Taking on Employees
Taking on employees is an important process in growing your business and with it comes a range of new responsibilities. This guide explains some of the key factors that will affect the way you recruit and manage your new employees.
A good place to start understanding is in the recruitment process. You should know what stages need to happen and when.
The Recruitment Process
When you are recruiting new employees you must ensure the process is fair and non-discriminatory. You must not discriminate against a candidate on the basis of race, sex, disabilities or marital status at any point in the recruitment process. There are a number of exceptions to these rules for certain job roles. For example in the case of acting and modelling where someone from a particular racial group or sex may be required for authenticity reasons, or restaurants that supply authentic cuisine may also be allowed to recruit from a particular racial group.
Be careful when you are writing notes about your applicants, under data protection laws candidates can request to see the notes taken during the interview.
Before you decide to take on an employee you must ensure they are eligible to work in the UK. This is your legal responsibility. You can confirm eligibility by contacting the individual's previous employer or obtaining a letter from a government agency which states the candidates National Insurance Number. This could be any of the following:
- A P45 from a previous employment
- A P60 end of year summary
- A payslip
- A National Insurance Card
You can find out more on National Insurance Numbers in this blog post.
For further guidance on eligibility issues you can contact the Home Office on 020 7035 4848 (You can find their website here).
Hiring the right people
When considering who to employ in your new business venture it is important not to just hire people with the same skills as yourself. You may think that it's useful to have everyone working on the same thing and have the ability for collaboration, but your business will not be able to grow if there's no one there challenging the way that things are done.
Experience is a good quality. However, you do not necessarily want to hire people who are used to doing a particular job a particular way. You need adaptability in your workforce to allow you to respond to the constantly changing demands within your market. People who thrive in business are people who apply initiative and detach themselves from their own preconceptions, confronting everything with an inquisitive outlook. If you have built your own business then you are likely to already have these abilities, there was never anyone there to hold your hand. You achieved this by making your own decisions and applying initiative, an effective workforce will rely on you to lead them in the right direction but they will not ask you for help when they reach the first hurdle.
Another important quality to look for is commitment, this goes without saying really but it is not always easy when you are interviewing somebody to determine how committed they will be. You should try to look at what they have achieved already in their previous workplace and what qualifications they have attained. People who speak enthusiastically about their previous assignments are likely to be individuals who enjoy their work and will not have difficulty committing to a project.
Drawing up Employment Contracts
A verbal employment agreement exists as soon as a job is offered to a candidate. In accordance with UK employment legislation all employers must provide a written statement defining the terms of their employment within 8 weeks of taking them on. This statement or employment contract, as it is known, should contain the following:
- The name and address of the employer and employee.
- The date the employee's period of continuous employment began.
- This is usually the date they started with you but if you bought the business from a previous employer the period begins from when they originally started.
- The amount the employee will be paid and the times during which they will be required to work.
- Job title and a description of the duties.
- The place or places where the employee will be expected to work.
- The notice period you and your employee must provide on ending the employment.
- How long the job will last if it is a fixed term employment.
- Details of any collective agreements outside of the contract that will affect the terms of their employment.
It is now compulsory for employers to provide a further written policy that will be used to define a three stage procedure for dealing with grievances and disciplinary issues.
The Company Wizard can provide a complete Employment Template Pack that is compliant with current UK employment law and includes a full contract and 3 additional policies to cover grievances, disputes and disciplinary matters.
When taking on employees you must insure yourself against any claims arising from illnesses or injuries that an employee may acquire while working for you. This can be done by obtaining Employers' liability insurance. The minimum statutory cover is currently £5 million and the certificate should be displayed in the workplace and retained long after it has expired in case an employee makes a claim many years later.
Certain professions will also benefit from legal indemnity insurance. This type of cover is usually sought after by solicitors and accountants and will provide financial support in the event that a customer decides to take legal action against an employee who has been wrongly advised.
The Minimum Wage
The National Minimum Wage (NMW) is a legal right which covers almost all workers in the UK and serves to protect employees from unduly low pay.
The minimum rate of pay as per the NMW is £6.95 per hour for workers aged 21 - 24 (2016/2017). For workers aged 25 and over it is now a legal requirement to pay them the living aged which is £7.20 per hour.
For more information on the National Minimum Wages please refer to the GOV.UK Website NMW.
Employees who are unable to work for a period of 4 or more days are entitled to a minimum level of statutory sick pay (SSP). Employers can, however, claim a percentage of the money back from HM Revenue and Customs if your business's sick pay reaches a set level.
The current rate of sick pay is £88.45 (2016/2017) (or at the set daily rates if a full weeks pay is not applicable). Only employees who pay National Insurance above the Lower Earning Limit (LEL) are entitled to receive Statutory Sick Pay. For more information on SSP please visit the HMRC Website.
You can find a whole range of employment guides on the GOV.UK website.
- 14 Mar 2018 - Striking off a Limited Company using form DS01
- 05 Mar 2018 - Managing your accounts
- 27 Nov 2017 - Company Formation Wizard Services: VAT Registration, Company Formation & Stationery
- 27 Nov 2017 - UK Financial Sanctions Guide
- 21 Sep 2017 - How to achieve a productive board meeting