Top 10 Things You Must Do When Hiring Your First Employee


Hiring your first employee is a key milestone. You will be handing over some job responsibilities to the new employee. This is a good thing, as you will be assisted in business operations, particularly if you hire staff for senior positions such as marketing director roles. However, as the employer, you have to recognise your obligations and responsibilities will increase.

The following are the 10 things you must know when hiring your first employee.

1. Conduct Applicant Checks

After you have settled on the best candidate for the vacant job position you advertised, you have to conduct background checks to ensure the prospective hire a) is legally valid to work in the UK, and b) meets any other standard checks that are necessary for the new role especially a criminal background check (for instance, a DBS check is critical if they will be involved with children at any level).

2. Provide a Statement of Employment

It is mandatory that you provide a written statement of employment to any person that will be working in your organization for one month or more. This document, which is sent to the employee, lays out the terms of employment and must be issued within two months of commencing the job.

3. Every Employee Must Have an Employment Contract

All employees you hire must enter into an employment contract which states their rights, responsibilities and the working set-up. It is not mandatory that this be a formal registered document. Implied conditions, as well as explicit ones, can be used.

4. Make Certain That Your Business Is Protected through Insurance

Get a cover to protect your enterprise from claims pursued by employees who experience injuries or fall ill when on the job. The only time you can ignore taking up insurance is when you do not have employees (for instance, you run a company alone where you personally provide services to clients) or your workforce is comprised of close family members only. In any other case, you must pay for EL insurance due to the conditions set out in the Employers’ Liability (Compulsory Insurance) Act 1969.

5. Register as an Employer with HMRC

Within four weeks of hiring your first employee, you are required to register as an employer with HMRC. You are obligated as the employer to pay your staff the salary agreed in the contract, deduct Pay As You Earn (PAYE) and National Insurance Contributions from employee remuneration.

6. Paying Your Employees

When you remunerate your employees, you must offer each employee their payslip which outlines their gross and net earnings, PAYE (income tax) and Insurance Contributions deducted as well as any other deduction on earnings such as pension contributions. Since the rollout of the RTI (Real Time Information) system in 2013, it is mandatory that you forward payroll information to HMRC after each salary payment to employees. Before implementation of this regime, this data was submitted annually at the end of the tax period.

You must adhere to the National Minimum Wage Guidelines. All your employees must earn at least the minimum rate as per the law.

7. Be Aware of Your Health & Safety Obligations

As the employer, it is your obligation to provide employees with a safe, secure and healthy environment to work in. A written health and safety policy is only compulsory if you have at least five employees. However, it is always important to assess the health and safety risks that staff can encounter in the workplace.

8. Pension Auto-Enrolment

New laws that have come into effect make it compulsory for employers to register their employees into a workplace pension if they receive a salary greater than £9,440 (2013/14 tax year) or are at least 22 years of age. The rule initially applied to large businesses and was meant to be implemented by small businesses from 2018.

9. Consider Holiday, Sick Pay, Maternity/Paternity Pay Regulations

There are many laws that give employees the right to take leave from work for holidays or due to forced absences such as the birth of their child.

10. What Happens If Things Do Not Pan Out as Expected?

This is a tricky area in employment circles due to the complexity of what occurs when an employee is no longer needed by the employer. If you bungle the discharge from work or an employee quits on grounds that you violated the agreement with them, a disgruntled former employee can opt to report your enterprise to an employment tribunal.

These tribunals settle disputes related to disagreements over remuneration, reasons and events behind firing from work or discrimination claims at work.