A quick hiring guide to outline what you need to do and whenOriginally published: June 2017 | Last reviewed: May 2018
So you've decided to hire your first employee. Congratulations on reaching this milestone!
Taking on an employee raises several important legal considerations, not to mention administration and additional cost (one reason you might choose to hire someone on a freelance basis instead). So make sure you can check off the items below as you proceed. Some are legal requirements, while others are essential administrative steps.
Before you advertise
Before you place your first advert for the position, be sure to:
- Budget for the role. Decide how much you're able to pay for the position. You must pay at least the national minimum wage, but there are good reasons to consider paying a higher living wage. Ensure you've factored in extra costs as well, such as national insurance contributions, insurance expenses, pension contributions, office and equipment costs, benefits, holiday pay and sick pay. Also ensure you can provide the physical working space needed.
- Draft a job description. Clearly set out tasks and responsibilities, required skills and experience, and expected working hours (full-time, part-time or flexible) in a detailed job description.
Recruit in a way that's in line with the Equality Act. For example:
- Advertise the role as widely as possible
- Shortlist candidates
- Hold careful job interviews, taking care not to ask questions that could be discriminatory
- Make an offer (and state whether your offer is subject to any conditions, such as background checks)
- Confirm acceptance
Before your selected candidate starts work
Once you've chosen your new employee, you have a few tasks to complete before his or her first day on the job. For example, be sure to:
- Conduct an employment check. Make sure your employee has the legal right to work in the UK.
- Conduct a background check. You might need your employee to apply for a Disclosure and Barring Service (DBS) check, depending on the nature of the work — for example, if he or she will be working with young people or vulnerable people.
- Acquire employment insurance. Even if you have only one employee, you're legally required to carry employers' liability insurance (except in a few circumstances, such as if you're employing a family member).
- Establish employment terms. Set out the basics in writing, such as start date, location, pay, holiday entitlement and so on. While legally required two months after the start date, HR experts advise getting a solid contract in place before or very soon after the employee starts work. ACAS provides details and a template on their website.
Before the first payday
Before you issue your new employee's first paycheck, be sure to:
- Choose how to run payroll. You can either do this yourself using payroll software, or hire a bookkeeper or accountant to manage it for you.
- Inform HMRC. You must register with HMRC as an employer before the first payday. This can typically be done online through the registration tool offered by GOV.UK.
- Check your pension obligations. UK rules require all employers — including nonprofits — to automatically enroll their employees into a workplace pension scheme, unless the employee opts out. This includes every employee age 22 or older who earns a yearly salary of £10,000 or more, including part-time, fixed term and agency staff.
Within two months of the start date
If you employ someone for more than one month, you're legally required to send the employee a written statement of employment — including details of the work and any terms and conditions (if you haven't done so already). You need to do this within the employee's first two months on the job.
This article was produced with guidance from YourPeople, a UK-based firm that provides outsourced human resources services across all sectors.