Considerations When Employing Staff
When starting your own business, it is likely that at some point your attention will turn to hiring staff. If this is your first time, the process can seem rather daunting. To help you get a better picture of what you will need to do when hiring employees for the first time, as well as enable you to avoid any unnecessary stress and mistakes that could cost your business time and money, we have put together some useful tips.
Whether you are looking to hire just a single employee or employ a wider team, there are steps you must take to ensure that you follow government employment guidelines so that your employees and your business are protected by law.
Make Sure You Can Afford Employees
You will likely be excited at the prospect of hiring your first employee – it being a clear indication of the growth and therefore success of your business. However, before jumping in, you must ensure that you are ready financially to take on this commitment, and that by doing so you are not instead putting your business’ financial stability at risk. Remember, as a business owner you are legally responsible to ensure your employees are paid on time, for the work they done, and at a rate that is at least the National Minimum Wage. Whilst this can vary depending on age (over 21’s must be paid the minimum wage) and the type of role (such as an apprentice), you must ensure you are paying employees the minimum legal wage, regardless of the size of your business.
Perform Employee Background Checks
Depending on the type of industry you are operating in, you will likely have to perform a background check on any prospective employee. Firstly, you will have to ensure that your new employee is legally allowed to work in the UK – this being applicable for all types of work. Next, there may be certain requirements for specific jobs, such as the need for eye tests for commercial drivers, as well as health checks for those working in challenging environments. Furthermore, for fields of work such as security, teaching and care work, you will be required to conduct a more detailed background check on any prospective employee. It should be noted that such checks can take approximately 8-weeks to be completed, and therefore you must take this into account when making your plans to hire someone.
Get Employee Insurance
As the owner of your business, you will be required to take out employer’s liability insurance as soon as you have even just one employee. The law states that such policies need to cover your business for up to £5 million, and that the policy is taken out with an authorised insurance company. Employee liability insurance is designed to protect you and your employees, as well as provide adequate compensation should they become sick or injured during their work duties. The government takes employee insurance very seriously and can impose a heavy fine if you fail to take out sufficient coverage for your employees.
Create a Statement of Employment
If you are intending to employ a new staff member for longer than 4-weeks, you are required by law to provide them with a ‘Statement of Employment’. This is a formal document spelling out various important details about the job – including a complete breakdown of the expected duties to be undertaken, the salary they will be paid, details of any bonuses and overtime, when the employee is expected to start work, the location where they will be working and any other important information, such as whether there is an initial trial period or not. It is recommended that employees are provided with both electronic and hard copies of this document as soon as they become an employee.
Remember to Register as an Employer
If you are intending to hire staff, you must first inform HM Revenue and Customs (HMRC) before doing so. Registration is available online and can take up to two-weeks to be finalised. Furthermore, you must register as an employee at least four-weeks before you first pay your new employee. It is therefore important to take such timescales into account when looking to hire employees for the first time as failure to do so may lead to delays in your application being processed and even fines.
It is now the law in the UK for all employers to provide employees with a workplace pension scheme. Regardless of the size of your company – even if you only have one employee – you are now lawfully required to ensure you have a workplace pension in place for your employees. Whilst there are certain requirements to be eligible for such a pension, surrounding areas such as age and annual salary, it is highly likely that you will need an adequate pension scheme in place. Failure to do so can lead to heavy fines.
As you can see, there are various factors that you must consider when looking to hire employees for the first time. Whilst becoming an employer is a big responsibility, it is also hugely rewarding. By providing employees with effective insurance, a safe working environment and a fair salary, you will be improving the lives of your new employees and helping to create a business that people want to work for – an important ingredient for a successful business. We hope this brief overview has been of use and that you now have a clearer picture of what you need to do once you are ready to begin hiring staff. Good luck!