No matter how successful your business has been with just you working in it, sooner or later you may want to take on an employee.
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 there are a huge number of responsibilities to you as an employer. There are many which are required by law. And you have a general ethical responsibility to look after your team and ensure they are fit, well and happy at work. Get this right and your business will benefit hugely.
We take a brief look at your main areas of responsibility:
Recruiting: You must check your staff 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.
New starters: Every employee is entitled to a written statement of employment within two months of starting. This can either be a contract or a statement and set of policies covering the date they started work, their salary, hours of work and holiday entitlement, your policies on sick leave and pay, and pension availability. There should also be a statement on how you or your employee can terminate the job, and what disciplinary and grievance procedures are in place.
Minimum wage: Adults aged 21 or over are entitled to £6.08 an hour. 18 to 20-year-olds have a minimum wage of £4.98 an hour, and 16 to 17-year-olds £3.68 an hour. These rates are correct from 1st October 2011.
Pay: If your team are staff on the PAYE (Pay As You Earn) 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 earnt, 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.
Working time directive: This is a set of rules which say each employee cannot work more than 48 hours a week including overtime, and are entitled to 20 minute breaks every six hours. There are other rules that apply to night workers and people aged 15 to 18.
Sick, holiday and maternity pay: This is where employing people can get really expensive. You must pay statutory sick pay to all qualifying employees from the fourth day of illness onwards, up to 28 weeks for one period of sickness. This is currently £81.60 a week. HMRC may allow you to reclaim some of this. You must also give employees 24 days holiday a year (pro rata for part-timers). You don’t have to pay your staff for taking time off during bank holidays, but can make it part of their minimum leave entitlement. However consider the possible negative effects this may have on morale. Most pregnant employees are entitled to Statutory Maternity Pay as long as they have completed 26 weeks’ continuous service by the end of the 15th week before the expected week of childbirth. This is six weeks at 90 per cent of her earnings, then £128.73 a week for 33 weeks. New fathers are entitled to two weeks’ paternity leave at the same rate.
Pension: If you employ five or more people, you may need to provide a stakeholder pension scheme. Your team aren’t obliged to sign up, and you don’t have to make an employer contribution.
Health & safety and liability insurance: Finally, you are required to ensure your team can do their job safely (you can get more advice on this from the Health & Safety Executive), and you must take out employer’s liability insurance.
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.
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