One in 20 employees are being short-changed by their employer and are not receiving the pension they are due, with low-paid, part-time workers particularly at risk of auto-enrolment non-compliance, research has found.
A report into auto-enrolment enforcement by the think tank Resolution Foundation found one in 20 of workers eligible to receive a workplace pension have either not been enrolled by their employer or are receiving contributions below the minimum level.
The report warned many may be unaware that they will be short-changed in the future as failure to abide by auto-enrolment rules does not leave workers out of pocket in terms of take-home pay today.
In addition, the think tank found part-time and temporary workers were more than twice as likely not to be in a workplace pension than their full-time and permanent counterparts, and more than one-tenth of agency workers have not been auto-enrolled.
Overall, 2.9 per cent of permanent employees were not enrolled at all, but this increased to 7.4 per cent for temporary workers and 6.6 per cent for part-time employees.
It also found non-enrolment was more prevalent in lower-paying sectors where other labour market violations such as failing to pay minimum wage were also often found. These included hospitality (6 per cent), administration (7 per cent), and personal services (5 per cent).
Among these employers, non-enrolment was more common than underpayment of contributions.
Hannah Slaughter, the report’s author urged The Pension Regulator to undertake “more proactive enforcement”.
The think tank said the regulator should focus on monitoring small businesses, contingent and low-paid workers, and sectors such as hospitality and agriculture, where non-compliance was most prevalent.
Ms Slaughter said: “Employers could clearly be given more guidance to navigate tricky areas such as volatile earnings and temporary staff, but greater scrutiny could also be directed at firms in our high-risk categories.”
In addition, TPR could work with other enforcement bodies, such as HM Revenue and Customs, to enable data-haring, she said.