Pensions for seasonal staff?

May 28th 2024

According to The Pensions Regulator, there are employers who take on seasonal or other temporary workers who are not following the workplace pension rules correctly. If you hire short-term workers, what steps should you be taking?  Pamela Singh advises.

Summer is of course a peak time for taking on seasonal staff. One thing you should definitely be thinking about is auto-enrolment of temporary staff into the workplace pension.

You must assess seasonal and other temporary staff for entitlement to join the workplace pension in the same way that you would for a permanent employee. This means you must assess each of them every time they are paid. This includes staff who work only a few days.

An extra complication when assessing temporary staff is that you’ll need to be aware that:

• Unlike regular employees their earnings and hours may vary.
• They may start and leave in the middle of a pay period.
• They only work for short periods.

You can usually avoid most of the hassle of workplace pensions for temporary workers by using auto-enrolment postponement.

If you know that a worker will be with you for less than three months, then you can choose to delay assessing them for your workplace pension. You can use auto-enrolment postponement as long as you apply it within six weeks of the date after the employment starts. If you postpone auto-enrolment, you must provide the worker with a written explanation telling them what they are doing and their workplace pension rights.

Once the worker is notified of the intention to apply postponement, meaning that you won’t automatically put them into a pension scheme even if they are eligible and have qualifying earnings, they can ask to be included. If they ask, you must enrol them in the workplace pension subject to the usual conditions regarding eligibility.

Where a worker only works sporadically, the postponement period begins when the employee starts working for the employer and ends three months later if they are still on the payroll for the same employment. The period isn’t measured by the amount of time they have been in paid work.

Brown’s Ltd. takes on Joe as a temporary employee on a zero-hours contract. Brown’s decide to postpone auto-enrolment for him. Joe works on and off from 1 June to 31 August for a total of eight weeks out of twelve, i.e. less than three months. However, Brown’s must include Joe in their workplace pension from 1 September, i.e. three months after the start of his contract.

You should be aware that The Pensions Regulator can fine you for not following auto-enrolment procedures. However, it generally takes a soft approach to minor first-time mistakes.

Seasonal or temporary workers must be treated the same as permanent staff with regards to workplace pensions. This means you must auto-enrol them in your workplace pension scheme if they are eligible. You can postpone auto-enrolment for three months from the start date. You may then never have to include them unless they ask to be enrolled.

If you would like to discuss this or have other payroll related questions, please do contact the JRW Hogg & Thorburn Payroll department, they will be happy to assist.