning these tasks, employers will need to ensure that they have all the correct details for their workers.
Counsell said: “Having this information to hand when starting automatic enrolment preparations will make the task easier and smoother.”
Note when your duties begin and decide when to start planning
Counsell concluded: ‘We have been urging medium employers to act now because the clock is ticking - many of them have just months to go before their automatic enrolment duties are switched on.
“While small employers have longer to go, we are also urging them to act now as well. We do not want to see employers risking non-compliance, which can come at a cost.
“Employers with fewer workers will in some ways have less to do, but many of them will not be familiar with pensions and will need more time to do their research and make their arrangements.
“I would urge small employers to begin thinking about it now and take one step at a time. Their first step should be to find their staging date, circle it on their calendars and make a start on their plans.”
Visit The Pensions Regulator website
If an employer has not already found out their staging date, they should visit The Pensions Regulator website. A handy timeline planner also shows what you need to do and when, in order to comply with your automatic enrolment duties.