Taking on your first employee – ten basic steps

If you’re thinking of expanding the contract work you undertake into a larger business, taking on your first employee is a big move. Becoming an employer for the first time will inevitably mean dealing with some red tape, but the process should be trouble-free if you follow these ten steps.

This guide has been written by citrusHR, which provides a service designed to remove the hassle of employing people – see footer for details.

1. Check the employee’s identity

You have to check your new recruit’s identity to make sure they have the right to work in the UK. You need to see their (original) passport or birth certificate (and also a visa or work permit if they are not from within the EU) and take a copy to keep as evidence that you have done the check. The fines for hiring illegal workers can run as high as £20,000 per person, so you need to do this properly.

2. Issue a Contract

You have to do this within two months of them starting work, ideally before they actually start work.

3. Employer’s insurance

You must carry employer’s liability insurance with an authorised insurer (so you can pay compensation to employees if they become injured or ill due to their work). If you already have insurance, check that it includes Employer’s Liability and that the cover is at least £5 million. Fines for not having this sort of insurance can reach £2,500 per day. Read more in our insurance section.

4. Registering with HMRC

You’ll need to register as an employer with HMRC before you pay your employee for the first time. You can do this online. And you need to pay employees through PAYE. Find out more on the HMRC site.

5. Ensuring a safe workplace

Just because you’re not in a factory, doesn’t mean you’re not caught by health and safety legislation. Even for staff taking on IT contract work, you’ll need to ensure they have a suitable desk and adjustable chair.

6. First aid

As a minimum, you’ll need to have a suitably stocked first aid kit.

7. Storing employee data

You must keep employee information confidential and comply with Data Protection laws. Employee data should be stored securely for at least seven years.

8. Equal opportunities

The Equality Act 2010 affects you as an employer in a range of ways from recruitment to managing staff.

9. Holiday

Full-time staff must be given a minimum of 5.6 weeks (28 days) paid holiday, Bank Holidays can be included in this 5.6 weeks.

10. Working hours

If your new employee works more than 6 hours a day, they’re entitled to a 20-minute rest break. They also have the right to eleven hours rest between working days. And shouldn’t be required to work more than 48 hours in a seven-day period.

You won’t be surprised to hear, there’s more to do than meets the eye under some of those headings. But this checklist will at least help you relax knowing you’re doing all the main things.

Further Information

David Lester is Chairman and Founder of citrusHR, the UK’s most comprehensive HR software and support system. Designed specifically for UK small businesses, citrusHR simplifies creating employment contracts, making job offers, managing employee records and seeing where and when staff are working.