New Rules for Workplace Pensions

If you run a small business, it is vital that you stay informed about all types of workplace legislation. As the laws change and evolve, you need to be fully aware of your obligations as an employer, both to fulfil your responsibilities to your employees and to protect yourself from litigation.

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Pensions in the workplace have come under heavy scrutiny over recent years, with fears that not enough people would have enough set aside for retirement. Those employees who didn’t receive a work-based pension didn’t always realise they should be setting up a private pension. It became increasingly clear that there would be potentially be a whole generation with a massive income gap when they finished work. This would have a real negative impact on the economy, with much less disposable income being spent by the older generation and huge pressure on the welfare state to make up for the loss of income experienced by those who retire.

The government has therefore brought in new legislation to ensure that everyone in employment would have access to a pension as part of their workplace benefits. This puts the onus on you as an employer to make sure you are fully complying with all pension rules which began to be implemented in 2012.

Employer Obligations

Businesses are being ‘staged’ into the new system, so you need to check when you are eligible to sign up. From this date, you will need to have a workplace pension scheme in place if you didn’t already have one.

Automatic Enrolment

You need to enrol all employees who earn a minimum of £9,440 annually, are aged between 22 and the state pension age and work in the UK.

You don’t have to enrol employees who earn less than £473 per month, £436 every four weeks or E109 per week.

All of your employees who meet these criteria need to be entered into your pension scheme, under a system known as automatic enrolment. You will need to make a matching employer contribution to their automatic contributions, which will be taken at source from their salary.

Employees do have the option to opt out, so although it is mandatory for you to offer the scheme, it isn’t compulsory for them to stay in it. If an employee opts out, then you need to offer them the chance to rejoin every year, or re-enrol them every three years automatically. Some employees opt out at first, as they don’t want to lose the immediate income, but as their salary increases or they start to get older, many realise the importance of having a pension and decide to opt back in.

Defined Contributions

These types of plans are sometimes known as defined contribution schemes. Both employee and employer will know exactly how much they are contributing every month. This doesn’t guarantee the amount of pension income they receive, as this will depend on the type of investment the pension scheme is in. The contributions you both make will be a percentage of the employee’s earnings.

As with all pension solutions, there are various risks involved with each type. Aon Hewitt’s risk analyzer helps to decipher which pension plan is suitable for you.

For a small business, changes in legislation such as this can sometimes seem as if they just lead to extra work, extra expense and extra hassle. But the reality is that a job with a pension attached was always a more attractive proposition to the best talent, so forward-thinking businesses were already offering pensions as part of their employee benefits. This not only helped with recruiting the best talent, but was also a good way of retaining employees. By introducing mandatory pension schemes, the government is securing the financial future of the country and offering employees better terms at the same time.

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The Benefits of Workplace Giving

Workplace giving allows your employees to donate their money to charity in the most simple, effective and far-reaching way possible.

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You can organise things in-house or use an employee benefits company. You will find that organizing employee benefits does not have to be an expensive or time-consuming process.

Quick and Easy

Workplace giving is simple to set up and means that donations made by your staff can be up to 45 per cent more valuable. Money given to charity directly from pay does not incur any tax, meaning that more of it will go to the charities that need it.

This method of donation also benefits charities in more ways than just ensuring that they receive more of your staff’s money. It often means that they can save on administration costs and plan more confidently and be more forward-looking, as they know that regular finance is on its way. It also benefits employees, increasing their commitment to and connection to their workplace, and has risk benefits to the company itself.

It is one of the easiest benefits to administer, taking just minutes to set up and needing only around ten minutes each month to maintain. To start, simply fill in two forms to register with a Payroll Giving Agent who has been approved by HM Revenue and Customs. Also ensure that your business can facilitate pre-tax deductions through your payroll system.

The Payroll Giving Agent will be responsible for distributing donations from your staff to the charities they have chosen. This means that your own payroll department will only have to send one payment each month, which will then be distributed accordingly.

Setting up the deduction for the employees who have opted to take part will be similar to setting up a pension deduction. The deductions will be made after National Insurance has been taken but before any tax is deducted.

Each month a payment will then be sent, along with a list of the staff that are involved, the amounts they are donating and any differences to the list from the previous month. This may include details of an employee who has left your firm.

 Tax Benefits of the Scheme

A workplace giving scheme is not an expensive one to set up or administer and there are tax benefits to be gained. The costs are classed as a trade expense with an employee connection and are deductible when it comes to Corporation or Income Tax.

You may choose to meet the administration charge for the Payroll Giving Agent yourself or to enhance the donations as another method of increasing employee benefits. This would be classed as a charitable gift and could be deducted in Corporation Tax calculations.

Innovative ways of improving employee engagement

Every mature organisation faces times when its techniques are becoming stale, uninspired and robotic. In order to succeed, employees must be engaged, pro-active and determined. Here are innovative ways of improving employee engagement.

– “Rewarding Maximum Effort”

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Your employees work hard for a salary. They need some sort of financial incentive in order to improve their productivity. That is human nature. As the Russian proverb says “You pretend to pay us, we pretend to work.”
The goal of a successful company is to encourage extraordinary productivity according to Adams-Hall Publishing. An organisation improves itself by placing the most talented individuals in positions of leadership. These wise, hard-working men and women will lead the firm to higher goals. Consider your favourite football team. The manager places his best players in optimal positions to succeed. He gives players the tools to succeed and rewards the most engaged, energetic and hard-working.

“Culture of Success”

High-energy organisations create an environment that will lead to competition and innovation. The successful firm creates a culture of highly motivated workers who will go “beyond the pale.” People need a positive work environment that will reward them for their extra effort. Potential rewards encouraging this behavior could include the following:

  • Employee of the month
  • Prime parking spot
  • Holiday bonus
  • Electronic device for most productive worker

Workers must understand in their bones that those who invest the extra effort will be rewarded handsomely. A good environment will get people thinking about one of these rewards. If the employees walk past a “sign of the employee of the month” each day, then they will have the concept of “excellence” imprinted in their brains.

People love their electronic gadgets. Some might be on their cell phones all day texting or talking and some might want to check on their sports or finances with online connections. If you reward employee engagement with the latest electronic device, then all will work harder. The latest cell phone or laptop will also assist the worker in increasing his or her productivity. Thus you 1) reward hard work, 2) always remain in the mind of the employee and 3) give the worker the tools to succeed.

– “Long-Term Plan For Improving Engagement”

Just like money, there is a lagging time effect for any incentive program you institute. You must make sure that all the workers know that they will continue to be rewarded for better engagement. It must create a culture of improvement.

If it is only for a month, then some lazy workers will simply ignore it as a fad. If it is a long-term plan, then the expectations will seep into the marrow of the organisation.

Using Social Media to Increase Employee Engagement

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Any time you are running a business that involves social media, keeping your employees engaged with your users and followers can greatly impact the level of success you experience in any industry. Using social media to increase employee engagement is a way for you to take your business to the next level while ensuring your followers and potential customers are genuinely interested in the products, services or content you have to offer.

Connect With Everyone in the Office

Engaging your employees with social media in the office is possible by connecting with each one of them individually with your social media accounts. Have all of your employees connect with their social media pages, even if they are only using the company pages to represent your brand. The more connected all of your employees are with one another, the easier it is to effectively communicate and stay active online.

Why Employee Benefits Matter

Giving employee perks to those who are working for you is a way to get them more involved with your company and its expansion altogether. Handling benefits administration for your employees is a way to show you care and truly appreciate their time, effort and dedication in regards to their job and your company. Because not all companies offer benefits and rewards for utilizing social media, it can help your business to stand out while attracting other potential individuals to work for you in the future.

Allow Your Employees to Have a Voice

Allow your employees to have a voice when they are updating any social networking accounts you have that represent your business. Giving your employees a voice not only allows them more freedom altogether, but it shows your potential customers and fans that your company has a genuine voice that speaks directly to them. When you allow your employees to share their own opinions and to use their own voice within social media pages, it also helps to strengthen the professional relationship you have with one another.

Offer Rewards for Involvement

You can also offer rewards to your employees to help with getting them engaged with social media each day. Providing rewards and incentives for your employees to get involved with your social media accounts helps to boost morale while making the task even more enjoyable. Providing employee benefits along with rewards for participation is a way to get others excited about coming to work. You can offer everything from time off to free dinners or coupons, depending on what you have available to give and what is in demand from your employees themselves. You can also offer gym memberships, gift cards or even cash rewards at different times of the year to get your employees excited about coming to work and getting involved with social media communities.

The more involved you are with your employees and how they spend their time with the social media tools you provide, the more likely you are to move forward with reaching a wider audience of users and visitors.

Ten HR Professionals You Should Be Following On Twitter

It would be difficult to understate the importance of Human Resources in the modern business. Gallup polls conducted in 2012 showed that some 70% of the working population demonstrated a general disengagement from the company. This alarming trend is quite literally costing businesses a total of many billions of dollars every year across the world.

Human Resources is a way for companies to fight disengagement in the workplace and build bridges to employees who otherwise might feel disenfranchised, or like their opinions aren’t taken seriously.

To that end, social networking is changing the way we think about work. Employers everywhere are becoming more social, and better able to reach out to prospective and current employees alike. In fact, some companies are doing away with resumes altogether, and recruiting only using Twitter and other social networks.

With that in mind, anybody who has an interest in the ways that social networking are influencing the hiring process and human resources management would do well to follow some of the world’s leaders on the subject. Below are ten influencers in the human resources world who are as experienced as they are open about their process.

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1. Meghan M. Biro – @MeghanMBiro

Ms. Biro is currently the top ranked HR expert on Twitter and has a wealth of experience that she’s only too eager to share. Founder of TalentCulure and a serial entrepreneur, Meghan also is a regular columnist on Forbes and Glassdoor.

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2. Naomi Bloom – @InFullBloomUS
A managing partner at Bloom & Wallace, Naomi is a renowned consultant, analyst, thought leader and independent voice throughout the HRM delivery system (HRMDS) industry.

3. Laurie Ruettimann – @lruettimann

LaurieRuettimann A writer and public speaker on human resources, employment, and technology. Laurie has expertise as a HR leader in Fortune 500 organizations, such as Pfizer, Alberto-Culver, and Kemper Insurance

 

4. Jessica Merrell @blogging4jobs
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Recognized by Forbes as one of the top 50 experts in recruiting and leadership. She is the president and CEO of Xceptional HR and a leader in the HR community with more than 12 years of industry experience.

5. William Tincup – @williamtincup
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One of the more outspoken and controversial speakers in this list, William is a speaker, consultant, and an expert in many fields including user adoption and HR software.

6. Stacy Donovan Zapar – @StacyZapar

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CEO and Founder of Tenfold Social and the most connected woman on LinkedIn, Stacy started her career recruiting for Fortune 500 clients in the USA.

 

7. Guatam Ghosh – @GautamGhosh

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Guatam now works at HR Philips after a career as a freelance Social Business and HR Consultant. He is an expert in talent management, learning, and online communities.
8. Jason Averbook – @jasonaverbook

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Jason has over 20 years in the industry and is currently the chief business innovation officer at Appirio in Minneapolis. Jason was recently named one of the ’10 World’s Most Powerful HR Technology Experts’.

 

9. Morgan Missen – @mm

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Morgan is the former Head of Talent at Foursquare, and has a solid reputation from being a ‘super-recruiter’ for Facebook, Twitter and Google.

 

10. Steve Browne – @sbrownehr

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Mr. Browne is a strategic HR professional, as well as what he calls an “HR radical.” Follow him for a fresh perspective on human resources.

 

 

 

The individuals on this list have made names for themselves at some of the best known companies in the world. Following even one or two of them would give the average employee (or employer) a great deal of insight into the HR world. That said, it’s hardly a complete list. Take a look at popular hashtags to discover even more inspiring HR figures.

The impact of zero hours contracts on the workplace

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A zero-hours contract is an employment contract where there is no requirement of the employer to provide the employee any specific number of working hours. Also, the employee is not guaranteed a set number of working hours. The employee is not obligated to take any hours that he or she is offered. Therefore, the employee is only paid for the hours that they are needed for. These hours may be changed on a daily or weekly basis. Because there is no commitment for a specific number of hours to be worked, the employer is not on the hook to pay for employee benefits. The employer can still offer employee rewards if they choose, but it is at their discretion.

Since a person on a zero-hours contract has no set schedule, they have no idea when they will work next. This fact makes employee engagement very low, since it is hard to have a positive emotional attachment to a job that you are not working at for days or even a week at a time.

Zero-hours contracts have some similarities to small-hours contracts, where an employee is promised a small amount of hours, with the hope of getting more if they are offered. However, they differ in the sense that the latter guarantee a minimum amount of hours that the employee will receive.

While there is no hard data that can connect the rise in zero-hours contracts with the rise in unemployment rates, the two may be linked. There are also those who would argue that zero-hours contracts have benefited employees during the downturn in the economy. This is because it has enabled many otherwise unemployed people to remain employed, thus avoiding being out of work for an extended period of time.

Employee relations and rights

Zero-hours contracts have also had their impact felt in workplaces throughout the country. One of the biggest concerns is in the area of employee relations and rights. In certain companies, a management tool that is commonly referred to as ‘zeroing-down’ is used as a way to intimidate employees. This is when employees become afraid to complain about various problems in the workplace, such as unsafe working conditions or unfair treatment, because that are worried that their hours will be reduced if they speak up. This problem is only heightened by the fact that a large number of the employees on zero-hours contracts are earning low wages. Thus, they feel powerless to begin with.

Quality of service

Zero-hours contracts has also had a direct impact on morale and staff turnover at many workplaces. These factors make it hard for a business to maintain a staff that is well-trained and high quality. This is an especially large concern in social care sectors where it is essential to have employees that meet a very high standard.

Tax credits

The interaction between the tax credit system and variable hours of work can be a major source of concern for many employees on zero-hours contracts. Since April 2012, a person needs to work a minimum of 16 hours per week to qualify for a Working Tax Credit. WTC eligibility is based on the person’s regular working hours. These are calculated based on how much the person ‘regularly, usually or typically’ works. However, this system presents problems, as it does not allow hours to be averaged out over a period of time. Therefore, coming up with an accurate estimate can prove difficult.

Sources:
http://www.newstatesman.com/politics/2013/06/forward-march-zero-hours-contracts-must-be-halted
http://www.theguardian.com/commentisfree/2013/jul/31/zero-hours-contracts-sports-direct-desperate-lives
http://www.ft.com/cms/s/0/ff75254e-9f89-11e2-b4b6-00144feabdc0.html#axzz2dd5Et7sz
http://www.barclaysimpson.com/news/organisations-defend-zero-hours-contracts-news-801621821
http://www.davidsonchalmers.com/news/story/the-renewable-energy-market-in-scotland-582.aspx

Osborne Says “No New Taxes”

osborne and the red caseOsborne’s recent promise to make no new taxes after general election is a compelling political statement. As spending must be paid for, how Chancellor Osborne plans to pay could include taking from National Health Service, pension fringe benefits, and education, says Paul Johnson of the Institute for Fiscal Studies. The Chancellor says welfare cuts and other social services will provide enough funding to fill the “£25 bn black hole.” Social services spending cuts and higher taxes are likely to become necessary in the next five years, says IFS.

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According to IFS, millions of middle-income wage earners could face taxes of approximately £600 in order to fill the £25 bn Government finance deficit.[1]
The first to speak about “no new taxes.” At a Parliamentary Press Gallery luncheon event, Chancellor Osborne repeated that he does not need new taxes to balance the government’s books in order to accomplish “fiscal consolidation.” He repeated that the necessary financial goals will be accomplished through additional cutting of expenses. In conclusion, he called upon Labour and Liberal Democrats to declare what new taxes they propose.
Voters may imply that voting for the opposition will bring new taxes. According to IFS, it is likely that hitting middle-income wage earners with creeping tax rates that rise with inflation would bring new revenues without a formal tax increase. This stealthy form of tax increase would ultimately cause people to reduce the amount they spend on goods and services.Top UK economists say the government would need to raise £10 bn from new taxes: identifying new or deeper spending cuts on top of an already £11.5 n of cuts prompts people to ask about the inevitability of some form of increased taxation.

Knocking down the ring-fence? The IFS’s Johnson says that Chancellor Osborne is likely to remove current protection from education, the National Health Service, and pensions. Pension fringe benefits currently include free bus fares and winter season fuel allowance for senior citizens. These fringes help to protect the retirees’ spending power relative to inflation. Other items currently protected by the ring-fence include the overseas aid budget (about £11.3 bn). Many citizens might prefer Osborne’s taking funds from foreign aid or freezing current spending levels of NHS before accessing social services programmes.

Filling the black hole. Decreasing the deficit is important, and Chancellor Osborne must keep the deficit from growing. Labour will challenge the Tories to share the proposal of how the goal of filling the black hole without “no new taxes” is to be accomplished.
Mr. Osborne’s early statement is an obvious attempt to distinguish the Tories from Labour and Liberal Demoncrats. These parties have not discussed their platforms’ position about new taxes after the 2015 General Election.