300% rise in auto-enrolment fines for employers
Auto-enrolment in pensions has been in place since 2012, requiring employers to offer their employees a workplace pension and make contributions on their behalf, but it seems that a significant number of employers are still not managing to comply. During the first three months of 2016, according to the Pensions Regulator, the number of employers on the receiving end of penalties from them for breaching auto-enrolment requirements has increased by more than 300%.
The regulator used its powers on 6,643 more occasions than in 2015 for a total of 8,812 penalties. Over 6,000 of those were stage warning letters. More than 2,000 employers failed to respond to these compliance notices, and as such were fined through fixed penalty notices. Depending on how big the employer is, these can range from £50 up to £10,000.
A statement from the Pensions Regulator suggests that the rise is due to pension’s duties being rolled out to over 130,000 small and micro-employers, which employ under fifty people. “Our research shows that most employers want to do the right thing by their staff”, said the regulator, “but that smaller employers are more likely to leave things to the last minute. They therefore need a ‘nudge’ to encourage them to meet their duties, which is why this bulletin shows an increase in the number of compliance notices.”
Despite the rise, the regulator has also offered reassurance that compliance levels overall continue to be high, with a rate of 95% amongst the first group of small and micro-employers undergoing automatic enrolment.
There is evidence to suggest that many of those firms which received compliance notices or penalties for breaching the auto-enrolment requirements simply didn’t give themselves enough time to complete before their staging date. A significant number even completed their applications after the deadline date had already passed.
If your company will be affected by the auto-enrolment requirements in the future, it’s essential that you don’t leave matters to the last minute, or you too could get stung by an unwanted fine. Having your plans already in motion, or at the very least ready to go, will help to ensure you are complying in plenty of time. If you have any questions around auto-enrolment, please feel free to get in touch with us directly