Auto-enrolment only after probation?

It’s been suggested that your business should only auto-enrol new employees who are eligible into your workplace auto-enrolment pension scheme once they’ve successfully completed their probation period. Is this acceptable?  Natasha Crockatt from our Payroll department answers the question..

If you require your employees to successfully complete a probationary period before they start working for you on a permanent basis, you can choose to postpone auto-enrolment. However, this is only possible for probationary periods that are no longer than three months.

EXAMPLE
Andrew starts working for you on 1 July and he has a two-month probation period. Andrew is 25 and earns £26,000 per year so is an eligible employee for auto enrolment-purposes.

You can decide to postpone auto-enrolment until Andrew successfully completes his probation period and his employment on a permanent basis has been confirmed. In this situation, you must issue Andrew with a postponement notice. Also, be aware that he may still exercise his right to opt-in to your pension. Providing Andrew still meets the auto-enrolment criteria at the end of August when his permanent employment is confirmed, he must be auto-enrolled at that stage.

SUMMARY
Pensions auto-enrolment for an eligible new employee can be postponed for up to three months. This is useful if permanent employment is subject to the successful completion of a probation period. You must notify the employee of the postponement in writing.

The JRW team would be happy to answer any further questions you may have, contact the team here.