It has not been a good month for small business. For 16 years, firms across the UK have been following regulations in good faith, only to be told last week that they should have been including overtime in holiday pay.
The impact of this decision should not be underestimated – it almost certainly will force some companies out of business if employees are allowed to claw back 16 years’ worth of payments.
I am afraid I have to be the bearer of more bad news – there is another potential pitfall for small firms just around the corner.
Businesses with between 50 and 249 employees have until April to get all their employees enrolled into a pension scheme.
To date, the UK Government has been nice about the roll-out of the scheme, but it is beginning to show its teeth.
Its regulator has for the first time used its powers and served three firms with fixed penalties in respect of compliance failings.
Furthermore, during its most recent round of case reviews between July and September 2014, it issued 163 compliance notices to employers to remedy one or more auto-enrolment contraventions. That compares with just 14 issued for the period October 2012-July 2014.
Compliance notices aim to give employers a wake-up call that they need to provide the pensions their employees are due. Fixed penalties follow where employers fail to act upon these notices and escalating daily penalty notices is an additional power available to the regulator.
With the number of employers due to reach their staging date increasing significantly over the coming months, the number of breaches will almost certainly rise.
The Pensions Regulator itself has said that they expect to see an increase in the number of times where they need to use their powers. This expectation is because many small to medium-sized employers will either leave their preparations to the last minute, don’t know when they need to comply or don’t even know that the law applies to them. The regulator has made it clear that this type of non-compliance will not be tolerated.
We would strongly endorse the regulator’s own recommendation to prepare early with the initial step being to find out when your staging date is. Auto-enrolment can represent a huge challenge for employers and Aberdein Considine can help you navigate through all of the complexities and keep you compliant.
On a personal note, I recently retired as a partner of my firm after 33 years, although I will continue as a consultant.
Perhaps I can pass on one or two thoughts?
Firstly, to other business people in senior positions contemplating retirement and the passing on of responsibilities – I would urge early planning to ensure a smooth transition.
A detailed analysis of all the facets of the business to be passed is essential and will undoubtedly throw up some interesting decisions as to who the recipients might be. Working with those who will take forward the business is a process which certainly needs months, if not years.
In my own case, I am very fortunate that the firm’s co-founder and fellow senior partner, Iain Considine remains with the business to guide our new Managing Partner and management committee.
Secondly, what will I miss and what will I not miss?
I will definitely miss my clients and my colleagues.
If I had to describe both in one word it would be “loyal”. From the earliest of days, we have been blessed with clients who have stayed with us throughout the years and entrusted us with their various legal, financial and property needs. It has been immensely satisfying to see so many of them grow with the firm.
I frequently told my various teams they were the best in the business – and I meant it. We have clubs for staff who have been with us for 10, 15, 25 and even 30 years. Entry is marked by an increase in staff benefits and what is usually a lively social event. They thoroughly deserve it and I know my partners deeply appreciate the commitment and loyalty of each and every one of them.
What I won’t miss is the dear old Law Society. I will tell you why next time . . .