At a staging date date unique to each business, every UK employer must automatically enrol their employees into a qualified pension scheme. “Employees” also includes Temporary Workers.
“Every employer will have a date from when the automatic enrolment duties come into force for their business. This is called an employer’s ‘staging date’. Automatic enrolment is being staged in over a period of six years, which started with the largest employers in 2012.” The Pensions Regulator
Every employment business providing temporary workers will also have a staging date at which point their temporary workers and the agency (on behalf of the Client) must make contributions.
Tiger Recruitment’s staging date is 1st August 2015 and up until 1st October 2017, we are legally bound to provide our temporary workers with a qualified pension scheme. Depending on the provider used, the employer’s contribution is a minimum of 1% and the temporary workers also 1%.
From 1st October 2017, the employer’s contribution is a minimum of 2% and 3% from the temporary worker.
From 1st October 2018, the employer’s contribution is a minimum of 3% and the temporary worker, 5%.
A temporary worker must be enrolled in a pension scheme if they are aged between 22 and the age at which they are able to collect their state pension. The temporary worker must also be earning a gross of £192 per week. A job seeker can opt out of a pension scheme, but we think this will be extremely unlikely in reality. The job seeker can also voluntarily opt-in if they are earning less than gross £192 per week.
Impact to our Clients?
Tiger Recruitment will handle all pension contributions from the Candidate and the Client in the same way that we look after national insurance and holiday pay. We will select a pension scheme that fits the needs of our Clients and Candidates. For instance, the pension provider, NEST (National Employment Savings Trust) gives Candidates the opportunity to invest into ONE pension if they are temping through more than one agency (as long as other agencies are using NEST as their pension provider. The advantage for our Clients is that the minimum statutory contribution amounts can be paid. In short, the impact to our Clients from an administrational point of view will be minimal.
Whilst Tiger Recruitment will absorb any costs associated with setting up their pension scheme for temporary workers, the employer’s contribution will be passed on to our Clients. The cost to our Clients will therefore be an additional 1% on temporary pay from 1st August 2015-2017, 2% on temporary pay from 1st October 2017 and 3% on temporary pay from 1st October 2018.
Do the Agency Workers Regulations apply to Workplace pensions?
No they don’t. Pension contributions are still exempt from the Agency Workers Regulations.
N.B. once you have engaged a temporary worker for more than 12 weeks, you do not need to pay them the same pension contributions that you would pay a permanent employee.