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Posts Tagged ‘12 Months’

Auto Enrolment – Employers new pension obligations

From October 2012 all employers with at least one worker in the UK will need to automatically enrol certain members of their workforce into a pension scheme. As an employer you will need to make a contribution to it and ensure that you meet all of the new requirements to comply with the law (even if you already offer pension arrangements for your workers you will still have some new obligations to meet).

When will this affect me?

The new employer duties for auto enrolment will be introduced in stages over 4 years starting later this year. Each employer will be allocated a date from when the changes will first apply to them, known as the “staging date”. The first staging date will be in October 2012 and will continue through to 2017.

Your staging date will be based on the number of people that you have in your PAYE scheme and employers with the largest number of workers will have the earliest staging dates. The Pensions Regulator will contact you 6-12 months before your staging date but it would be prudent to start looking at the effects this will have on your business sooner rather than later.

  • Employers with 250 or more staff are being staged in from 1 October 2012 to 1 February 2014 with the largest employers coming in first. Their staging timetable hasn’t changed.
  • Employers with 50 to 249 members of staff will be staged in from 1 April 2014 to 1 April 2015.
  • Employers with 30-49 staff will be staged in from 1 August 2015 to 1 October 2015.
  • Employers with less than 30 members of staff will be staged in from 1 January 2016 to 1 April 2017.

To find out what your staging date is likely to be you can visit The Pensions Regulator website at:

www.tpr.gov.uk/staging

What employers will need to do to comply with the law

Employers will need to:

  • Automatically enrol certain workers into a pension scheme
  • Provide a qualifying scheme and inform all workers what type of scheme has been chosen
  • Pay employer contributions for eligible jobholders into the scheme
  • Tell all eligible jobholders that they have automatically been enrolled and that they have the right to opt out if they want to do so
  • Provide workers with certain information about the changes and how they will affect them
  • Inform workers that do not fall into the “eligible” category that they can opt in to the pensions scheme
  • Register with The Pensions Regulator and give detail of your qualifying scheme and the number of people that you have automatically enrolled.

Employers must not:

  • Encourage workers to opt out of the qualifying pension scheme
  • Have recruitment practices that will benefit job applicants who indicate they are prepared to opt out
  • Treat a worker unfairly or put them at a disadvantage because of automatic enrolment.

Which employees will I need to automatically enrol?

Workers who need to be automatically enrolled are called “eligible jobholders”.

An eligible jobholder is:

  • Aged between 22 and state pension age
  • Working, or ordinarily working in the UK
  • Earning above a certain amount (currently proposed to be £7,475).

To identify if a person is earning above or below the lower earnings limit (£7,475) you will need to include earnings in salary, overtime, commission, bonuses, sick pay, maternity, paternity and adoption pay. This calculation will then give you the workers “qualifying earnings”.

It may be possible for employers to defer this assessment – by allowing a “waiting period” of up to 3 months. More guidance on waiting periods will be published by The Pensions Regulator shortly.

What pension characteristics will my scheme be required to have to meet the new legislation?

Employers with an auto enrolment duty will need to choose a pension scheme they can use for auto enrolment. You may use an existing scheme or set up a new one with a pension provider. In addition, there is the National Employment Savings Trust (NEST). NEST is a pension scheme with the following characteristics:

  • It has a public service obligation, meaning it must accept all employers who apply
  • It has been established by Government to ensure that employers can access pension saving and comply with their automatic enrolment duties.

Each pension scheme will have its own rules, but all employers will need to provide their scheme with information about the person who is being automatically enrolled. In addition your scheme must:

  • Be able to auto-enrol jobholders within one month of their auto-enrolment date
  • Meet minimum requirements that differ depending upon whether the scheme is a money purchase or final salary arrangement
  • Not require the employee to make any choice about funds in order to be a member
  • Not put any barrier on membership other than a three month waiting or postponement period after the employee first becomes eligible
  • Have a legally binding obligation on the employer to make the necessary minimum contributions (many existing group personal pensions or stakeholder schemes do not have this in place).

If your current scheme does not meet this criterion then you may have to amend your existing scheme or select a new scheme that is compliant such as NEST.

Employers who already have a pension scheme can confirm that it is suitable for automatic enrolment by a process called “certification”. The Pension Scheme Regulator will contact you 6-12 months before your staging date to confirm your arrangements.

What should I do now to prepare?

  • Review your current pension arrangements
  • Identify if you have the expertise in house to manage the process or if you require the services of an HR Management Support consultant
  • Identify any potential job holders, job roles or situations where auto-enrolment may not apply
  • Contact your current pension provider to identify if the scheme is going to be auto-enrolment compliant and meet the new legislative criteria
  • Identify budget implications and review the potential for using salary sacrifice to help fund the costs of auto-enrolment
  • Identify when your staging date is likely to be.

 

More details relating to auto enrolment can be found on the Pension Regulator website www.tpr.gov.uk/staging

Flexible working – Responding to applications

Responding to applications for flexible working

Who can ask for flexible working arrangements?

Anyone can ask their employer for flexible working arrangements, but the law provides some employees with the statutory right to request a flexible working pattern.

Applications can be made by:

  • an employee, but not an agency worker
  • employees who have worked for their employer for 26 weeks’ continuously before applying
  • An employee who has not made another application for flexible working under the right during the previous 12 months

And:

  • have or expect to have parental responsibility of a child aged under 17
  • have or expect to have parental responsibility of a disabled child under 18 who receives Disability Living Allowance (DLA)
  • are the parent/guardian/special guardian/foster parent/private foster carer or as the holder of a residence order or the spouse, partner or civil partner of one of these and are applying to care for the child
  • are a carer who cares, or expects to be caring, for an adult who is a spouse, partner, civil partner or relative; or who although not related to the employee, lives at the same address as the employee

The law requires the employer to seriously consider an application, and only reject it if there are good business reasons for doing so. The law only provides the right to ask for flexible working – not the right to have it. Employers can reasonably decline an application where there is a legitimate business reason.

Employees who do not have the legal right to request flexible working are, of course, free to ask their employer if they can work flexibly.

Examples of flexible working are:

  • flexi time: choosing when to work (there’s usually a core period during which employees have to work)
  • annualised hours: employees hours are worked out over a year (often set shifts with flexibility on deciding when to work the other hours)
  • compressed hours: working the agreed hours over fewer days
  • staggered hours: different starting, break and finishing times for employees in the same workplace
  • job sharing: sharing a job designed for one person with someone else
  • homeworking: working from home
  • part time: working less than the normal hours, perhaps by working fewer days per week

How must the application be made?

The employee must comply with the following requirements:

  • the application must be made in writing, stating that it is being made under the statutory right to apply for flexible working
  • the application must confirm the employee’s relationship to the child or adult
  • the application must set out the employee’s proposal and explain what effect the employee thinks this will have on the employer’s business and how this may be dealt with
  • the application must specify a start date for the proposed change giving the employer reasonable time to consider the proposal and implement it. This may take 12 – 14 weeks.
  • the application must state whether a previous application has been made and if so the date on which it was made
  • the application must be dated

If the application is approved the variation in the contractual terms becomes permanent and the employee has no automatic right to change back to their previous pattern of working unless the application included a specified time period. (Employers may approve an application on a trial basis only).

Responding to applications for flexible working.

On receipt of a written application for flexible working the employer must:

  • Arrange and hold a meeting with the employee within 28 days to discuss the request. (A meeting is not required if the employer agrees to the terms of the application and notifies the employee accordingly.)
  • If requested the employer must allow the employee to be accompanied at the meeting by a work colleague.

Following the meeting the employer must:

  • Notify the employee of their decision in writing within 14 days of the date of the meeting. The notification will either:
  • Accept the request and establish a start date and any other action
  • Confirm a compromise agreed at the meeting
  • Reject the request and set out clear business reasons for the rejection together with a notification of the procedure the employee should follow if they wished to make an appeal against the decision.

If an appeal is made. The employer must:

  • Arrange to hear the employees appeal within 14 days of it being made
  • Notify the employee of the decision on the appeal within 14 days of the meeting which either:
  • Upholds the appeal and details the agreed flexible working arrangements
  • Dismisses the appeal and states the grounds on which the decision was made.

On what grounds can applicants be refused flexible working arrangements?

Providing the employer has given serious consideration to the application for flexible working it can be refused for one or more of the following reasons:

  • The burden of additional costs
  • Detrimental effect on ability to meet customer demand
  • Inability to reorganise work among existing staff
  • Inability to recruit additional staff
  • Detrimental impact on quality
  • Detrimental impact on performance
  • Insufficiency of work during the periods the employee proposes to work
  • Planned structural changes

How can employers demonstrate that they have given serious consideration to an application for flexible working?

The most effective way is to carefully review the role the flexible working applicant undertakes and consider how the changes would affect the ability of the employee to fulfil the role if the proposed changes were made. Would the company need to make other adjustments, would those adjustments be feasible, realistically affordable  or would it not be practical to make those adjustments due to the detrimental effect on the business.  HR Management Support Ltd has developed  a questionnaire that can be used by the employer to help identify and measure the effect flexible working arrangements might have on the role and the business as a whole.

Obtain your own free copy of this flexible working questionnaire by completing the form below and a copy will be emailed to you.

Your First Name (required)

Your Email (required)

Telephone Number

Subject

Your Message

Sharing Maternity Leave

Under the regulations fathers will be entitled to up to six months additional paternity leave provided the mother has returned to work, which will give parents the option of dividing a period of paid leave entitlement between them. Read the rest of this entry »
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