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Auto-enrolment and Employment Updates

September 2012
Forthcoming changes to employment legislation

National Minimum Wage

On 1 October 2012, the main rate for the National Minimum Wage increases from £6.08 to £6.19 per hour. The ‘youth development’ rate for workers aged 18 to 20 and rate for workers aged 16 and 17 stay the same at £4.98 and £3.68 per hour respectively.

Pensions – Auto-enrolment

New pension obligations, commonly known as 'auto-enrolment', are also coming into effect on a phased basis from 1 October 2012, initially for the largest employers with 120,000 or more employees. Small and medium sized employers will follow over the next six years.

Under auto-enrolment, employers will have to auto-enroll eligible employees, and make mandatory employer contributions, into a qualifying workplace pension scheme. From their staging date, employers must auto-enroll eligible employees into a pension scheme when they reach the income tax threshold but contributions will kick in only from the employee threshold for national insurance contributions.

Employers will be able to operate a three-month postponement window for all employees (i.e. newly eligible existing employees and new employees), so that employees on short-term contracts do not need to be auto-enrolled in a pension scheme, although they will be able to opt in voluntarily during the postponement period.

In order to find out their staging date, an employer needs to know:

• how many people are in the employer’s PAYE scheme

• the employer’s PAYE reference.

Further information and auto-enrolment staging dates can be found on the Department of Work and Pension website at:


The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.

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