When financial problems occur, it feels as if disaster has struck. In many cases it really has, as plenty of people feel driven to rack up unpayable debts and harm their credit score in the process. It’s a spiral of misery, and employers can’t afford to look the other way.
However, aside from a few standard legal obligations, employers aren’t required to step in and lend a hand. Of course, from a moral and ethical standpoint, things may feel rather different.
It’s worth asking the question; who’s legally responsible for an employee’s financial wellbeing?
The employer must maintain keen oversight of their business, ensuring that all the correct processes are followed when it comes to paying workers on time and enrolling them on efficient pension schemes. These issues come with a great deal of responsibility, and can’t be ignored at the convenience of the employer or business. It’s the law!
It’s also the responsibility of employers to keep on top of all the legal changes that occur with pensions. For example, it was only two years ago that the qualifying age for enrolment in a workplace pensions schemes was cut, meaning that 18-21 year olds are now automatically enrolled to help them save for retirement.
Employers need to stay on top of these big changes, so that they can adapt their business in accordance with the law to better support their workers.
The role of accounts
Of course, one could argue that employers don’t usually make salary and pension payments themselves. This role usually falls to accounting staff, who perform the processes that ensure everyone is financially looked after. To a major degree, they are responsible for ensuring employees receive their pay on time and in full.
In the event of fraudulent activity, those responsible would certainly face firings and even prosecution, depending on the nature of their offence.
The employer would face their fair share of finger-pointing, for not checking their staff's competence and activities. The business itself could be liable for legal action too, depending on what transgressions took place.
However, as long as the business and its staff stay within the law, and make all due payments on time, they are not responsible for their employees' financial status outside work.
Going above and beyond
Perhaps it’s wrong to suggest a business bears any responsibility for their employees' financial wellbeing.
All the same, when employers go above the bare minimum of what’s required of them, employees will appreciate the help and feel a sense of gratitude and loyalty. Productivity improves and staff turnover goes down when employees feel as though their employers are there for them in times of additional need.
Employers can provide extra support for employees by providing a wage advance scheme, enabling employees to get an advance on their monthly wages if needed. This can help them avoid turning to 'payday' loans in emergency situations, which can lead to high charges and further debt.
There’s no one person who’s responsible for the entirety of an employee’s financial wellbeing. As with so many things in life, it’s a team effort.
Although all businesses must stick to their legal responsibilities around pay and pensions, a diligent workplace can take things a step further, and provide additional support to show that they value and care about their employees.
Copyright © 2019 Article was made possible by site supporter Victoria Harrison.