Your business is growing and the future’s looking good. To help with the extra work and make sure that growth continues, you decide to employ one or two members of staff. But before you do, there are a number of things you have to think about first:
#1 Work out how much you’re going to pay them
Before you do anything, you should work out how much you’re going to pay your new staff members. We briefly covered how to do this in our tips on finding and keeping the right employees.
But don’t forget that you’ll need to make sure you’re paying them at least the National Minimum Wage (and National Living Wage for staff members over 25):
|April 2018 (current)||April 2019|
|25 and over||£7.83 an hour||£8.21 an hour|
|21 to 24||£7.38 an hour||£7.70 an hour|
|18 to 20||£5.90 an hour||£6.15 an hour|
|Under 18||£4.20 an hour||£4.35 an hour|
|Apprentice||£3.70 an hour||£3.90 an hour|
The rates change every April for the new financial year, so make sure you keep up-to-date with the latest changes when they’re announced in the Budget.
If you don’t pay at least the National Minimum Wage (and National Living Wage for those over 25), HMRC may take you to court to demand you pay the worker what they’re owed.
#2 Take out employer’s liability insurance
Employer’s liability insurance protects you against compensation costs that might come about if your staff become ill or injured as a result of their work for you.
You must have employer’s insurance by law – if you don’t, you could be fined £2,500 for every day you’re not properly insured.
Another thing to bear in mind is that you can be fined £1,000 if you don’t display your insurance certificate or if you refuse to show it to inspectors when they ask for it.
Your policy must:
- cover you for at least £5 million
- come from an authorised insurer
An authorised insurer will be in the Financial Conduct Authority’s register – so make sure you check before you sign-up to anything.
#3 Check your staff can legally work in the UK
You must check that someone who’s applied for a job at your company is legally entitled to work in the UK before you actually employ them. If you don’t, you could face a civil penalty which could land your business with a heavy fine.
If you’re going to check their documents in person, make sure you:
- see the originals and not just copies
- check that the documents are valid and haven’t expired or been altered
- check that the photos of the applicant match what they look like
- check that the applicant has permission to do the job they’ve applied for
- make copies of the documents for your records, recording the date you made the check
#4 Work out if you need to do a DBS check
For some jobs, you should run a DBS (Disclosure and Barring Service) check on your staff before you employ them – formerly called a CRB check.
You’ll usually only need to do a DBS check if the job applicant will be working with vulnerable people like children.
There are different types of DBS checks:
- Basic check – shows conditional cautions and unspent convictions
- Standard check – shows cautions, reprimands, formal warnings, and spent and unspent convictions
- Enhanced check – shows everything in the standard check plus information held by the local police which may be relevant
- Enhanced check with barred lists – shows everything in an enhanced check plus whether or not the applicant is on a barred list
One of the key things to remember about running DBS checks is that you’re required by law to treat applicants with a criminal record fairly. You shouldn’t automatically discriminate against them because of their convictions.
As such, you’re legally required to have a policy on employing ex-offenders. The Government have created a sample of what such a policy would look like.
You can find out how to run a check on an applicant here.
#5 Send the details of the job to them
If you’re employing someone for more than a month, you must provide them with a written statement of employment.
You must send this to the employee within two months of their start date.
The details must include:
- the name of your business
- your employee’s name, job title and start date
- how much you’re going to pay them
- how often they will be paid
- their expected hours of work
- what holiday entitlement they have
- where they’ll be working and whether or not they might have to relocate
You can find full details of what you need to include – and what you don’t need to include – on the Government’s website.
#6 Find out if you need to enrol them in a workplace pension scheme
Another important thing to check is whether or not you’ll have to automatically enrol your new staff members in a workplace pension scheme.
With a workplace pension, a percentage of your employee’s pay is put into the pension. And you can choose to make a small top-up to their contribution too.
You must enrol and make contributions for staff members who:
- are aged between 22 and the state pension age (use this calculator to check)
- get paid £10,000 or more a year
- normally work in the UK (including people who travel abroad for work but are based in the UK)
* Please don’t just rely on us for legal advice – we’re not solicitors! If you’re considering employing staff and you’re unsure about the legal situation, make sure you get advice from your solicitor.