New employers check list

Taking on your first employee can help a business grow, although it also brings a number of important responsibilities.

Before employing staff for the first time, business owners should consider the following points:

• Register as an employer with HM Revenue and Customs before the first payday.
• Set up a payroll system capable of operating PAYE and filing Real Time Information reports with HMRC.
• Check whether workplace pension auto-enrolment rules apply and ensure that pension responsibilities are understood.
• Prepare written contracts of employment setting out pay, hours, holiday entitlement, sickness arrangements and notice periods.
• Make sure you are aware of, and comply with, the National Living Wage and National Minimum Wage regulations.
• Confirm that employees have the legal right to work in the UK and retain copies of supporting documents.
• Arrange employers’ liability insurance, which is normally a legal requirement for businesses employing staff.
• Budget for the full cost of employment, not just salary. Employers should also allow for National Insurance, pension contributions, holiday pay, training costs and equipment.
• Decide how wages and expenses will be paid and ensure that sufficient business cash flow is available each month.
• Put in place procedures covering sickness reporting, holidays, disciplinary matters and employee records.
• Consider whether health and safety requirements apply to the workplace, particularly where employees will use machinery, vehicles or specialist equipment.
• Review whether additional software, office space, telephones or IT systems will be needed as staffing levels increase.
• Ensure that employee data is handled securely and in line with UK data protection requirements.
• Plan induction and training procedures to help new employees settle into the business quickly and productively.
• Review pricing and profitability regularly, as employing staff often increases fixed monthly overheads.

Careful preparation before employing staff can help reduce administrative problems, improve compliance and support the long-term growth of the business. If you need help integrating any of these points, please call, we can assist you.