Right to work checks

All employers in the UK have a responsibility to prevent illegal working. You do this by conducting right to work checks before you employ someone, to make sure the worker is not disqualified from carrying out the work in question by reason of their immigration status. These checks are relatively simple and can be done online or manually.

Pensions auto-enrolment

Remember that when engaging employees, even for short periods, there is the requirement for an employer to enrol the worker into a workplace pension scheme from the first day of their employment, should they meet the minimum criteria based on age and earnings. The worker is able to opt out, but only once they have been enrolled into the pension scheme. It’s important that employers are not seen to encourage employees to opt out, so they cannot be involved in the opt out process; this must all take place directly between the worker and the pension scheme.

It is possible to use what’s known as a postponement period to defer your employer obligations for any period of time, up to three months in length. This can help ease the administration burden of enrolling temporary workers into the pension scheme, where they will be working for you for less than three months. You need to notify the employee by issuing a postponement notice. They do have the right to opt in to the pension scheme during the postponement period. At the end of the postponement period, you will need to enrol them into the pension scheme should they meet the criteria to do so. You cannot use a postponement period again at this point, as they cannot be used concurrently.

National Minimum Wage

All workers are entitled to the National Minimum Wage (NMW) for every hour they work. At busy times of year, additional hours may be required to ensure work is completed on time. Employers need to have accurate time recording in place, to ensure workers are not underpaid during these busy periods.

Also, employers should be aware that if they stipulate a worker needs to provide their own uniform or equipment, that an equivalent amount will be treated as a deduction for NMW purposes, so the worker needs to be paid the NMW rate after deducting this amount.

The penalties for breaching NMW regulations are severe, starting at 200% of all arrears going back over six years for current and ex-workers. So being NMW compliant is a must for all employers.

Self-employed

It can be tempting to pay workers as self-employed where they will only be engaged on a short-term basis.  But employment status should be considered initially, as HM Revenue & Customs (HMRC) will not accept that a role is one of self-employment where they are carrying out a role similar to other employees in your organisation. Often, this route is attempted so that employers avoid paying National Insurance contributions, and they do not have pension auto-enrolment or NMW obligations. HMRC regularly challenges this area and teams up with the Pension Regulator in its investigations.

Employment status is also critical in determining a worker’s employment rights, therefore it’s vital a worker is engaged on the correct basis from day one.

Angela Ferguson
Director