Do I have to pay my cleaner a pension? It is a question that has been creeping into conversations about cleaning service more and more. Unfortunately, the answer is far from obvious, but by the end of this article it should all become clear.
If you choose DustToShine, you needn’t worry about pensions and the rest. All of our domestic cleaners are self-employed and therefore neither you or the DustToShine agency is liable. Just one less thing to worry about and peace of mind – letting you enjoy a trusted, premium and reliable cleaning service with minimal fuss.
If you employ your own domestic cleaner, here’s some handy (and somewhat startling) information on whether or not you should be paying into your employee’s pension.
Recent developments in the cleaning company industry have seen many families faced with hefty £400 fines in light of a new pension scheme. These new rules put forward by David Camerons governing parliament will see domestic cleaning service costs rise to as much as £600 a year, with many unwitting people who employ cleaners and carers now classed as small businesses or ‘micro employers’. You will now be required to pay a price of one per cent, rising to three percent by 2018.
Few people know this, but believe it or not, this auto-enrolment system has been in place since October 2012. At first it affected the biggest firms before eventually trickling down and landing on the desks of small companies and these so-called ‘micro employers’. Every firm is obligated to enrol their staff by April 2017, while businesses set up after 2012 have until February 2018.
The news has come as quite a shock to many people across the UK who were simply not aware of the legislation until they were faced with a letter highlighting their lack of cooperation. This hasn’t just affected big business types, it’s also landed on the doorstep of many elderly and disabled citizens who have relied on the services of cleaners and carers for years.
However, the scheme is not indicative of every domestic cleaner. Workers have to meet certain criteria before they are automatically enrolled. One necessity is that they have to be between 22 years old and state pension age. Another is that your cleaner has to earn above the tax-free personal allowance. As of this year that is £192 a week. The option is there for those who earn less to join the controversial pension plan, but at the time of writing, they are not automatically enrolled.
As mentioned above the good news is that with DustToShine all our cleaners are self-employed and so the legislation does not affect any of our clients. For those who pay the cleaners fee direct to the agency the agency is responsible for the cleaners pay and pension obligations.
If you simply found your cleaner through an agency service and now pay them directly, it is in your hands to make the contributions
As mentioned above, employers who fail to pay into this pension scheme can face fines of £400, plus a further £50 a day if they don’t cooperate. Sean McSweeney from Chase de Vere has some sage advice for all those who are unwilling to accept the new rule. He said: “Employers have no choice but to assess workers, provide statutory communications and auto-enrol them if they meet the criteria. Alternative arrangements (such as paying extra salary in lieu of a pension contribution) is a total no-no and could end up in significant fines or worse. Encouraging an employee to ‘opt out’ could even end up with a criminal conviction and jail for the employer.”
For those who are willing to comply, they have a staggering 33 responsibilities that must be adhered to, ranging from nominating a contact who deals with the regulatory, to enrolling cleaners and storing auto-enrolment records for five years. For ‘micro employers’ the process becomes even harder, especially when the time comes to find a suitable pension provider. There are very few insurers with the means capable of supporting employers with just one or two workers. Standard Life and Nest are just two of the companies willing to help small businesses with auto-enrolment.
If all of this sounds a nuisance, your best bet is to stick with a cleaning agency as trusted as ours. Not only do DustToShine ensure you won’t have to worry about the latest pension scheme, we also guarantee you won’t find a better cleaner in London.
Whether you need a cleaner in North London, West London or a domestic cleaner in South London, the docklands in East London, DustToShine cover the whole of London.
Avoid the hassle and try our dedicated domestic service on 020 3322 8958.