There are some important rules an employer needs to be aware of when hiring workers for the first time. We have listed 6 important rules you should know about when hiring staff.
National Minimum Wage
Every employer must pay their employee at least the National Minimum Wage.
|Year||25 and over||21 to 24||18 to 20||Under 18|
|April 2019 (current rate)||£8.21||£7.70||£6.15||£4.35|
If HMRC find out an employer is paying their employee below the minimum wage, they can send a notice of arrears and issue a penalty for not paying the correct rate of pay. The maximum fine is up to £20,000 per worker. In addition, if an employer fails to pay the fine, they can be banned from being a company director for up to 15 years.
Legal right to work
Click here to see if the person you are hiring has the right to work in the UK.
You may also need to carry out a DBS check. Especially when working in healthcare or childcare. A DBS is carried out to check an individual’s criminal record.
There are 4 types of checks, they are;
- a basic check, which shows unspent convictions and conditional cautions
- a standard check, which shows spent and unspent convictions, cautions, reprimands and final warnings
- an enhanced check, which shows the same as a standard check plus any information held by local police that’s considered relevant to the role
- an enhanced check with barred lists, which shows the same as an enhanced check plus whether the applicant is on the list of people barred from doing the role
Employers’ Liability Insurance (EL)
You must get EL insurance as soon as you become an employer and your policy must cover at least £5 million and come from an authorised insurer. EL insurance will help you pay compensation if an employee is injured or becomes ill because of the work they do for you.
If you do not have EL insurance after you become an employer you can face hefty fines. You can face a fine of £2,500 every day if you are not insured properly. You can also be fined £1,000 if you do not display your EL certificate or refuse to show it to inspectors when they ask.
Written Statement of Employment Particulars
As an employer you must give your employees a written statement of employment particulars if their employment contract lasts 1 month or more. The statement isn’t a contract – it includes the main conditions of employment. Employers must provide the statement to their employees within 2 months from the start of employment.
A written statement must contain information about:
- how long a temporary job is expected to last
- the end date of a fixed-term contract
- notice periods
- collective agreements
- who to go to with a grievance
- how to complain about how a grievance is handled
- how to complain about a disciplinary or dismissal decision
Register as an Employer
You need to register as an employer with HMRC when you start employing staff or using subcontractors for construction work. Even if you are employing yourself, you still need to register. Also, you must register before the first pay day and you cannot register more than 2 months before you start paying people. It can take up to 5 working days to get your employer PAYE reference number.
If you do not have your employer PAYE reference number you can still pay employees. In order to do so, you will have to;
- Run payroll.
- Store your Full Payment Submission (FPS).
- Send a late FPS to HMRC.
A penalty is charged if;
- your Full Payment Submission was late
- you did not send:
- the expected number of FPSs
- an Employer Payment Summary (EPS) when you did not pay any employees in a tax month
The penalty you pay depends on the number of employees you have.
|Number of employees||Monthly penalty|
|1 to 9||£100|
|10 to 49||£200|
|50 to 249||£300|
|250 or more||£400|
Employers have to provide a workplace pension scheme for eligible staff as soon as their first employee starts working for them.
Employers must enrol and make an employer’s contribution for all staff who:
- are aged between 22 and the State Pension age
- earn at least £10,000 a year
- normally work in the UK (this includes people who are based in the UK but travel abroad for work
At Kala Atkinson, we have years of experience helping employers ensure that they are compliant. If you need help or more advive on any of the above, get in touch today.