The Government is committed to helping people achieve financial security in later life and is reforming the pension system as part of its efforts to encourage a culture of saving. Automatic enrolment was introduced to enable most people in work to save for later life. It has been a great success to date with over 6.8 million eligible workers enrolled by more than 290,000 employers since it began in 2012 and it is important we recognise the contribution employers have made to this achievement.

Automatic enrolment is currently being extended to small and micro employers. While the self-employed are not eligible for automatic enrolment, they will have legal duties to enrol any eligible workers in their employ. The Government understands that these employers may find complying with automatic enrolment challenging and we are doing all we can to make automatic enrolment as straightforward as possible for this group. The Department and The Pensions Regulator (TPR) are focussed on making compliance with automatic enrolment duties as clear as possible, as well as simplifying the language regarding automatic enrolment.

As part of this work, TPR has launched an interactive “Step by Step” guide on their website. This simplified guide to meeting AE duties is designed to meet the specific needs of employers who may not have pensions experience, including those with just one or two staff. The guide includes a duties checker so that employers can easily find out what they will need to do to comply and when. Using the duties checker also means employers will receive tailored communications relevant to their circumstances.

What an employer pays and the amount of time they spend on setting up automatic enrolment will depend on various factors, including how they use business advisers, how they run their payroll and which pension scheme they choose.

From research it has conducted, TPR estimates that small employers with between one and four staff members usually spend a total of about 10 hours overall carrying out all their automatic enrolment tasks, over a 12 month period before their staging date. This research has also shown that average costs associated with outsourced payroll are less than £200 while average pension scheme set up costs are under £500.

Automatic enrolment is a legal duty for employers, just like paying the National Living Wage, tax and National Insurance. There are no plans to reimburse employers for time or costs should their employees choose to opt-out. However, less than one in ten people are choosing to opt-out which is much lower than originally estimated. We have also seen around 5% of people not eligible for automatic enrolment choosing to opt-in to their employer’s pension scheme.

In the Social Security Tribunal decision that gives rise to this question, the judge made clear that there are two parts to the test of whether an individual is self-employed. The first part is whether the activity can be counted as self-employment. The second part is to establish whether or not the work is “genuine and effective”. This test takes into account factors such as the period of the employment, the number of hours worked, the level of remuneration, and whether the work was regular or erratic.

The Government believe this test provides sufficient safeguards and that an additional test related to the payment of national insurance contributions is unnecessary.

A self-employed person who is also an employer has the same duties to their employees as employers who are not self-employed. An employer has a general duty to ensure, so far as is reasonably practicable, the health, safety and welfare at work of all his employees under Section 2 (1) of the Health and Safety at Work etc Act 1974 (HSWA). Regulations made under HSWA will also apply and further details can be found at www.hse.gov.uk/legislation.

There are some exceptions within the regulations for employers with less than five employees. These include the requirement to record risk assessment findings under the Management of Health and Safety at Work Regulations 1999, and the requirement to have a written health and safety policy.

Further information for small businesses can be found at: http://www.hse.gov.uk/simple-health-safety.

The general health and safety requirement on self-employed workers is contained in Section 3(2) of the Health and Safety at Work etc Act 1974 (HSWA) which states:

“It shall be the duty of every self-employed person to conduct his undertaking in such a way as to ensure, so far as is reasonably practicable, that he and other persons (not being his employees) who may be affected thereby are not thereby exposed to risks to their health and safety”.

Section 53 of HSWA gives a broad definition of a self-employed person as, “an individual who works for gain or reward, otherwise than under a contract of employment, whether or not he himself employs others”. In this context, HSE has consulted on proposals to exempt from health and safety law those self-employed whose work activities pose no potential risk of harm to others as recommended by Professor Ragnar Löfstedt in his 2011 report Reclaiming Health and Safety for All: An Independent Review of Health and Safety Legislation. The 12-week consultation finished on 28 October 2012 and the results are currently being analysed.

The Health and Safety Executive (HSE) would not normally have contact

with self-employed workers in low risk occupations. In higher risk occupations, where there is the potential to harm others, HSE has no robust evidence of an overall difference in health and safety compliance between self-employed and employed workers. Under the proposals, which are currently the subject of consultation, self-employed workers in the latter category will continue to be subject to the Health and Safety at Work etc. Act 1974 and related legislative requirements.

The general health and safety requirement on self-employed workers is contained in Section 3(2) of the Health and Safety at Work etc. Act 1974 (HSWA) which states:

“It shall be the duty of every self-employed person to conduct his undertaking in such a way as to ensure, so far as is reasonably practicable, that he and other persons (not being his employees) who may be affected thereby are not thereby exposed to risks to their health and safety”.

Section 53 of HSWA gives a broad definition of a self-employed person as “an individual who works for gain or reward, otherwise than under a contract of employment, whether or not he himself employs others”.

In addition, there are over 50 sets of health and safety regulations that apply to the self-employed, either explicitly referring to self-employment or contained within a broader category of “person.” Further details may be found at www.hse.gov.uk/legislation .

Self-employed Romanian and Bulgarian nationals who no longer have the right to reside as a self-employed person and are unemployed are not eligible for housing benefit or any other income-related benefits.