Huge fine for firm who ignored auto-enrolment duties
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A case where a high street footwear business turned a £400 fine into a bill for more than £40,000 after claiming it was too busy to meet its pension responsibilities, has prompted a fresh warning to employers by The Pensions Regulator (TPR) not to ignore their automatic enrolment duties.
Johnsons Shoes Company was issued with a £400 fixed penalty notice after it failed to comply with the law on the automatic enrolment of its staff into a workplace pension.
Like all companies must do, Johnsons were required to check whether its staff qualified to be put into a workplace pension scheme and to confirm to TPR that it had done so by September 2014, but failed to do so. As a result they were hit with a £400 fine.
Johnsons paid the £400 fine but still did not become compliant. Despite repeated reminders - and being warned that it would face a new fine that would increase by £2,500 per day if it did not meet its responsibilities - the business continued to ignore their duties.
The fine reached £40,000 before the company finally became compliant. At that point, Johnsons refused to pay the fine - forcing TPR to take the business to court to secure payment.
Eventually Johnsons agreed to pay the £40,000 fine and £2,000 court costs, preventing the need for a full court hearing on the matter.
Charles Counsell, TPR's Executive Director of Automatic Enrolment, said: "The failure by Johnsons to act, despite our repeated warnings, left it with a completely unnecessary bill that was more than 100 times the amount it was originally fined.
"The vast majority of employers meet their automatic enrolment responsibilities. We will use all the powers available to us against the minority who choose to ignore their duties.
"Our message is clear: fail to comply with the law and you may be fined. Fail to pay your fine and we may take you to court."
All employers have legal duties and can use the Duties Checker on TPR's website to quickly understand exactly what they must do.
Employers experiencing challenges in meeting their automatic enrolment duties should contact TPR as early as possible to discuss their situation.
For more information on your legal duties as an employer visit www.actsmart.biz/pensions
