People are one of the most important investments for a new business: the ability to attract and retain talent is a key ingredient for growth and success. But getting on the wrong side of employment law can be a costly distraction. To help you manage this side of your business effectively, our Key Knowledge Guide sets out the fundamental elements of employment law and HR management that new businesses should be familiar with.
Make an offer of employment conditional on references or background checks and confirmation of the candidate's right to work in the UK.
Set out the employee's terms and conditions clearly in an offer letter or contract – it is a legal requirement to give an employee a statement of their main terms and conditions within the first eight weeks of starting work. A written contract is the best option – bear in mind that a contract can exist even if it is not in writing.
SETTING UP AS AN EMPLOYER
Register as an employer You will normally need to register as an employer with HM Revenue and Customs once you start employing staff – even if you are only employing yourself e.g. as sole director of a limited company.
You must register before the first payday but no sooner than two months before. Once registered, you will be given your employer PAYE reference number.
The law requires most employers to maintain employers' liability insurance. It protects the employer against liability for injury or disease to its employees arising out of their employment.
Unless exempt, employers must maintain insurance cover of at least £5,000,000 for each occurrence.
Be clear about the new recruit's status: employee, worker, casual or zero-hours worker, intern or volunteer, or self- employed. This can be relevant to your tax and NIC liabilities and other legal obligations and it is important to get it right. It is a complex area and we explain it in more detail below.
Probationary periods are a good way of assessing a new recruit's suitability – there is no maximum length, but one, three or six months is typical. Make sure that you give yourself the right to terminate employment on shorter notice than usual during the probationary period.
ONBOARDING AND RECRUITMENT
It is worth investing some time in setting up the relationship with a new recruit in the right way from the beginning to avoid problems later on.
Be clear about what you want from the individual – write a job specification or job description as this can help avoid doubt and disputes later.
Check that the new employee has the right to work in the UK as employing an illegal worker is a criminal offence – you have an obligation to check their documentation.
Wedlake Bell’s Key Knowledge Guide to Employment Law for New Businesses
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