Understanding how to employ people is an important part of getting your business off the ground. You must have a clear idea of what skills you need, how many roles you want to fill and how you will find the right employees.
Achieving all these things requires you to devise a sound recruitment strategy. However, of arguably greater importance is ensuring you fulfil your statutory obligations when hiring new staff.
Hiring employees: 5 things you need to do
Register as an employer
You must register as an employer with the government before you can take on staff. This must be done before you first pay your employees but cannot be done more than 2 months beforehand.
The process can take up to 2 weeks to complete, so make sure you plan accordingly. You register as an employer through the government’s website.
Employment insurance
You’re legally obliged to take out employers’ liability insurance with a minimum £5 million of cover.
Failure to do this may result in daily fines of up to £2,500. Additionally, £1,000 fines will be issued should you fail to display the insurance certificate.
Work out your wages
By law employees must be paid at least the national minimum wage (NMW). Since April 2018, the NMW rates have been as follows:
- Age 25 and over: £7.83 per hour
- 21-24 years-old: £7.38
- 18-20 years-old: £5.90
- Under-18: £4.20
- Apprentice: £3.70
Talk to us about setting up your payroll.
Conduct employment checks
You must run employment checks before making the final decision about who to hire.
Firstly, check whether the applicant has the legal right to work in the country. Businesses operating in certain sectors will also need to run a criminal record check (CRB) on the individual before they can be hired.
Auto-enrolment
Enrolling employees into a workplace pension scheme is now a statutory duty for all businesses. You must make a minimum pension contribution of 2% of the employee’s salary; this will rise to 3% in the 2019/20 tax year.
All employees who are aged between 22 and the state pension age and earn over £10,000 a year must be enrolled onto your workplace scheme.
Speak to our advisers for information on setting up a workplace pension scheme.
Have you recently started a business?
Our accountants and business advisers can assist you every step of the way.
Contact us via this page or call0161 477 6789 for more information.
© 2019 Warr & Co Chartered Accountants. Warr & Co Chartered Accountants is a member of The Institute of Chartered Accountants in England & Wales (ICAEW). Whilst the information detailed here is updated regularly to ensure it remains factually correct, it does not in any way constitute specific advice and no responsibility shall be accepted for any actions taken directly as a consequence of reading it. If you would like to discuss any of the points raised and / or engage our services in providing advice specific to your personal circumstances, please feel free to contact any one of the partners on 0161 477 6789 or contact us via our website forms. Warr & Co Chartered Accountants are registered to carry our audit work in the UK, our audit registration number is C002961684, for more information please visit www.auditregister.org.uk.