You are the boss. Now what?
So, that moment has come when not only do you have your own business, but you have actually reached the point of employing people as part of your team. And we are fairly certain that whatever your passion is, it is not the paperwork behind being an employer!
That aside, there are some core obligations that you need to meet before you carry on with growing your company. Below are the 6 key points you need to cover off.
- Can you prove that they are allowed to work for you?
You need to be able to prove that anyone you employ has the legal right to work in the UK. You need to see an original version of a required document that you take a copy of and keep on file and are able to produce if requested to do so by the Home Office. Brexit has resulted in some recent changes so be sure not to rely on what might be outdated advice or assumptions but to check the correct guidance – Right to work checks: employer guidance – GOV.UK (www.gov.uk)
- Are you paying them the right amount of money?
Staff costs can often feel like an enormous part of your outgoings. You have to consider the market rate and what your business can afford when setting a salary level, but it is also imperative that you meet your obligation to pay at least the minimum wage and this will vary depending on the age of your new recruit – The National Minimum Wage and Living Wage – GOV.UK (www.gov.uk)
- Does the tax man know about your new recruit?
As an employer you will need to make employer National Insurance contributions – you will also need to deduct employee NI contributions and tax from the money you pay your employee and pass it on to the tax man. All of this can be managed through your payroll which your accountant will be able to run for you and will involve registering with HMRC – Register as an employer – GOV.UK (www.gov.uk)
- Do you have a pension provision?
Depending on the age and earnings of your employees, it is very likely that you will be obliged to enrol your employees in a pension scheme and make employer contributions to the pension fund on their behalf. No one is expecting you to establish a pension fund on top of everything else – the government has created a fund for small employers to use – Auto Enrolment Guidance for Employers | Nest Pensions. This is also something that your payroll provider / accountant will be able to help you with.
- Are you insured to be a boss?
Rarely but sometimes employees may be injured or will become ill because of the work that they do for you, so one of the obligations on you as an employer is to have Employer Liability Insurance cover of at least £5m. This obligation is taken very seriously and failure to have the proper insurance can make you liable to a fine of £2.5k per day you are not properly insured. A quick google search will provide you with a list of providers that you can use – make sure they are reputable.
- Do you have a contract with your employee?
Gone are the days of a handshake to agree the working arrangement between two parties, now as a boss you must provide your employees with a written statement of employment (a contract to you and me) on their first day of employment. You are required to cover off a number of topics – rate of pay, holidays, sickness arrangements, notice periods etc. This is Cajun’s bread and butter, so let us know if you need some help with this.
There will of course be other matters around health and safety and general policies, and these should be your next step to look at and address once you’ve ticked the list above (and we can help with this too), but you are getting your HR house in order and treating your team professionally which will be both appreciated by them and give you peace of mind.