A Freedom of Information request has showed that the number of fines being issued to employers who have failed to comply with their workplace pension duties has continued to rise. In 2018/2019 more than £68 million was generated from such fines, with almost £15m of that coming from fixed penalty notices.
Under the auto-enrolment legislation all employers must auto-enrol staff who earn more than £10,000 per year into a workplace pension, if they are aged between 22 and state pension age.
The Pensions Regulator is now cross-checking any details supplied to HMRC by an employer in an attempt to identify non-compliance with auto-enrolment. In May 2019 the regulator also started conducting short-notice inspections on those businesses that failed to comply, and this will continue throughout the summer. As well as looking for companies that have ignored their workplace pension responsibilities, they are also looking for employers who may be attempting to encourage their staff to opt-out of joining the pension scheme. In October 2018, the directors of Derby–based recruitment firm Workchain received suspended prison sentences and ordered to pay more that £280,000 in fines for plotting to illegally opt workers out of their pension scheme.
Fixed penalty notices are generally given to employers who have failed to comply with statutory notices for auto-enrolment and are set at a value of £400. For employers who continually fail to comply with the rules after receiving a written warning they can expect to be issued with an EPN – Escalating Penalty Notice. These can vary between a daily rate of £50 and £10,000, depending on the number of staff in the business.
For any questions or help with your auto-enrolment compliance please contact us.