The decision to employ staff can be a significant step for a business owner. Not only does it signify growth for the company, but it also allows for delegation, taking at least some pressure off. However, employment also brings with it a lot more responsibility. As an employer, you have to be aware of various legal obligations, financial obligations and rules.
Hiring
Employing staff begins with the recruitment process, and this in itself involves specific considerations. For example, what type of contracts will you be offering- permanent, temporary, part-time or free-lance? All of these options have their own legal obligations that have to be met by the employer.
It’s also worth noting that the employer must actively avoid any sort of discrimination when advertising their position, choosing applicants and interviewing. There are strict anti-discrimination laws in place to stop this from happening, and if an applicant believes that an employer has violated any of these laws, then they can take them to a tribunal.
Legalities
There are certain legal checks that an employer has to make before hiring a potential applicant. The employer is required to check if the applicant is legally allowed to work in the UK and that they have a valid National Insurance number.
There are specific jobs that require a standard or enhanced DBS check prior to employment. These tend to be positions which involves working with children or vulnerable adults, for example, teaching, social work, hospitals etc. It’s the employer’s responsibility to carry out these checks if necessary.
Anyone who employs staff is also legally obliged to have Employers’ Liability Insurance and refusal to do this will lead to hefty fines.
Employment
Once the successful applicant is chosen, the employer has two months from the employee’s start date in order to provide a contract of employment and a written statement of employment. Both of these will include the rights and obligations of both parties. Contracts can vary according to what is agreed upon. However, an employee cannot receive fewer rights than they already have under law.
Although employers have two months in order to provide both a contract and a written statement of employment, it makes sense to work on these before the deadline looms. You could even create a standard version of both prior to hiring an employee and then tailor the contract when you have to.
The employer will also have to register with HMRC within four weeks of their employee beginning work. This means the employer will then be responsible for both paying their employees salary and for deducting the relevant tax and national insurance payments.
Rights
As an employee, it can be easy to take specific aspects of employment for granted, for example, statutory rights. However, business owners have to be acutely aware of these rights and ensure they are being withheld when necessary. Just some examples of these rights include working hours, breaks, the condition of the workplace, minimum wage, sick pay, holidays etc. It’s also worth noting that some employers will also have to set up a pension scheme for any members of staff who are eligible.
Pay
One of the more daunting tasks for first-time employers is setting up the payroll for staff. The overall process can be quite complex and includes installing specialised software, calculating and deducting relevant tax and national insurance and continually informing HMRC of any changes. The employer must also keep up to date employee records.
Although many business owners will set up and run the payroll themselves, some choose to outsource this task to an accountant. Accountants have the expertise and experience necessary to ensure this aspect of the business runs smoothly. It’s also worth noting that the employer can choose how involved they would like to be, choosing to outsource a single aspect of the process or the whole thing- it’s completely up to them.
