Employing staff for the first time is a crucial milestone for any business, as it opens up new opportunities for growth and expansion. However, it is also a process that requires careful preparation and attention to detail, as there are several steps that need to be taken to ensure compliance with legal requirements.
Determine Pay: The first step is to determine the pay that you will offer to your employees. This must be at least equal to the National Minimum Wage, which varies by age and is subject to change. You can use a calculator on the GOV.UK website to determine the correct wage and check if you owe any back payments.
Right to Work: Before hiring, you must verify that the candidate has the legal right to work in the UK. The required documents will vary based on the candidate’s nationality, and the recruiting and hiring service tool on GOV.UK can help you determine what you need to ask for.
DBS Check: Depending on the role, you may need to conduct a disclosure and barring service (DBS) check, formerly known as a criminal records bureau check. This check is compulsory for certain jobs and can reveal unspent criminal convictions, cautions, or a history of being barred from a particular role. You can request a basic, standard, enhanced, or enhanced with barred lists check, and you can check if the candidate has signed up for the DBS update service to determine if their certificate is up to date.
Employment Insurance: As soon as you become an employer, you must have employers’ liability insurance, which must cover you for at least £5 million. This insurance will help pay compensation if an employee is injured or becomes ill due to work. However, you may not need to take out a policy if you only employ family members or those based abroad.
Job Details: You must provide your employee with details of the job, including contract terms and conditions. These can be in a written contract, offer letter, or in collective agreements with trade unions or staff associations. If the employee is working for over a month, you must also provide a written statement of employment, including information on pensions, disciplinary procedures, and more.
Register with HMRC: You must register as an employer with HMRC before the first payday, even if you are only employing yourself. This will ensure that you are able to deduct the correct amount of tax and national insurance contributions from your employees’ pay.
Set Up and Manage a Workplace Pension Scheme: In the UK, it’s mandatory for employers to offer a workplace pension scheme to eligible employees. You can choose to set up a scheme yourself or use a pension provider.
To set up a scheme:
- Choose a pension provider that suits your business needs.
- Enroll eligible employees into the scheme.
- Make contributions to the scheme on behalf of your employees.
- Keep records of your contributions and communicate with your employees about their pensions.
- Manage the scheme, including keeping track of changes to legislation.
It’s important to keep up to date with the latest workplace pension rules and regulations to ensure you’re compliant. Contact us for support in administering your payroll and managing your workplace pension scheme.