More and more businesses are postponing their auto-enrolment state date, according to the law firm Hugh James.
They found that 4,590 businesses of the 10,817 that have had to auto-enrol their staff have so far opted to postpone.
Auto-enrolment is being introduced in incremental stages, or staging dates, depending on a company’s size. Companies larger than 250 members have already had to register, whilst companies with 50 to 249 members have until 1 April 2015 to complete enrolment.
This latter stage, referred to as the SME stage, is likely to show a greater proportion of businesses relying on delaying auto-enrolment. This is due to smaller businesses looking to offset the cost of enrolling their employees for as long as possible, or to coincide auto-enrolment starting dates with the payroll calendar to lighten the administrative burden.
Current rules allow businesses to postpone auto-enrolment for up to three months. According to Hugh James, the intention to postpone is due to SMEs finding themselves unprepared for the changes.
Louise Price, partner at Hugh James, said: “Auto-enrolment has been on the horizon for years, but it has still managed to catch even large businesses unprepared simply because there is so much to do to be ready.
“We anticipate much heavier reliance on postponement from the SMEs that are about to reach the deadline to start auto-enrolment. These businesses do not tend to have large teams of HR and payroll staff, so preparing for auto-enrolment tends to be taken on by an executive with lots of other responsibilities to juggle.
“A lot of the small businesses we have talked to are unaware of how demanding preparing for auto-enrolment can be. It can eat up valuable management time and there is a lot of administrative work involved.”