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Join for freePosted: Tue 18th Feb 2025
In this webinar, Julia Collingwood, Enterprise Nation's people operations manager, discusses legal requirements and best practices for first-time employers with Simon Obee, head of HR advisory at Employment Hero.
An employment lawyer of more than 20 years, Simon covers what small businesses need to know legally when recruiting employees and managing their workforce.
This session is part of Enterprise Nation's Talent Hub programme.
Why small businesses should treat hiring as a strategic investment
How abiding by employment law means keeping up to date with the regulations and putting proper documentation and workplace policies in place
Why it's crucial to hire staff who fit with your company culture, and set clear expectations from the beginning
The importance of being proactive when working to address and resolve workplace issues
Employers must assess the full financial implications before hiring.
Key costs include:
salary and National Insurance contributions (NIC)
tax deductions and pension contributions
work equipment and software subscriptions
recruitment expenses (such as job postings, hiring platforms, onboarding costs)
Remember – there's government assistance to support your recruitment. For example, Employment Allowance helps eligible employers reduce their National Insurance contributions.
Employers' liability insurance: Legally required and protects against employee workplace injuries or accidents.
Registering with HMRC: Employers must register at least four weeks before hiring to remit PAYE (Pay As You Earn) tax and NIC contributions.
Setting up a pension scheme: Most employees must be automatically enrolled in a workplace pension. Employers need to choose a pension provider that fits their business needs.
Setting up payroll:
Employers must pay salaries on time, make the correct tax deductions and issue payslips.
Payroll can be outsourced or managed in-house using payroll software. Employment Hero and other HR providers offer automated payroll solutions.
Employers must distinguish between employees and contractors (freelancers).
Employee classifications affect tax, benefits and legal rights.
Full-time vs. part-time employment.
Zero-hours contracts (flexible work agreements).
Fixed-term contracts (short-term employment for a set duration).
Each type has different entitlements (for example, paid leave, notice periods).
Employers must verify employees' legal right to work in the UK:
British and Irish citizens – passport check.
Foreign nationals – visa verification through the government's online system.
Businesses must comply with the UK's minimum wage laws. Different wage rates apply based on age groups and apprentice status.
Employment contracts and statements of terms:
No legal requirement for a formal contract, but a written statement of terms is mandatory.
The statement must include salary, working hours, probation period and notice period.
Employers should provide a more detailed contract to protect confidential business information and clarify intellectual property (IP) rights.
Workplace policies:
Although not all policies are needed by law, they help reduce risk.
Essential policies include:
disciplinary and grievance policies (for managing workplace disputes)
a health and safety policy (mandatory for businesses with five or more employees)
sexual harassment and anti-discrimination policies (make sure they keep to equality laws)
Without clear policies, employers risk being hit with higher legal penalties if they become involved in workplace disputes.
Employers should define their business's mission and values.
Bringing in new hires who fit the company culture reduces turnover and keeps job satisfaction high.
Job descriptions should highlight company values to attract the right candidates.
Comprehensive job descriptions help prevent misunderstandings.
New hires should fully understand the scope of their job, their responsibilities and what's expected of them in terms of performance.
Clear communication makes future disputes around performance or behaviour less likely to arise.
Employers should hold performance discussions regularly to prevent issues from escalating.
Providing early feedback and warnings makes sure:
employees have a fair chance to improve
employers follow legal procedures in cases where they have to end a worker's employment
Poorly managed terminations can lead to legal disputes and financial penalties.
If an employee consistently underperforms, employers should:
follow proper disciplinary procedures
keep written records of performance issues and warnings
take corrective action in line with UK employment law
Want to know when and how to hire people into your business? Sign up to Talent Hub for free support with hiring staff, and recommendations on your next steps. Join now
