Your quick guide to workplace pensions and employment contracts

By 2017 all businesses are required by law to have a workplace pension. We’ve also found that many businesses that we talk to are confused about whether to employ directly or use sub-contractors. Here are some FAQ about these subjects.

At our first Bedrock Business Breakfast, guest speakers Matthew Mitten from Enrolsme, and Jane Wheeler from Hine Legal talked to us about workplace pensions and employment contracts. Follow us on Twitter for information about our next event!


Help! What can I do to make sure I’ve got my employment contracts right?

  • Understand the difference between the types of workers that work for you
  • Make sure the paperwork reflects the reality. It’s not enough to call someone a sub-contractor in their contract, if the way the work makes them look like an employee
  • Ask if you are unsure - give us a call and we can help

How can I tell the difference between employees and self-employed workers?

In employment law a person’s employment status helps to determine:

  • their rights
  • their employer’s responsibilities
But remember: a person may have a different employment status in tax law. It can be difficult to tell if someone is an employee or self-employed, but here are some things to consider that may help:
  • Control - who has the final say about when, where and how they work?
  • Personal service - do they have to do the job themselves, or can they send a substitute?
  • Exclusivity - are they allowed to provide services to other organisations, or do they just work for you?
  • Nature and length of engagement - will they work for you for an indeterminate amount of time, or is it for a specific task?
  • Pay and Benefits - are they paid regularly for a fixed amount, or is it upon completion of a set task? Do you pay them holiday pay and sick pay?
  • Other things to consider - what is their job title; if they are self-employed does it look like your permanent employees’ titles? Do they manage a team? Are they subject to your appraisal and disciplinary policies?
Why does it matter if my workers are employees or self-employed?

  • It’s not always simple. Changing norms in working patterns nowadays means you may have a number of types of workers. As well as permanent employees, you may employ consultants, use sub-contractors for projects or have seasonal workers on zero-hours contracts
  • You could pay a tax penalty if you get it wrong - HMRC will impose financial penalties on those people claiming to be self-employed to avoid PAYE payments, but who they deem to be employees
  • Employees may be able to sue you for unfair dismissal and other claims at employment tribunal if they can show they are an employee even if you considered them to be self-employed

How do I set up my workplace pension?


  • Decide if you will run it yourself or use another organisation to manage it for you
  • Find out which of your workers are eligible to enrol - all workers aged between 22 and the State pension age, who earn more than £10,000 and work in then UK are eligible
  • Decide which pension scheme to use and how your contributions will work - check if existing pension schemes qualify as many do not!
  • Ask for help  - we can provide advice and options for the next steps

Why do I need to set up a workplace pension?

  • All organisations must have a workplace pension by 2017, if they employ at least one person
  • The responsibility lies with you as the employer, for complying
  • You will be fined by The Pensions Regulator if you don’t comply

When do I need to set up my workplace pension?

  • Find out your staging date 
  • Make a plan of key dates, communications and deadlines and do this at least 3 months before your staging date if you can

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