There are many quirks that I’ve
come across when looking at auto-enrolment pensions with clients, one of my
favourites is how you treat a zero hour contract worker for auto-enrolment.
Like it or not, if they have a contract of employment with you and you pay them
through your payroll, then the chances are that you will still have to assess
them for auto-enrolment – although I have to caveat that and say you should
seek legal advice.
Now, this shouldn’t hopefully be too much of an issue for most employers – you’re already going to be assessing the rest of your employees, so you’ll just have to add the zero hour workers onto the list. Not so bad for the smaller employers, but having just dealt with an employer of 900, where 850 employees have zero hours contractors I have seen it cause some challenges!
If you are a cost conscious
employer, it shouldn’t dramatically increase the pension bill either, since
many of these workers earn less than the £787 per month to trigger
auto-enrolment, plus you can use postponement to mitigate the cost further.
The main challenge around zero hour
working is the payroll data. These workers by their nature tend to come &
go quickly and getting timesheets in for their irregular hours is not always
easy. So if you have zero hour workers, you might need to look at earlier cut
off dates for getting information into payroll, so that you can fit in the
auto-enrolment assessment with enough time to spare.
Rob Barksfield
Auto-enrolment Consultant
Telephone: +44 (0)20 7893 3456
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