Employers who hire temporary or seasonal staff must follow the same workplace pension rules as they would for permanent employees. However, recent warnings from The Pensions Regulator indicate that some businesses need to correctly assess and enrol these short-term workers. What auto-enrolment steps should you take for employers taking on temporary workers over Christmas?

The Usual Auto-Enrolment Rules Apply

The auto-enrolment rules state that temporary and seasonal workers, like permanent staff, must be assessed for eligibility. This means assessing them at every pay period, even if they only work a few days.

When evaluating temporary staff, employers face extra complications. Earnings and hours can vary each pay period. Workers may start or leave mid-pay cycle. And they are often only employed for very short periods.

To simplify auto-enrolment for temporary employees, employers can use “postponement”. This allows for delaying pension assessment for up to three months.

Using Postponement to Simplify Auto-Enrolment

The postponement means temporarily delaying auto-enrolment for staff expected to be with the company for less than three months. To use it, the employer must apply for postponement within six weeks of the temporary worker starting.

Crucially, written notification must be provided explaining that auto-enrolment is being postponed. This must detail the employee’s workplace pension rights.

If the temporary worker requests to join the pension scheme immediately, the employer must enrol them subject to the standard eligibility criteria.

The three-month postponement period begins from the worker’s start date. It only depends on how many days they work during that time.

For example, a zero-hours employee starting 1st October can only have auto-enrolment postponed after 1st January – three calendar months later. This remains true even if they only complete eight weeks of work during that time.

Watch Out For These Postponement Pitfalls

While postponement can simplify auto-enrolment for temporary staff, employers must navigate some key pitfalls:

• Intermittent workers trigger a new three-month postponement period each time they start a new period of employment. It does not carry over from previous stints working for the company.
• Postponement only applies to workers expected to be with the company for less than three months. If they pass this threshold, auto-enrolment should happen as normal.
• Penalties exist for non-compliance with auto-enrolment regulations. However, first-time mistakes with temporary staff are often treated leniently.

Overall, temporary workers attract the same pension rights and auto-enrolment rules as permanent employees. Using postponement requires awareness of the criteria and pitfalls. But, if applied correctly, it can simplify pension admin for short-term hires – including vital seasonal staff at peak times like Christmas.