Taking on employees for the first time is exciting for your business and possibly a bit daunting. If you’re reading this before employing the first person you’re in a great position to make choices about how you employ and put the right foundations in place.
Start by thinking about whether you need someone full time or part time, whether you need fixed days and times or can be flexible. Are parts of the year busier than others? Is the work available only for a temporary or fixed period? Consider carefully and only employ someone for what you really need. It can be easy to fall into the trap of viewing employment as full time, 5 days a week and permanent - it doesn’t need to be.
Consider if employing someone is even the best route, a casual worker who is paid PAYE but you only call on as and when you need them might be more appropriate. Alternatively outsourcing, if it is a specific skill for a specific project it may be better to use someone who works on a self-employed basis or find a company that does the work. It’s important to understand employment status and how this impacts not only the way you pay them but also the rights they have and the degree of control you have. Read our article on Employment Status for more information.
All employees and workers must be issued with a statement of particulars by the end of their first day of employment. It’s not only best practice but also protects your business to issue this prior to them starting work.
A statement of particulars contains the information you are required under the Employment Rights Act to provide to employees and workers. It is not in itself an employment contract but does contain key terms. We recommend you issue full written terms and conditions which goes beyond the statement of particulars and include clauses such as lay-off, flexibility and deductions, these clauses are there to protect the business.
Right from day 1 your new employee will have rights including, national minimum wage, statutory sick pay, paid holidays, rest breaks. Some rights even begin prior to employment in the recruitment process, be particularly mindful of individuals protection from discrimination. Other rights accrue or improve with service including rights to notice, redundancy pay, statutory family friendly leave and pay.
An employee is an investment in your business, the right person will be an asset and help your business grow. As with all investments, it’s important to be aware of the cost. Wages will be the highest of those costs, at a minimum you are required to pay the national minimum or living wage for their age. In addition you will have national insurance contributions and pension contributions you are required to make. You will also need employers liability insurance.
There are also the less obvious costs such as holiday, depending on the employees role you may need to find cover for their work during periods of holiday. You’ll also need to provide them with the equipment to do their role, any tools needed and personal protective equipment.
Other costs such as sick pay, maternity, paternity, adoption, shared parental pay may or may not become an issue but be aware of them and plan how you will pay if the need arises. Should the employee become entitlement to any statutory payments you will be required to pay them.
Health and Safety
Employers are responsible for the health and safety of their employees, workers and visitors to their premises. Ensure you are providing a safe environment, in an office this means fully adjustable chairs, monitor at the right height and appropriate keyboards, possibly wrist and feet rests. It may require supplying PPE, such as boots, hard hats, high viz jackets or gloves and aprons. Carry out a risk assessment, seek professional advice to ensure you are providing a safe environment.
Individuals may have specific needs in order to carry out their work safely, for example if they are pregnant or have a disability - you are responsible for all equipment required even if only required by one individual.
You may already be processing customer data and aware of the requirements under the General Data Protection Regulations. You must ensure you comply with data protection requirements when it comes to employee data as well as having policies and procedures in place to ensure your employees are complying if they are processing customer data.
If you’ve not already, you will need to decide how you run payroll, you can do it yourself with one of the many software options on the market or through an external provider. Whichever route you choose you must be registered with HMRC and submit real time payroll information.
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Article last updated: 1 December 2020
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