Does it make a difference to Auto Enrolment, if I employ people on zero hours contracts?

Zero hours workers and auto enrolment

Zero hours workers and auto enrolment

One of the most common questions we get asked is “if I employ all my staff on zero hours, can I get out of my Auto Enrolment obligations?”

Well the answer is no!

Zero hours contracts are being increasingly used in a number of sectors that have a need for casual workers on a regular basis. As described in this Lexology article, “The worker is not contracted to work a set number of hours and is only paid for the number of hours he actually works. Some zero hours arrangements will require the worker to be available to work when called upon by the employer. Others are more flexible and the worker is free to accept or refuse work when offered.”

It is important to note that they are still workers for the purpose of Auto Enrolment and that they will need to be assessed along with the rest of the employees. This article makes a suggestion about using Contractual enrolment as a potential solution, thus taking away the need to assess them at every pay reference period – because they will all be in, you will just need to work out how much their contribution is..

BUT here is another thought for the cost conscious among us…

Postponement multi-use

We could try and use postponement: It can be used by an employer on multiple occasions in regards to the same worker. However, it cannot be used consecutively. For example, where an employee has fluctuating earnings and one month earns £800 making them an eligible jobholder, an employer can apply postponement for a period of up to three months. If at the end of the postponement period their earnings have decreased again, then the next time they earn over the threshold, postponement may be applied again. However, if at the end of the postponement period the worker is still an eligible jobholder, then they must be automatically enrolled.

A little untidy, but if you have a good administrative system behind you then it could be an option. It could certainly be used for seasonal workers, where you know their work patterns (school holidays being a good example).

These are the type of queries you can expect from your clients with regards to helping them with Auto Enrolment.  Understandably, many Advisers are not confident or skilled in the full ins and outs of Auto Enrolment which is where the team here at TAP Assist can help.  We can supply training, white labelled fact sheets and other materials that can help you educate your clients.  We even offer a fully outsourced service so that we help your clients become Auto Enrolment compliant directly on your behalf.

If you are interested in learning more please get in touch, one of the team will be more than happy to have a chat.