FOR ADVISERS ONLY
The effect on the workforce
Assessment of workers
The assessment of workers is first required:
- on the auto enrolment start date
- whenever a new worker joins
- on a worker's 16th birthday
- on a worker's 22nd birthday
The assessment of workers is also required:
- on the date the employer receives an opt-in or joining notice, and
- on a regular basis for non-eligible jobholders and entitled workers.
The different types of worker
There are three different categories of worker, determined by their age and how much they earn:
- eligible jobholders
- non-eligible jobholders, and
- entitled workers.
The table below helps to identify each type of worker.
1These figures are for the 2019/20 tax year.
Exclusions and exceptions from the employer duties
The following people are treated as workers but are not covered by the employer duties:
- those who do not work or ordinarily work in the UK
- those under age 16, and
- those aged 75 and over.
The following people are not treated as workers so the employer duties don't apply to them:
- the self employed, and
- members of the armed forces.
If a worker meets any of the following conditions, the employer duties may vary and/or may not apply to them:
- the worker has opted out or is no longer an active member of a qualifying scheme
- the worker has given notice or been given notice of the end of their employment
- the employer has reasonable grounds to believe that the worker is protected from tax charges on their retirement savings under HMRC's primary, enhanced or fixed protection
- the worker has been paid a winding up lump sum whilst working for the employer, and
- left employment after the payment has been made, and
- subsequently been re-employed by the same employer
- the worker meets the definition of a 'qualifying person' for the purposes of separate UK legislation on occupational pension schemes and cross-border activities within the European Union
- the worker is a director of a company. If an employer chooses not to auto enrol a director, they must still be given the option to opt in.
The employer duties for the worker can vary depending on which exception applies to them. In some circumstances, employers are given the choice whether to comply with a duty or not, while in others, the duty can be removed altogether.
It's also possible for a worker to meet the conditions for more than one exception at the same time.
Postponement
Employers can use postponement to defer the assessment of workers and their employer duties. The postponement period can't be more than three months.
The end of the postponement period is known as the deferral date and employers must assess workers on this date.
What the employer must do if postponement is used
Employers who use postponement must provide workers with a postponement notice. This must be issued within six weeks and a day of:
- the auto enrolment start date
- the worker's first day of employment
- the day that a worker becomes an eligible jobholder (for example, the day a worker reaches age 22.)