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Employing Staff: Your responsibilities

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Employing staff is a big responsibility and taking on your first member of staff is a big step. As well as being an exciting stage in the development of your business, it also comes with extra responsibilities. What steps do you need to make sure you follow when taking on your first employees?

Setting Wages

Paying a new employees wages will be an extra expense for your business, so you need to make sure that your budget allows for this. You should research the local market and set wages that are appropriate for the area and level of employment. However, you must ensure that you pay employees at least the National Minimum Wage. This covers most employees and is still applicable to small businesses. Currently those over the age of 21 must be paid at least £6.19 per hour or the equivalent if wages are calculated differently. As of 1st October 2013, this rate will increase to £6.31 per hour. Different rates apply to those under 21 and apprentices.

Employing staff: Your responsibilities

Employment Checks

It’s important when you’re recruiting staff that you check their eligibility to work in the UK. This may seem easy, but it’s important that you qualify everyone, not just those from outside the UK. As part of the application process you should ask for original documents, such as a passport or official permit, that states they’re a British, EEC or Swiss citizen, they have residency in the UK or that they’re allowed to stay indefinitely in the UK. If you’re in any doubt about the eligibility criteria you should seek expert advice. Those businesses that don’t comply could face up to a £10,000 fine or be prosecuted.

Adequate Insurance

Once you start recruiting staff you need to have Employers Liability Insurance that covers you for at least £5 million. This will protect you against any compensation claims from employees due to injuries or illnesses they’ve sustained as a result of their work. It’s important that your policy is from an approved insurer, otherwise it won’t be valid. The Health & Safety Executive can fine businesses £2,500 for each day that they aren’t adequately insured.

Confirming Employment

Once you’ve informed an employee about their role you must provide them with written details and the terms and conditions of the role. This contract will include the employment conditions, rights, responsibilities and duties. If the role is for longer than one month, you must also send them a written statement of employment within two months. This will set out their hours of work, rate of pay, pay date, holiday entitlement, business location, notice period, pension and the complaints process.

Employing staff: Your responsibilities

Register with HMRC

You also need to register as an employer with HMRC. You should do this as soon as possible, as the process can take some time. The earliest you can do so is 4 weeks before the first pay day. Most employers can use the online tax registration service, which will allow you to register as an employer and for the PAYE online service at the same time. Once you’ve completed this, HMRC will send you details of your PAYE and Accounts Office references. You must report your payroll information online to HMRC on or before each payday.

Paying Staff

Each time you pay your employees you need to give them a pay slip detailing their wages and deductions, such as tax and National Insurance. At the end of the tax year, each employee must have a P60, which is a summary of their pay and deductions for the year. These must be completed by 31st May.






About Catherine Stern

About Catherine Stern

Catherine Stern is a freelance writer with a background in marketing and PR. She currently writes web content on a range of subjects, from finance and business to travel and home improvements. As a working single mum of two young boys she understands the pressures that today’s working parents face and the topics they want to read about.

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