Directors of limited liability companies where there were no other directors or employees were exempt from the employer duties – they didn’t have to be auto-enrolled into a qualifying scheme. However if there were other directors or workers, the employer duties applied to all directors and workers and the director(s) would have to be assessed.
Partners in limited liability partnerships (LLPs) had to be assessed as to whether they were a worker or self-employed. Assessment was against the following factors:
From 6 April 2016, the employer duty was turned into a discretionary power. In other words the employer can decide to treat a director as if the employer duties applied but can equally decide not to apply them. If the employer duties are applied, all duties apply, not just the enrolment duties – for example, the information requirements and the director’s right to opt out. But of course, it may be that on assessing the director, the employer finds that they are not an eligible jobholder and so don’t have to auto enrol them (but the director would still have the right to opt in).
If the employer decides not to apply the employer duties, the director again has the right to opt in.
The same applies to ‘genuine’ partners in LLPs. Genuine partners now don’t have to be subject to the employer duties but can be if the partnership decides that’s what it wants to do.
The partnership needs to apply HMRC’s Salaried Members Rules which are intended to define those members who are more like employees than partners in a traditional partnership,
A member of an LLP will normally be regarded as a salaried member (and therefore an employee who has to be automatically enrolled) if the following apply:
However even if the member of the LLP is deemed a genuine partner, the partnership could still treat them as a worker.
This will help those partnerships who would find it easier to enrol all eligible jobholders, including those who are in fact genuine partners.
Senior Product Insight & Technical Support Analyst