07.08.2023

New pension rules for warehouse, labouring and logistics

The Government has introduced new legislation to encourage more people to save for their retirement throughout their career, and this impacts every employee in the UK, even temporary or part time ones.


It is the biggest pension shake-up for decades and every organisation that employs staff is affected, and must make the changes by 2018. If employers haven’t got a company pension scheme, then they will need to set one up this year.


Automatic enrolment of employees

Under the new law, as soon as an employee becomes eligible in terms of age and earnings, firms must automatically enrol them on to a company pension scheme. Auto enrolment has been around for some time for larger companies, but this year it will impact on organisations of all sizes.

This auto enrolment of all staff has to be done within six weeks of their start date if they earn over £10,000 per annum and they are aged over 22 years but below the state pension age.

If they earn between £5,824 and £10,000, they must be given the chance to opt in to your company pension. 

For those staff (auto enrolled or opt in), employers must set up their payroll to add 1% of their earnings and a company contribution of 1%, to the pension scheme. This amount is set to rise over the coming years.

Anyone earning less than £5,824 can opt into the company pension scheme. However, employers don’t have to contribute in that case.

After a month, any employees can opt out of the company pension scheme if they want to. However, every three years employers will have to auto enrol them back in if they are eligible, as part of the Government’s plan to support retirement saving.


How temp, part-time or seasonal staff are affected

Even if your staff are temporary or only work part-time, as soon as they regularly earn over £192 a week (or £833 a month) they qualify for auto enrolment into a company pension scheme. This calculation must include all forms of payment, including commission, overtime and bonuses.
As an employer in the warehousing, logistics and labouring sectors, there may be times when you take someone on for a short-term contract. Or possibly, you know that when their earnings go over the limit, it was a one-off.

Under those circumstances you can postpone auto enrolment for three months, as long as you write to the employee and explain why you have done this. If they leave your employment in that time or earnings settle back down below the limit, you don’t have to enrol them on the scheme.


When do you have to comply?

Every organisation in the UK which has employees – even if it is only one member of staff – will be issued with a staging date in the next few months, which is their deadline to comply with the new company pension and auto enrolment laws.

There is helpful advice on postponement on The Pensions Regulator website: http://www.thepensionsregulator.gov.uk/en/employers/duties-checker/outcomes/i-am-an-employer-who-has-to-provide-a-pension/work-out-who-you-need-to-put-into-a-pension-scheme/postponement.aspx 

If you would like more help on how to manage employee recruitment, including taking on agency staff to simplify your payroll, we would be delighted to help.


Posted by: Extraman Recruitment