No matter how successful your business has been with just you working in it, if you want to grow you’ll need to employ people.
There are innumerable benefits of having employees. The right people will ease the workload on you and allow you take holidays. Good staff keep your business running day to day, so you can focus on the most important part of your role as the leader: growing the business.
But being an employer brings with it a wide range of responsibilities that are driven by statutory requirements. The law places certain obligations on employers to ensure the rights of their staff are adhered to. And you have a general ethical responsibility to look after your team and ensure they are fit, well and happy at work.
The majority of these responsibilities start from day one of employment and continue for the lifetime of the employment relationship. When you hire staff, some of your main responsibilities as an employer are;
Before you employ someone, you must check they are eligible to work on the UK. If they’re not, you could face a hefty fine. You must also actively avoid discrimination in recruitment advertising and selection procedures.
Your business can be taken to an employment tribunal by someone who believes you didn’t give them a job because of discrimination.
At every stage of recruitment state clearly the skills the candidate needs and the tasks they will perform. Avoid asking for personal details that are not related to the job, such as their race or marital status.
Duty of Care
As soon as an employee begins employment, you as their employer, have a duty of care towards them. This duty is not set out in a piece of legislation – it is a common law principle that can also apply in other areas of life outside of the employment relationship.
Under the duty, employers must take all reasonable steps to ensure the health, safety and wellbeing of their employees. This obviously encompasses strictly health and safety legislation in terms of physical health when undertaking potentially dangerous tasks; but also covers safety in terms of mental health. An employee’s mental health may be at risk in certain jobs dealing with emergency situations, for example.
Alternatively, employers must ensure that employees take preventative measures to ensure employees are not bullied or discriminated against because this could also affect mental health.
In order to meet their responsibilities in this regard, employers should undertake risk assessments to identify the need for any action to safeguard employees’ health.
Additionally, written policies will help convey an employer’s anti-bullying stance and zero tolerance towards any kind of discrimination taking place in its organisation. Policies will also provide good evidence of an organisation’s culture should this ever be questioned.
Contract of Employment
Some policies may be included in the employee’s written contract of employment. There is a specific requirement on employers to provide this written statement of employment to all new employees within 2 months of their start date.
The statement must, by law, contain certain pieces of information relating to basic terms and conditions of employment including details on pay; hours of work; holiday entitlement; sick leave; pension; notice periods and what disciplinary and grievance procedures are in place.
Not only does this document provide the employee with information on their entitlements, it can also let the employee know of the rules and procedures that an employer imposes during employment.
It can be then used as a continual reference document throughout employment to avoid confusion if an employee were to query something, and even evidence at an Employment Tribunal.
Employers’ liability insurance
If you employ anybody, even if they are just part-time casual workers you are required by law to take out employer’s liability insurance.
Fines can be up to £2,500 per day you don’t have the cover in place, so you should make sure you have an EL Insurance policy in place ready for when your first employee starts working with you.
Another area of responsibility is ensuring that workers are able to access their rights under working time legislation. This is an important area of law because, once again, it combines both employment and health and safety legislation.
Employees must be allowed a minimum amount of ‘rest’ per day and per week in order to meet the Government’s requirements. Again, this applies from the first day of employment and looks to ensure that workers have the opportunity to take a break from work so that their health and safety is not compromised.
A worker must have a break of at least 20 minutes if they work for longer than 6 hours in a day. A certain amount of rest in between working days and also between working weeks must also be provided. A minimum amount of paid annual leave per year must also be given.
Whilst these represent statutory minimums, an employer cannot force workers to take the breaks and annual leave that they are entitled to. The responsibility lies with the employer, however, to ensure that there is the opportunity for the worker to take the required rest period i.e. that measures are put in place to provide cover so that the worker can be away from their work for the minimum time period.
Employers must ensure that workers are paid correctly in accordance with both their contract of employment and legal obligations.
For example, the law on the National Minimum Wage requires the employer to pay a minimum rate to workers dependent on their age and this is stringently enforced by the Government. It is the employer’s responsibility to monitor the age of its employees and to increase pay when necessary.
From April 2016, employers need to comply with the National Living Wage regulations.
The law on paying workers goes further than just the National Minimum Wage and also covers pay when off sick; when on holiday; on family related leave; on a period of lay off and when being made redundant to name but a few.
If your team are staff on the PAYE scheme, you must deduct tax and National Insurance contributions from their pay. Your business also has to pay NI contributions.
Employees must be given an itemised pay statement which shows what they’ve earned, what was deducted, and how it was paid.
As an employer you are not allowed to make unauthorised deductions from your staff’s wages. That means you must place notification of any charges in their contract, or get written permission first.
Employees have several rights, other than those relating to rest breaks and annual leave, in relation to time off. Failing to recognise the operation of the law in these areas can lead to an employment tribunal claim.
One significant area relating to time off is maternity leave. It is important to ensure that employees know what their rights are in this area including the right to take time off for an ante-natal appointment.
This has more than one advantage. Not only are employers ensuring that they keep on the right side of the law in terms of employment rights, but it can also create a happier workforce when employees know that their employer is supportive and does not create a barrier to their accessing their rights.
If you employ people, you will need to provide an Automatic Enrolment pension scheme.
General awareness of the law is a requirement for all employers. Employment law is likely to come into at least one decision every day; whether it be refusing an annual leave request, or calculating holiday pay, and unfortunately, ignorance is not a defence.
About the author
This guide has been written exclusively for ByteStart by Peter Done, Managing Director of Peninsula Business Services – the UK’s leading specialist Employment Law, HR and Health & Safety service. Other employment guides Peter has written for ByteStart include;
- 7 Common HR Mistakes small businesses need to avoid making
- Becoming an employer – Your responsibilities when you hire staff
- Guide to Employment Contracts for small businesses
- A practical guide to flexible working rights for small businesses
- Managing staff sickness absence – A Guide for small businesses
- Making staff redundant – how to do it and stay on the right side of the law
- What is workplace diversity, why is it important, and what are the benefits to businesses?
Successfully managing people
ByteStart is packed with guides to help you manage staff and stay on the right side of the law, including;
- The real cost of hiring your first employee
- Dismissing a member of staff – what you need to do to stay on the right side of the law
- The ‘Fit for Work’ scheme – what it means for employers
- How to prepare for and handle an employee grievance
- Guide to Auto Enrolment – 12 key facts small businesses need to know
And these to motivate everybody;
- How to design an effective incentive scheme for your small business
- Using staff benefits to motivate and retain employees
- How setting up a salary sacrifice scheme can reward staff and mean lower tax bills for employers and employees
- 5 ways to motivate your staff without spending a fortune
- How businesses can encourage a healthy work/life balance and benefit from more engaged and productive employees
Some laws and guidelines may be interpreted differently for your business. Get professional advice from a qualified person before taking any action. Don’t rely purely on information contained in this article.