As a new business you may work only for yourself. But once your business becomes established you may start to consider taking on employees and looking at ways in which to build on your success. As a business owner, once you start to grow your team and take on employees there are certain obligations that you will need to fulfil. Putting a new employee checklist in place can be beneficial so that you do not miss any important steps.
Here we look at employer obligations when you employ staff for the first time as well as best practice tips when it comes to growing a team.
What should your new employee checklist include when employing staff for the first time?
If you are taking on your very first member of staff, there are two key obligations that you will need to fulfil:
Inform HMRC – you will need to register as an employer with HMRC. You need to do this as soon as you start to employ staff. The gov.uk website notes you must do this even if you are only employing yourself (e.g. as the only a director of a limited company). You must register before you first pay your member of staff. But you can’t register more than 2 months before you start paying staff.
Registering as an employer with HMRC means you are able to pay the relevant tax and national insurance for your employees.
Take out employers’ liability insurance – as soon as you become an employer you will need to take out employers’ liability insurance. This is a legal requirement for all employers (some exemptions apply). You must also take out the right amount of insurance. Your policy must cover you for at least £5million and you must take it out with an authorised insurer.
Employers’ liability insurance is designed to provide cover if your business is sued by an employee or ex-employee for a work-related injury or illness.
Which other areas will you need to consider when taking on a new employee?
Other areas you will need to take into consideration when employing any members of staff, and are therefore worth including on a new employee checklist are:
Can you afford new employees? You will need to meet minimum wage requirements for your staff as well as factoring in other costs such as employers’ liability insurance, national insurance contributions, sick pay, employee pension schemes and maternity and paternity pay amongst others.
Is your employee able to work in the UK? – Once you have recruited the person you want to work for your company you will need to check that they are legally able to work in the UK before you formally employ them. Take a look at the process you will need to go through to achieve this here.
You can face penalties if you employ an illegal worker and have not carried out the right checks so you must not overlook this step.
Do you need to carry out background checks? – This is known as a DBS check and must be carried out for employees working in certain industries. E.g. childcare or healthcare.
Do you need to provide a written statement of employment? – if you will be employing someone for more than 1 month you will need to provide them with a written statement of employment. It must be provided 2 months before their start date and cover the main conditions of their employment. This article covers list of information the written statement must include.
Do you need to enrol you staff member in a workplace pension scheme? – The Pensions Act 2008 requires employers to put certain staff into a workplace pension scheme and pay into it. This is known as automatic enrolment. As soon as you become an employer you have legal duties with regards to pensions schemes. To find out more about these visit the pensions regulator website.
What are your health and safety requirements? Once you take on staff you must ensure that your place of work is safe and accessible and that you meet all your duty of care obligations. Consider areas such as health and safety, fire safety and data protection.
Best practice tips for growing your small business team and successful employee onboarding
When you are growing your small business it’s important to get things right to build the right team of people and ensure employees want to stay with your business. Some things to keep in mind include:
- Build a strong company culture that employees can believe in
- Hire the right people for the job and those that fit with your company culture
- Have a standard induction process so that all of your new starters have the same general introduction to your business and your vision for the business
- But have a personalised experience tailored to the team your new starter will be working in so that all information they get is relevant
- Set goals and objectives for the individual so they know what their role is in the team and they can start achieving and contributing to your business as quickly as possible
A time of growth for small businesses can be exciting but growing from a small to larger team can also be challenging. Making sure you have the right insurance and the right level of small business insurance in place will be one of the key areas to consider as you grow and take on additional work and responsibilities. It will also provide you with the reassurance that you need as a business owner.
At Anthony Jones we pride ourselves in giving a personalised service to all of our customers, taking the time to get to know you and your business inside out so that we can give the best insurance advice possible. Chat to us today for more on how we can help you arrange the right small business insurance for your needs.