Employment Law Back to Basics – Employing People in England & Wales

We set out below a handy reminder of the issues, obligations and requirements that you need to consider when employing individuals in England for the first time.

Check your business is ready to take on employees

Make sure that your workplace is safe and accessible for employees. All employers have a duty to provide a safe working environment. The Health and Safety Executive website provides a wealth of guidance to assist you in this area Health and safety basics for your business (hse.gov.uk)

Register as an employer and set up PAYE

You will need to register as an employer with HM Revenue and Customs (HMRC) before your employee’s first payday. Do bear in mind that it can take up to 15 working days to get your employer PAYE reference number. You may choose to engage a payroll providers who can do this on your behalf. Payroll providers can also offer additional support such as providing payslips and calculating holiday entitlements so you should consider if you want or need these extra services or would rather deal with these inhouse.

Obtain Employers’ Liability insurance

All employers must have Employers’ Liability (EL) insurance cover for at least £5 million (from an authorised insurer) as soon as staff are employed. EL insurance will help an employer pay compensation if an employee is injured or becomes ill because of the work they do for you.  

Check your employer’s pension obligations

All eligible job holders are entitled to a workplace pension scheme so you need to be aware of your automatic enrolment duties as an employer. Your legal duties begin on the day your first member of staff starts work, and even if you think you will not need to put your staff into a pension scheme, you will still have certain duties you must comply with. A qualified pensions adviser can advise you on complying with such duties. More information can be obtained from The Pensions Regulator Workplace pensions law – auto enrolment | The Pensions Regulator

Recruitment

You may need to advertise the role and interview candidates or instruct a recruitment agency to assist you with this process. You must ensure you avoid any kind of discrimination during the recruitment process and make sure your application and interview process is accessible for employees with disabilities. Consider whether any offer of employment will be conditional upon e.g. reference checks or proof of certain qualifications.

Checking a job applicant’s right to work

You must check that a job applicant is allowed to work for you in the UK before you employ them. Checking a job applicant’s right to work – GOV.UK (www.gov.uk)

If the potential employee says they have the right to work in the UK you must verify this by either checking their right to work online (if they have given you their share code), checking certain specific original documents or using an identity service provider that offers Identity Document Validation Technology (IDVT). You could face a civil penalty if you employ an illegal worker and have not carried out a correct right to work check.

If the employee does not have the right to work in the UK they may still be able to work in the UK on a short or long-term basis with a work visa, and specialist Immigration Law advice should be obtained on this issue if applicable. We can provide such immigration advice.

Check if you need to undertake a Disclosure and Barring Service (DBS) check

You may wish to know whether a prospective employee has a criminal record and this can done for any employee via a basic DBS check. However, taking into consideration data protection rules, you should first consider whether a basic DBS check is really necessary for the type of role the individual performs and should certainly not have a blanket policy where DBS checks are used for all candidates. Enhanced “standard disclosure” checks are obligatory in certain roles which involve a high degree of trust and security, such as those who work with vulnerable adults or children. You are required to carry out an enhanced check on a candidate if the relevant role is listed in what is known as the “Exceptions Order” and also the Police Act 1997 (Criminal Records) regulations.

Decide how much you will pay the employee and how you will run your payroll

The rate of pay or salary will of course depend on factors such as the role the employee will be undertaking, their level of experience and/or knowledge and the typical salary expected in your industry. You must ensure the proposed pay complies with National Minimum Wage requirements which can vary depending on the employees age and the type of work they will be carrying out for you. You could either use payroll software to run your own payroll or instruct a payroll provider to do it for you. Specialist tax advisers can provide advice on National Minimum Wage, Income tax and National Insurance issues.

Prepare a Contract of Employment

Employees are legally entitled to a written statement setting out certain prescribed particulars of employment on or before their first day of employment. Some of the prescribed particulars must be included in a single document and the rest can be given in instalments, not later than two months after the beginning of the employment. Employers often put most or all of the required information into a single document, being the contract of employment. This contract is essential to give details of all the terms and conditions that will apply to the employment.  Careful thought should be given to whether any additional terms should also be included, such as, requirement to undertake a probationary period, whether you will pay enhanced company sick pay and whether you want the right to place employees on garden leave, or pay them in lieu of notice at the end of employment. Such additional protections are not automatically included in a standard statement of employment. If you want these useful additional protections do get in touch and we can talk through your requirements and prepare a bespoke employment contract for your new recruits. 

Prepare Employee Policies

Large employers often include a wide variety of employee policies in an Employee Handbook whereas those with fewer staff may prefer to prepare standalone policies covering the basic legal requirements. At minimum an employer should provide employees with access to:

  • a grievance procedure and a disciplinary procedure;
  • a health and safety policy which sets out your general approach to health and safety (this must be a written policy for those with five or more employees).
  • an employee privacy notice –  employers are required to provide employees with specific information about the processing of their personal data to comply with data protection legislation.

Tell HMRC about your new employee

Before you pay your new starter you must register your employee with HMRC using a Full Payment Submission.

If you’re looking to recruit for the first time why don’t you give our Employment team a call?

Dixcart Legal Limited  – November 2023

Dixcart UK has an experienced team of specialist accountants, lawyers, tax and immigration advisers who can advise on all aspects of employing people in the UK. Please get in touch for further details on hello@dixcart.com

The information provided within this document is for general informational purposes only. While every effort has been made to ensure its accuracy, no responsibility can be accepted for inaccuracies. Readers are advised that laws and practices may change over time. This document is provided solely for informational purposes and does not constitute accounting, legal, or tax advice. Professional advice should be sought before making any decisions based on the contents of this document.