What You Need To Know Before Hiring Your First Employee

Making your first hire is a huge milestone for all start-ups. It is often considered a mark of success for your small business, as well as an indicator of more growth and exciting opportunities to come. With this in mind, there is all the more reason that it is important you do it right. If you don’t, there is a chance you could run into financial issues or otherwise difficult situations that could impact your business’ progress and wider success.

Here is all you need to know before hiring an employee for the first time — and indeed for all the times that will follow. 

1. Be prepared to pay your employees at least the National Minimum Wage. 
2. Check if prospective employees have legal right to work in the UK.
3. Determine if you need to get a DBS check.
4. Get employment insurance. 
5. Send a written employment contract.
6. Register as an employer with HMRC.
7. Ensure your workplace is safe. 
8. Understand employee rights. 

Keep in mind that this guide will focus on employees which are different from workers. Workers are often defined as someone who does irregular or casual work for your business. The guidance for workers will differ.

For information on how to hire and retain talent at your business, read our post with Rich Thomas from Moxie - a social housing recruitment agency based in Cardiff.

1. You must pay your employees at least the National Minimum Wage. 

If your employees are aged 23 and over, and not in their first year of an apprenticeship, they are legally entitled to at least the National Living Wage of £8.91 per hour (as is the case in December 2021). For employees under 23, you can find out how much you are entitled to pay them here. 

For obvious reasons, it is essential that you can afford this before you even think about making that first hire. 

2. Check if your prospective employees have legal right to work in the UK.

All employers in the UK have a “responsibility to prevent illegal work.” You should therefore conduct a right to work check before you employ a person. You can do this by asking to view acceptable documents, like a valid passport or a document issued by the Home Office. For the full process, refer to the government website. 

3. Determine if you need to apply for a DBS check.

Employers can check the criminal record of someone applying for a role. This is known as getting a Disclosure and Barring Service (DBS) check, and it is required for all jobs where employees work with or around vulnerable groups, including children.

If you were a self-employed person working with vulnerable groups before you became an employer, you might be familiar with this process. 

4. Get employment insurance. 

You need to get employers’ liability insurance as soon as you become an employer. EL insurance will help you pay compensation if an employee is injured or becomes ill because of the work they do for you. You can even be fined for each day that you are not properly insured.

5. Send details of the job to your employee.

Otherwise known as an employment contract. An employer must give employees a written document stating the main conditions of employment when they start work. This must include:

• The employer’s name;
• The employee’s name, job title or a description of work and start date;
• How much and how often an employee or worker will get paid;
• Hours and days of work and if and how they may vary;
• Holiday entitlement (and if that includes public holidays);
• Where an employee will work;
• How long a job is expected to last (and what the end date is if it’s a fixed-term contract);
• How long any probation period is and what its conditions are;
• Any other benefits;
• Obligatory training, whether or not this is paid for by the employer. 

Other information that an employer must provide at the start of an employee’s contract is information on sick pay and procedures, other paid leave and notice periods. 

6. Register with HMRC.

You should register with HMRC as soon as you hire for the first time.  

7. Ensure your workplace is safe. 

Now the admin and employee documents are complete, ensure that your workplace is safe and accessible before an employee starts. This includes fire and health safety measures, as well as preventing discrimination and keeping employee information and data safe. You must also make your workplace accessible for employees with disabilities or health conditions.

For more on how to make your workplace more inclusive outside of these requirements, read our post here. 

8. Understand employee rights. 

Off the back of this, it is crucial that you understand your employees’ rights. As per the government’s website, these include, but are not limited to,

• Statutory sick pay;
• Statutory maternity, paternity, adoption and shared parental leave and pay (workers only get pay, not leave);
• Minimum notice periods if their employment will be ending, for example if an employer is dismissing them;
• Protection against unfair dismissal;
• The right to request flexible working;
• Time off for emergencies;
• Statutory redundancy pay. 

Keep in mind that this will all differ between businesses; this is a guide for educational purposes, but should not be your only source of information. Always refer to Gov.uk or an expert if you are unsure on what steps your specific business needs to take. 

Growing a startup isn’t easy. Our vibrant community of business owners, entrepreneurs, mentors and investors are here to help you build and scale your business - and sail through that first hire. Find out more on our website, Tramshed Tech. 

For more support with your business growth, including skills training and specialist partnership programmes, find out more about Tramshed Tech and our spaces.