There’s a lot to think about when making your first hire; what will their role entail, how much do you think you should pay them, and more. But there are a handful of important considerations that are often overlooked by first time employers.
In this article we take a look at the 8 most important things you need to do before hiring your first employee, from establishing their rights, to making sure you’re fully covered in case something goes awry, ticking off each of these steps will help you to set your business up for success.
1. Conduct Applicant Background Checks
Before making your first hire, it’s important that you check to make sure any applicants you’re considering hiring have the right to work in the UK. To find out how to do this, visit the government’s ‘Right to Work’ page, which outlines a step by step guide to help you assess your applicants’ work status.
Another important check you may need to carry out is a DBS check (formerly known as a CRB check). You’ll need to make sure that the applicant has a valid DBS certificate if the role they will be taking on involves working with vulnerable people, children or security.
2. Employment Contract and Statement of Employment
An employment contract is an extremely important part of ensuring that both you and your employee know your rights, responsibilities and the terms and conditions of work. This contract should outline key information about the role, such as the job description, working hours, salary and start date. Make sure you keep a signed copy of any employees’ employment contracts so that you have access to the information whenever it’s needed.
If you’re hiring someone to work for you for more than 1 month, a statement of employment must be provided during their first 2 months of working. This document should include the main conditions of the employee’s terms of employment. More information about a statement of employment can be found on the government’s website here.
3. Employers’ Liability Insurance
Making sure you’re fully covered before taking on your first employee is vital. As soon as you become an employer, you will be required by law to obtain Employers’ Liability (EL) cover. Your policy must be obtained from an authorised insurer and must cover at least £5 million. Being fully covered will ensure that if for any reason your employee becomes ill or injured as a result of the work they do for you, you should receive help paying for any compensation they request.
4. Register as an Employer
In the majority of circumstances when you make your first hire, you must officially register as an employer with HMRC. The only instances where this would not be necessary are: if your employee is paid £118 or less a week, if they don’t get expenses or benefits or they have no other job or a pension. Before your employees first payday you must register as an employer with HMRC, to do this follow their instructions here. You’ll still need to register as an employer even if it’s only yourself you’re employing. More information and instructions of how to do this if you’re a limited company can be found on HMRC’s official website.
5. Set up a Payroll System
To pay your staff, even if you only have one employee, you’ll need to set up an effective payroll system. If you’re paying people by PAYE you have to submit payment summaries digitally to HMRC. This is where Payroll software comes in handy. There are a huge range of options you can choose from such as Xero, Quickbooks and more. These will allow you to send your payment summaries to HMRC as well as calculating deductions, working out how much you need to pay each employee and what you need to contribute in terms of national insurance, workplace pensions, etc. There are also free options you could use such as HMRC’s own product Basic PAYE Tools, as well as a range of other free payroll software options.
6. Familiarise yourself with Pension Auto-Enrolment
One important thing to bear in mind when making your first recruit is the auto-enrolment of workplace pensions. It’s now a legal requirement to auto-enrol any employees into a workplace pension scheme and to offer them the option of opting out. This legal duty even applies if you only have one employee, so it’s wise to make sure you know your exact responsibilities with regards to workplace pensions. There are certain scenarios in which some employees may not be eligible for auto-enrolment, these include the worker’s age, wage and contract and can be found on the Pensions Advisory Service website.
7. Establish your Employee’s Rights
All employees in the UK have rights and it’s crucial that both you and your employee know what they are and what responsibilities come with them. The Equal Opportunities Commission has an updated list of all employee statutory rights in the UK here or alternatively, the government’s page on worker’s rights is also a useful source.
8. Make Health and Safety Considerations
As a company with less than 5 employees, you will not be required to have a written Health and Safety policy. However, this does not mean that you should disregard Health and Safety regulations that may apply to your workplace. Now that you have an employee, you’re responsible for ensuring their safety, so it’d be wise to conduct a thorough risk assessment of the workplace and address any areas which may pose a risk to your current and future employees.
We hope this article has helped you to make sure you’re aware of the steps you need to take before employing your first recruit, and wish you the best of luck with your business’ future!
