Compulsory Pensions are coming to the UK from October 2012. The administrative burden which they bring and the cost of compulsory employer contributions will have a particularly striking effect on retailers.
The date on which the duty applies - known as the “Staging Date” - varies with employer dependent on the size of its workforce. Employers are judged by the size of their workforce as at 1 April 2012 according to PAYE payroll. Therefore, if your workforce varies with casual hires, the use of agency staff or temporary increases in hours for part-timers you may be able to keep your PAYE payroll workforce below a Staging Date threshold. If you use a bank of seasonal employees it may help to review the lists to see if any should come off.
The first Staging Date is 1 October 2012 and catches employers with 120,000 employees or more. The next three Staging Dates catch those with 50,000 employees or more (1 November 2012), 30,000 or more (1 January 2013) and 20,000 or more (1 February 2013). Once the Staging Date applies to you, you could bring it forward but you cannot postpone it.
You will notice that December 2012 has not been used. December 2013 is not used either, and indeed, right the way through the Staging Date process (which finishes in 2016) no employer has been given 1 December as a Staging Date. This is because the Government wanted to avoid imposing burdens on employers in the busy Christmas period. However, it fails to take account of the fact that an HR Department will need to work with the existing workforce in the period prior to the Staging Date to ensure that the employer fulfils its duties. So in fact a 1 January Staging Date looks like a significant problem for a retailer.
The compulsory employer contributions which are payable from the Staging Date for all employees will also catch Christmas staff retained for the January sales if you have a 1 January Staging Date. Note this is based on the current legislation and the Government may still change that to allow employers to have a three month postponement period so that short term staff are not involved. There will also be various pay thresholds before employees become eligible but these employees all still count for measuring the size of your PAYE payroll at 1 April 2012.
Field Fisher Waterhouse LLP will be producing more briefing notes through the next twelve months to help employers through the Compulsory Pensions process including project planning, using the government-created NEST scheme and ways in which you can convert your existing scheme if you want to use that to comply with the new laws.
HR Retail Circle Update
David Gallagher and Nick Thorpe will be speaking at this Thursday's HR Retail Circle Update, hosted at Fieldfisher's offices. Further details about The HR Retail Circle are available here.