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What to consider when employing someone for..

When small businesses grow, there will come a point when the owner can’t get everything done themselves and they consider taking on a member of staff.

Electricals Online


Showing a new worker how to operate a machine

If this applies to you, and it’s the first time you’ve ever employed anyone, there are some things to think about before you invite your employee into the business.

  • Insurance

Before you start looking at suitable candidates, you need to make sure you’re ready to employ them. As well as the other insurances your business needs, you will need to add Employer’s Liability insurance to your portfolio. This covers you if they have an accident/fall on the business premises and they decide to sue you. The minimum cover recommended is £5 million.

  • Tell the tax man

You need to register with HMRC if you’re going to employ someone; this must be done within four weeks of the employee starting work. This is because you will be deducting income tax and national insurance contributions from their wage.

  • Payroll

There are various software applications on the market that allow you to run your own payroll; however, this can be such a complicated area if you’ve never done it before. We’d therefore recommend engaging professional payroll services via your accountant or arranging an alternative third-party solution.

  • Terms and conditions

In their contract of employment, set out the employee’s responsibilities as well as the benefits they’re entitled to—such as rate of pay, holiday entitlement, pension procedure, notice period, etc. Less is not more in this case, get everything in writing so that you and your employee are clear on the terms and conditions of their employment. You can find sample contracts online, though it’s prudent to engage the services of a HR professional. Once you have a basic employment contract, you can tweak it as your business grows to cover any other roles needed within the business.

  • Where will they work from?

Small businesses, to save costs, tend to be run from the owner’s kitchen table, their spare room, garden office—or even their garage. Whilst it may be okay for you to work in any available space, it may be time to look at securing appropriate business premises when you reach the tipping point of employing others. Yes, it’s an extra cost, but it’s clear that your business is expanding if you’re ready to take on employees. Think about your workplace through their eyes—would you want to work from someone’s spare bedroom?

  • Health and Safety

Once you’ve decided on the most appropriate workplace, carry out a risk assessment on the basis of health and safety. Will your employee require a uniform or any PPE to ensure their safety when carrying out their role? As part of your responsibilities as their employer, you need to provide this.

  • Pension

It’s now law that employers must provide a workplace pension scheme (auto-enrolment), whether they have one employee or a thousand. You are required to make at least the minimum contribution of 3% (the employee’s minimum contribution is currently 5%); however, you can both contribute more than this of you so desire.

  • Documentation

When you’ve interviewed applicants and settled on the person you wish to employ, you must ask for proof of their identity and their right to work in the UK before you can employ them. If they’re going to be working with under-18s and/or vulnerable people, you need to also carry out a DBS check on their behalf, which ensures they have no relative criminal convictions.

Under data protection (GDPR) laws, you must ensure their personal information is kept secure and only use it for appropriate purposes relating to their employment.

  • Trial period

It’s unlikely that a new employee will walk into work on day one and be able to carry out the job without any supervision. Before they start working with you, plan what training them may need, and also provide an induction on their first day, which will give you the opportunity to:

  • Show them around the workplace

  • Outline their responsibilities

  • Describe the process to follow if they need help or have a problem

  • Ensure they’re aware of any health and safety responsibilities/directives

  • Tell them when they can take their breaks

  • No discrimination

One of the greatest responsibilities you have as an employer is to ensure no discrimination is ever directed towards your employee—by you, your clients and suppliers, and any other employees you may take on. This includes discrimination against female employees if they inform you that they’re pregnant; discrimination involving someone’s gender, age, race, sexual orientation, religion; or any physical/mental disabilities they may have.

There may be more things to consider during this pivotal moment of your business’s journey; however, the elements mentioned above are supported by various laws and, with anything contractual, we’d recommend seeking legal advice. Most of the tips listed above, you will only need to set up/address once.

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