All you need to know about employing staff for the first time

There are a number of things to think about when you are employing staff for the first time. You need to consider:

1. How much you will pay them

You must pay them at least the National Minimum Wage. Employees who do not receive the National Minimum Wage may bring a claim against their employer in the employment tribunal. It is also a criminal offence not to pay someone the National Minimum Wage or to falsify payment records.

The National Minimum Wage is currently £6.19 per hour before deductions, for those aged 21 and above. There is a rate of £4.98 per hour for those aged 18 to 20, and for workers in the first six months of a new job with a new employer who are doing specific training.

People aged 16 and 17 are entitled to a rate of £3.68. Those on apprenticeships who are either under 19 or in the first year of their apprenticeship are entitled to a minimum wage of £2.65 per hour. 

Those working and living as part of a family are not entitled to the minimum wage.

2. Check that someone has a legal right to work in the UK

Someone who is subject to immigration control must obtain a work permit before working in the UK, unless they belong to a category of people who don’t need one.

For further details about work permits, contact the Work Permits UK Helpline on 0300 123 4699.

It's a criminal offence (punishable by a fine of up to £5,000) to employ a person without immigration authorisation to work in the UK. 

The Home Office has published guidance for employers, which is available by telephoning 020 8649 7878.

3. Get employer’s liability insurance

It must cover you for at least £5 million and be with an authorised insurer.

4. Register with HMRC and pay your employee

Most employers can register online, but some will need to register by telephone, email or with an HMRC office. See HMRC's web page 'How to register as an employer' for more information. 

Once you’ve registered with HMRC they must then apply the rules of deducting tax and National Insurance properly. You should get payroll software or use the facility on the HMRC website

Employers should be given a tax code by the new employee and, armed with a computerised program, this should be relatively easy. 

Finally, an itemised pay statement must be issued to all employees at the time of payment and must include the gross earnings; net pay; fixed and variable deductions from gross earnings; and if the net pay is paid in different ways, the amount and method of payment of each part payment. 

Employees may raise a complaint with an employment tribunal if the employer fails to issue a pay statement or if the content is in dispute.

5. Send details of the terms and conditions of the job to your employee

If you employ someone for more than a month, then you need to give them a written statement of employment within two months. It will have the main terms and conditions in it.

If you want more in-depth information – from an employment lawyer - about what to include in a written statement of employment, then read our guide Employment Law Made Easy. Packed with tips and expert advice on complying with employment legislation.

Other information


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Published on: January 28, 2013

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