Employing people for the first time is a big step and so it pays to think about what you need before you go ahead.
We’d always suggest getting things in place before the new person starts. Some of these are legal requirements and some just make sense as trying to sort out things like a pension scheme whilst you are training someone at the same time is simply making life difficult for yourself.
So what should you get in place before your new person starts? Here’s our TL;DR list;
- PAYE registration
- A method of running payroll
- A way of paying people
- Employer’s liability insurance
- A written statement/contract of employment
- Employee handbook/Employment policies
- A right to work check
- DBS or background check
- References
- A health and safety assessment
- A pension scheme
PAYE registration
You can register as an employer up to four weeks before you employ people for the first time and although this usually goes without a hitch, we’d always suggest getting this underway as soon as you can.
It’s a simple process that you can do online and this will result in you being issued with an employer number and a tax office code. You’ll need these when you set up your payroll processing software.
Be aware though that you need to put in a submission every month, whether you have paid people or not so if your plans change or you find it hard to find the right person then you’ll need to make sure you still put in a zero submission.
A method of running payroll
If you have employed people back in the day then it may come as a surprise to find out that nowadays, everyone needs to submit their payroll reports to HMRC digitally.
This means software that can connect up to the HMRC RTI system allowing you to carry out all of your submissions quickly and easily.
Most of the online accounting systems such as Xero, QuickBooks and Sage all have payroll options so you can probably get this turned on in your current bookkeeping system.
You’ll need to set it up to talk directly to HMRC and this includes entering the employer codes that you got in step 1.
A way of paying people
This is something that many people forget but is obviously a really important aspect of employing people for the first time.
If you only have one member of staff then it is a simple matter to just make a payment using your bank account manually but if you are employing more people then you may want to use a more capable method.
Employer’s liability insurance
If you are employing people then you need employer’s liability insurance and this is not optional.
You should already have public liability insurance and it is probably easiest to call your current broker or insurance company and just add this on until the end of the year.
The good news is that this is relatively cheap insurance unless of course you are in a hazardous profession.
A written statement/contract of employment
On day one you’ll need to give your new employee a written statement or contract of employment.
This needs to show the hours they will work, the pay they will receive and how often they will be paid, their rights and responsibilities during their time with you, their main place of work and any probation period.
You’ll naturally need to include your name and address and any other terms that are applicable such as whether it is a permanent or temporary contract and if any training will be needed.
Many employers include things like non-compete clauses and sections that deal with the place of work, what they will do and what happens if they are sick or are dismissed.
The contract of employment is a really important document and so we would always suggest getting qualified and experienced advice rather than doing it yourself and hoping for the best.
We always advise our clients to use a contract that covers more than the minimum written statement requirements, as they are there for the employee’s protection and the contact can be used to balance that and protect the company.
Find out more here or just give us a call and we’ll help you sort out what applies to you.
Employee handbook/Employment policies
An employee handbook is often a collation of policies and procedures such as IT use, anti-discrimination and health and safety.
You may find that many contracts of employment have clauses that direct the employee to the handbook to find out more about a particular situation.
The employee handbook will also include less formal descriptions of things like dress codes, how to book holidays, what to do if they are sick etc.
Although this may seem like overkill, especially if you only have one employee, it provides some very important information that you are best to get right straight from the start.
If you’d like more information about policies and procedures then we’ve produced a blog on the subject here.
If you don’t produce an employee handbook then you’ll still need to have policies.
At the very minimum, you’ll need policies that set out the disciplinary process, IT use, social media, health and safety and an absence management policy.
We hope you never need to use them, but you have to remember that it is difficult to manage someone who is always absent if you don’t have an absence management policy.
Right to work check
The right to work check is a legal requirement in the UK and you need to do this before you employ people.
It’s a sensible idea to add a sentence in the offer letter that makes it clear that the offer is conditional on passing this.
This needs to be checked either using original documents such as passports or you can check online using the government’s right to work check service.
If you use original documents then make sure you keep copies and contemporary notes to show that you have actually made the checks in case there are any problems later on.
References
A lot of employers like to hire on the basis of ‘gut instinct’. After all, you’ve met the person and they seemed nice so they wouldn’t lie, would they?
Well unfortunately yes they would!
People inflate the importance of the job they did, pretend they were more senior than they were, say they were there longer or even say that they were at a company when they never were.
So make sure that you get references and then follow them up. A phone call is always best as people will say things that they wouldn’t commit to paper but at the very least, get an email that confirms someone’s work history.
An offer letter
This is an important step because it does two things.
Firstly it sets out what you are promising the employee so it gives them confidence that they can hand in their notice and that they will have a job to go to.
But it also protections you, because it includes any conditions on which the offer rests. For example, you may say that the offer is conditional on references being satisfactory and if they aren’t you can withdraw the offer.
We usually suggest that an offer letter includes;
- Job title
- Start date
- Reporting manager
- Place of work
- Salary
- Contract length (for FTC and temporary jobs)
- How to accept
- Conditions that make the offer invalid
- Unsatisfactory references
- Undisclosed criminal record
- No right to work
- No signed contract
- being in breach towards any 3rd party such as former employers
You also need to have space for the hiring manager and the employee to sign and date and then give them clear instructions as to how to accept the offer or return the signed document.
DBS or background check
If your work includes contact with children or vulnerable adults then you’ll need to get a DBS check done on your new employee.
The type of check depends on their job and what contact they have with people. For example, a DBS check is mandatory for people working with children or vulnerable adults whilst a BPSS check is needed for Government workers in the UK.
You may also want to carry out checks on their references, qualifications and prior employment. It is a sad reality that people will lie on their CVs so you are better off checking that they know what they are doing before they start rather than having to dismiss them afterwards.
A health and safety assessment
For most companies, this will be fairly simple but the more hazardous your environment is, the more you need to have things like risk assessments in place.
You may also find that it is a condition of your insurance that you have carried out a health and safety assessment or large customers or public bodies may ask that you provide them with a copy of this.
A pension scheme
You must provide a workplace pension by law and so it’s a good idea to look at this right from the very start.
You can delay enrolling people for up to three months but in the end, you will need to offer a pension and unless they opt-out, which means you’ll need to make contributions on their behalf.
There’s a lot of information out there on workplace pensions so you could choose to go with a private provider or alternatively you could choose to go with the government’s NEST scheme.
Don’t chance it – get help
Employing people for the first time is an exciting and yet worrying time.
There’s so much to think about and if you miss out on some of our suggestions such as the right to work or registering as an employer then the consequences can be dire.
For many of the items here, you’ll only need to do them once and we can guarantee that once you’ve got everything in place you’ll sleep much better at night.
So don’t chance it, call us now to get qualified and experienced help with setting up your systems.