Payroll

Auto-enrolment: Small and micro firms rise to the challenge

Fred Heritage | 28 January 2016 | 8 years ago

shutterstock_262471361
Small and micro businesses that reached the early auto-enrolment staging date last year showed a 90 per cent compliance rate
The first group of small and micro businesses to reach the auto-enrolment staging date achieved high rates of compliance with responsibilities under the new framework, suggesting smaller employers are generally able to navigate through the potentially choppy waters of auto-enrolment.

The latest Pensions Regulator Quarterly Compliance and Enforcement bulletin demonstrated a 90 per cent compliance rate amongst early-staging small and micro businesses to have reached a staging date in June last year.

The figures indicate that, with simpler payment set ups and fewer staff, small businesses might be better equipped for auto-enrolment than larger firms. Small employers were found to be meeting responsibilities without needing to call pension schemes or use full waiting periods.

However, worries remain about the potential costs small businesses could face as a result of auto-enrolment. Policy director at the Federation of Small Business (FSB), Mike Cherry, warned that small firms need to ensure legislation is properly understood and that preparations are made well in advance of staging dates.

it’s good to see such high levels of compliance among small firms that have staged so far, said Cherry. ‘smaller businesses recognise that auto-enrolment will be good for staff, however it is clear that many will struggle to get to grips with the legislation, whilst large numbers are concerned about the costs.

‘smaller firms should seek advice and guidance from trusted parties, including the FSB. Auto-enrolment is a legal requirement for every employer, and those that fail to comply run the risk of being fined.

NEST, the national workplace pension scheme set up as part of the government’s pension reforms and available to all employers to use to meet the new requirements, had some interesting data. It found that 44 per cent of employers that staged in summer 2014 auto-enrolled the first workers in the three-month period after the staging date, reducing to 29 per cent of small firms and 26 per cent of micro businesses.

The information showed that the smaller the employer, the more efficiently the auto-enrolment process was handled.

The same survey also revealed that 72 per cent of small and micro firms expect to have to call NEST for support or advice rarely or never, indicating that in the future these firms expect managing auto-enrolment to be easy, and not time-consuming.

Commenting on auto-enrolment developments, CEO of NEST, Helen Dean, said: These are the first insights of this kind. Weve looked at real experiences, thoughts and behaviours of small and micro employers as they navigate their way through auto-enrolment. Did they struggle? Did they fail? Is auto-enrolment too much for small and micro employers? Our figures showed that concerns are largely unfounded.

defying expectations, small and micro employers are rising to the challenge and meeting auto-enrolment head-on, added Dean.

Are you aware of your business’s responsibilities under auto-enrolment?

Topic

Payroll

Related Topics

What is Payroll Flow? How Companies Such as PayFit are Streamlining Payroll Processes for SMEs
21 July 2023

What is Payroll Flow? How Companies Such as PayFit are Streamlining Payroll Processes for SMEs

Read More →
A Guide For Employers & Employees When Working A Week In Hand
1 April 2022

A Guide For Employers & Employees When Working A Week In Hand

Read More →
How has COVID-19 affected payroll?
27 January 2022

How has COVID-19 affected payroll?

Read More →
How does payroll work? Here’s what you need to know
15 June 2021

How does payroll work? Here’s what you need to know

Read More →
Tesco underpaid workers by over 5m. What are the consequences?
20 January 2021

Tesco underpaid workers by over 5m. What are the consequences?

Read More →
Does the new Prompt Payment Code overhaul mean you’ll get paid in 30 days?
20 January 2021

Does the new Prompt Payment Code overhaul mean you’ll get paid in 30 days?

Read More →

If you enjoy reading our articles,
why not sign up for our newsletter?

We commit to just delivering high-quality material that is specially crafted for our audience.

Join Our Newsletter