Thinking of employing staff

If you are going to employ staff there are a few points you need to know. This article by Quickbooks covers them well.

#1 – Legal status

For obvious reasons it’s hard to quantify how many people are working in the UK without the legal right to do so.

It’s why the authorities take an extremely dim view of employers hiring workers illegally, with maximum penalties including five years in prison and unlimited fines.

The law targets those with “reasonable cause to believe” a member of staff lacks the right to work in the UK, perhaps because they don’t hold the right permissions or aren’t allowed to carry out certain types of work.

Always assess documents for authenticity and carry out a right to work check if you are concerned, especially if you operate in an industry where the problem is common. And don’t assume that if a person has a National Insurance number, they have a right to work in the UK. This isn’t always the case. And conversely, someone may have a right to work but not have a National Insurance number.

#2 – Pay at least minimum wage

The National Minimum Wage is there to ensure people get a basic rate of pay. The rate varies among different age groups and workers over 23 years of age are entitled to the higher rate National Living Wage.

The legislation affects all employers, large and small, and the rate of basic wages increases most years, set by the Low Pay Commission. It’s worth checking the current National Minimum Wage and National Living Wage rates.

#3 – DBS checking

If your employees will be working with vulnerable groups, such as children and people with special needs, they’ll also need to pass a Disclosure and Barring Service (DBS) check.

A DBS check will turn up any unspent convictions, while more thorough versions also show whether candidates appear on any lists barring them from specific roles. You can check which DBS check is right for your employee.

#4 – Get insured

You’re responsible for the welfare of your people, so secure employers’ liability (EL) insurance before their first day on the job. EL insurance will help you pay compensation if an employee is injured or becomes ill because of the work they do for you.

The policy should provide at least £5 million of cover and come from an authorised insurer. Otherwise you’ll pay a £2,500 fine for each day you employ someone without a policy in place.

#5 – Provide a written statement of employment

As an employer you must provide this – it sets out the terms of employment – if you’re employing someone for more than one month. It must include important details such as pay, working hours, holiday entitlement, sick pay and other paid leave (even if you only keep to the statutory minimum requirements), any benefits, as well as conditions for termination. (It’s worth noting that a written statement of employment isn’t the same as an employment contract.)

As a start, you can download the template provided by Acas.

#6 – Tell HMRC

Before taking on your first employee, register as an employer with HMRC. You must do this within four weeks of new staff members’ first payday. HMRC will provide you with an employer PAYE reference number, which can take up to five working days.

Sticking with financial matters, you must also set-up and manage a basic workplace pension scheme for all eligible employees. And you must make an employer’s contribution where applicable

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