Seasonal Workers And Auto Enrolment Everything You Need To Know

Automatic enrolment means that every employer must automatically enroll workers into a workplace pension scheme if they meet certain criteria. A workplace pension is a way of saving for your retirement that is arranged by your employer. The automatic enrolment system started at the beginning of October 2012 with staff who work for the biggest businesses, with others being signed up over the following six years. Those who already save into a workplace pension scheme or are self-employed will not be signed up. Those who will automatically be enrolled under this new system will be those that work in the UK; are over 22 years of age and under the state pension age; are not already in the scheme; and earn more than £8105 a year. Those who are under age 22 or over state pension age and still working, can also opt-in. Part-time workers who earn less than £8105 a year can ask to take part, if they earn more than £5,564.

Qualifying earnings have increased every year and in 2015-2016 the earnings trigger for automatic enrolment is £10,000 with the lower level of qualifying earnings being £5824.

There has been a rise of seasonal workers in the UK over the years. Seasonal workers are defined as workers that may be required by certain types of businesses, such as the tourism industry, where there is a seasonal demand for increased workers. Generally those workers are regarded as employees for the period for which they are engaged. These workers will enjoy the usual statutory rights enjoyed by employees, subject to the relevant necessary qualifying period being fulfilled. The termination of employment of a seasonal worker is subject to giving at least the statutory minimum notice unless there was a contract in place that stated otherwise.

It is particularly complicated for employers to identify which workers will be eligible for auto-enrolment, especially when seasonal employees are involved. Seasonal changes in work result in peaks in pay for example at Christmas time or in the summer months with increased tourism. Some employees may become eligible for auto-enrolment and then drop below the earnings threshold again. Employers would still need to have auto- enrolled those employees (subject to a limited right to postpone enrolment for a waiting period of three months).

Employers may consider whether postponement is more beneficial rather than auto enrolling seasonal staff particularly if the employer knows that the seasonal staff will not be needed after three months. An employer can only postpone automatic enrolment from the staging date; a staff member’s first day of employment; the date a staff member first becomes eligible for automatic enrolment. To postpone auto enrolment the employer must provide the staff member in writing within six weeks from the date postponement starts. An employer can postpone a maximum of three months, but it can be for much less than that.

Employers have to weigh the financial impact automatic enrolment has and the composition of their workforce. If an employer has lots of seasonal workers, it’s worth considering the introduction of a “waiting period” before staff are eligible for pensions.