Workplace Pensions- Hospitality Sector Warned

Employers who ignore their automatic enrolment duties could find themselves with a County Court Judgement, The Pensions Regulator (TPR) has warned.

The alert comes as TPR issues the latest update on its automatic enrolment enforcement activity (PDF, 131kb, 9 pages). It shows the number of fines has again risen in proportion to the large number of employers now reaching their deadline to comply.

The report notes that a small number of employers have now been handed County Court Judgements (CCJs) after failing to pay their automatic enrolment fines.

This can happen when employers persistently ignore penalty notices sent to them by TPR. Employers that fail to pay within 30 days of receiving the CCJ, will have the details entered on their credit record.

The report has the example of a South London removals firm who took nearly two years to comply with their automatic enrolment duties, despite receiving two Fixed Penalty Notices (FPNs) and an Escalating Penalty Notice (EPN). It was only when TPR applied for a CCJ that the employer became compliant and paid their fines.

Charles Counsell, Automatic Enrolment Executive Director said: “A CCJ goes onto an employer’s credit record and remains there for six years, seriously affecting their ability to borrow money for their business in the future.

“Burying your head in the sand and ignoring your legal duties means your staff are missing out on pensions they are entitled to and your credit rating and reputation could be hit.”

The report flags the hospitality sector as an area at higher risk of non-compliance. The sector, which includes hotels, pubs and bars, has received a higher percentage of fines. This is an area which typically includes a large proportion of employees on non-standard contracts, which in part explains the higher proportion of non-compliance.

Small employers can become non-compliant because they are more likely to leave things to the last minute but in most cases the nudge of a compliance notice is enough to get them back on track.

Mr Counsell added: “Our message to small and micro employers has always been to ensure they leave enough time and be clear about what they will need to do to comply. We are here to help – but we will take action if an employer is wilfully non-compliant.

“There’s plenty of information on our website on how to assess and enrol people who work varying hours, so there’s no excuse not to comply.”