Taking on your first employee is a vital milestone in the growth of any successful business. Our essentials guide explains your legal and financial responsibilities and how to recruit the right person...
The right employee will take pressure off you and allow you to concentrate on the bigger needs of the business, but the process requires careful preparation.
Your first employee: checklist
1. Job description
Think about what you really need help with. There’s no point advertising for a typist if what you really need is someone who can also help with bookkeeping. Write out a list of the tasks you want the new employee to do. From that you can compile a job description with any necessary qualifications or essential experience.
2. Recruiting
Recruitment agencies can cost a lot of money so you may want to consider advertising locally or in a specialist magazine that potential candidates are likely to read instead. Watch how you word your advert: asking for a “keen, young person” would count as age discrimination, while advertising a wage of £2 an hour would break the minimum wage.
3. Interviewing for your first employee
Before interviewing people, check they have a legal right to work in the UK. Anyone born here or within the EU will have that right. If the person is going to work with young or vulnerable people, it would also be worth doing a criminal records check.
When interviewing, make sure you don’t fall into the trap of asking a revealing question, like whether the interviewee is planning to have children. This again could be seen as discriminating.
4. Registering as an employer
When you take someone on, HM Revenue & Customs require you to register with them. Call its New Employer Helpline on 0845 6070143 or register with HMRC online and you will be sent a Starter Pack covering all of your tax, National Insurance and payroll obligations.
5. Employment law
Employment law can initially seem rather burdensome, but there’s a lot of free information available to help you understand your responsibilities. A good place to start is to contact your local branch of the Advisory, Conciliation and Arbitration Service for advice, or download its Getting it right factsheets, which cover key areas of employment law.
6. Employment contracts
Once you’ve taken on someone, they are entitled to a written statement of employment particulars detailing their job, salary, hours of work and holiday entitlement.
7. Tax and National Insurance
As an employer, it is your responsibility to ensure tax and National Insurance deductions are correctly made. The Revenue’s Starter Pack details what you need to do.
8. Health & Safety and Employers’ Liability Compulsory Insurance
It is up to you to ensure the safety of your employee. Most of it is common sense, like having fire exits and carrying out risk assessments, but to make sure you’ve not overlooked anything, check out the Health and Safety Executive’s website or call its infoline on 0845 345 0055.
As an employer you are also legally obliged to take out Employers’ Liability Compulsory Insurance.
9. Obligations for employers in specific industries
Some industries have further obligations in terms of health & safety. If you work in manufacturing or construction, seek advice from the HSE. If you work in a shop or office, you need to contact your local Environmental Health Office to notify them that you are taking on an employee.
10. Training your new member of staff
To ensure your new employee develops with your business, it makes sense to make time to explain your business and train them up. The more you put in, the more you are likely to get out of your new employee. The Government’s Train to Gain service offers advice and financial support for training.
How uSwitch for business can help
Read our guide to business insurance