Small retailers who aren’t on top of their payroll data by their start date for the auto-enrolment of workplace pensions may face “serious delays” and fines, according to pensions provider Now: Pensions.
Employers who employ fewer than 30 workers have until April 1 2017 to set up auto-enrolment, but experts including Now: Pensions advise that firms start preparing up to 12 months in advance.
Now: Pensions director Amy Mankelow told Drapers the challenges facing smaller employers can make preparing for the legal obligations more complex.
“Almost all don’t have dedicated HR or finance teams so that makes things harder,” she said. “Some independent business-owners look to accountants and third-party advisors but others do everything themselves, so that means the work can build up.”
The most important thing is to ensure that all payroll information is easily-available and up-to-date, according to Mankelow.
“There is a bit of confusion among the smallest business about who has to set up auto-enrolment, but even if you employ just one person it’s a legal requirement,” she said.
“If you have something like a missing NI number that could cause real delays,” she said. “And delays can lead to fines from The Pensions Regulator.”
Any employer who misses their start date, the point at which the must legally have set up a workplace pensions scheme for all employers, is subject to a flat fine of £400.
Subsequently employers with between 5 and 49 staff will incur penalties of £500 per day for each further day they are over the deadline. For businesses with one to four employees it is £50 per day.
Mankelow advises any business-owner who has missed the deadline not “to panic” and to take steps to address the situation immediately.
“If The Pensions Regulator sees that you’re looking to address the situation they’re likely to take a pragmatic approach,” she said. “But if you are aware of issues get in touch with The Pensions Regulator straight away.”