The Pensions Act 2008 places auto-enrolment duties on all employers in respect of certain types of worker. The Act defines a worker as an individual who works under a contract of employment or any other contract to perform work or services personally for another party where that other party is not a client or customer of a profession or business undertaking carried on by the individual. The extent of the employer's duties depends on the category into which a worker falls, which is determined by the worker's age and earnings.
| Category of worker |
Description of worker |
Eligible jobholders |
A worker is an eligible jobholder if he or she:
- is aged between 22 and below state pension age;
- has qualifying earnings1 of more than the earnings trigger for automatic enrolment2; and
- is contracted to work in the UK.
|
Non-eligible jobholders |
A worker is a non-eligible jobholder if he or she:
- is aged 16 to 21 and has qualifying earnings1 of more than the earnings trigger for automatic enrolment2;
- is aged state pension age to 74 and has qualifying earnings1 of more than the earnings trigger for automatic enrolment2; or
- is aged 16 to 74 and has qualifying earnings1 at or below the earnings trigger for automatic enrolment2,
and is contracted to work in the UK.
|
Entitled worker |
A worker is an entitled worker if he or she:
- is aged 16 to 74;
- does not have qualifying earnings1; and
- is contracted to work in the UK.
|
1To have qualifying earnings a person must earn more than the lower earnings level of £5,668.
2The earnings trigger for automatic enrolment is £9,440, which is the income tax threshold for 2013/14.
The category of worker determines the duties that are placed on the employer:
- Employers are required to auto-enrol eligible jobholders into a qualifying workplace pension scheme and provide them with certain information.
- Employers are required to provide non-eligible jobholders with certain information about opting-in to a qualifying workplace pension scheme. If a non-eligible jobholder opts in, the employer has the same duties in relation to the jobholder as it has in relation to eligible jobholders.
- Employers are required to provide entitled workers with information about joining a pension scheme that satisfies the requirements of s.9(7) of the Pensions Act 2008, and arrange membership of the scheme for them if they choose to join.
The XpertHR FAQs section provides answers to frequently asked questions on auto-enrolment:
Related quick reference items
Pensions auto-enrolment - staging dates |
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