What’s it all about?
Back in 2012, the government felt that people weren’t saving enough for retirement and introduced auto-enrolment to combat the problem.
In a nutshell, the rules mean that UK companies have to include all their eligible workers into a pension scheme. The employer and employee make a contribution with each payroll run – based on a percentage of the worker’s salary. The employee can choose to opt out of the arrangement if they’d prefer to make their own arrangements for retirement.
Employers are given a ‘staging date’ when they have to start enrolling workers onto their scheme. This is based on how many employees were on the payroll in April 2012.
What does this mean for recruiters?
Auto-enrolment is extremely important if you engage with temporary workers on a Pay As You Earn (PAYE) basis. That’s because you’re responsible for enrolling them on a suitable pension scheme.
While this may seem like a burden, help is at hand!
How can an umbrella company help?
If you use a compliant umbrella company, such as Parasol, you’re in luck! Because the provider acts as a genuine employer, they’re required to operate the workplace pension scheme themselves – so there’s no need to worry!
What about limited companies?
Limited company contractors aren’t affected by the rules – provided they can prove they’re genuinely self-employed. This means there’s no additional work for you to carry out.
If you need more information, our sister firm ClearSky Contractor Accounting will be able to help.
What should recruiters look for when using an umbrella company?
The first and most important thing to check is that the provider is a genuine employer. If not, you’ll still have to supply the pension scheme and pay employer contributions – the very things you wanted to avoid in the first place.
You’ll also want to make sure that the provider is able to meet their obligations, so it’s a good idea to check out their financial position and see if everything’s in order.
Parasol: an auto-enrolment case study
We were given a staging date of April 1st 2013. It was really important for us to get everything ready on time because as recruiters, you’d expect the very best from us – and rightly so! With this in mind, it was essential that we put a reliable solution in place from day one.
To make sure everything went to plan, we carried out extensive testing over several months until we were happy with the result. We also had a bit of a head start, as we’d already been operating a compliant pension scheme since before the legislation kicked in, meaning all we had to do was adapt our existing processes.
How can Parasol help?
As one of the largest and longest established firms in the industry, you can trust us to look after your contractors and help shoulder your administrative burden.
Over the years, we’ve gotten to know contractors inside and out, and have moulded our services to fit around their busy WorkStyle. We’re committed to being with our contractors all the way, ensuring peace of mind for them and you.
In addition, our experience of launching a robust and fully compliant auto-enrolment solution has made us extremely well placed to offer you strategic guidance and advice. We also provide a wide range of employment solutions that help protect you from the risks and costs associated with the legislation.
So what are you waiting for? To find out what we can do for you and your contractors, get in touch today on 01925 644423 or email email@example.com.