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Hiring staff for the first time

The options you need to consider, and what becoming an employer involves.

There are lots of considerations that you will need to take into account when you first decide to start employing other people. Here we give an overview of some of the key points you will need to think about.



Starting out – temporary staff vs. permanent employee

There are two main capacities in which someone can start working for you.

As a “temp” from an agency
As a permanent employee

Hiring temporary staff through recruitment agencies is more expensive in the short term. However, by starting someone off on a temporary basis with a view to them eventually going permanent you can often save a lot of pain further down the line. Hiring someone on a temporary basis is a great way to find out whether that person is the right candidate for the job before handing them an employment contract. It is very difficult to fully ascertain if someone is going to be right for a role without seeing them in action first (particularly if you are not used to interviewing and hiring staff). It is far more difficult to rid yourself of a permanent employee if they are not up to scratch than it is to lay off a temp. So it’s important that you only hire someone on a permanent basis when you are sure about them. When you decide to issue an employment contract, make sure that you include an initial probationary period of at least 3 months. Hiring the wrong person as your first employee can have devastating effects on your business, so you can never be too careful.



The employment contract

As soon as an applicant unconditionally accepts your offer of employment, a contract comes into existence. This contract could be written, oral, implied or a mixture of any of these. Just because you have not issued a written contract does not mean that you are in any way exempt from the same statutory obligations of an employer. By law, you are required to supply each employee with a written confirmation of their employment, which details their main particulars within two months of their start date. We would always advise that you put in place a professionally drafted employment contract for ALL employees, no matter what. This is for your protection as much as that of the employee, as it will allow you to quickly resolve any potential disputes further down the line.



Keeping the right staff records

As an employer you have a legal duty to keep specific records in relation to your employees. Employee information must ALWAYS be handled in strict accordance with the Data Protection Act. Staff are able to seek compensation for any damages or distress suffered resulting from a breach of the Act. By law, you must keep records of the following as a minimum:

Pay rates – ensuring that you also provide your employees with payslips
Payroll – Including records of PAYE and NI deductions
Sickness of more than four days, and the amount of statutory sick pay you have paid.
Accidents, injuries and dangerous occurrences
Records to ensure that weekly and night time working limits are complied with

It is also good practice to keep records of:

Staff appraisals and training
Employment history in the business
Absences including lateness, sickness or other
Personal contact details for employees
Terms and conditions of employment

It is in your interest to keep good quality records, so try to make sure you do it properly right from the start.



Your obligations to your employees

As the employer you have certain obligations to your employees that you must meet by law. These include the following:

Duty to pay the employee the agreed amount if the employee arrives for work and is able to work.
Provide the employee with work to do, (this is limited). However, for example, if the employee is paid by commission and the employer does not give the employee any work or if not working could damage the employee's reputation, for example if you are a senior executive in a company. Then the employer may have broken their duty to the employee.
Observe Health & Safety Regulations.
Give employees correct information about rights under their contract.
Give employees reasonable opportunity to have their complaints looked at.
There is no duty to provide references to an employee. (Except where the reference is required by the Financial Service Authority.) However, if a reference is provided the employer owes a duty to the employee to make sure the reference is completed with reasonable skill and care and is true, accurate and fair. The employer also owes a duty to the receiver of the reference not to make any negligent statements about the employee.
The employer and employee also owe each other a duty of "Mutual Trust & Confidence", basically they must show respect for each other.

It is important that you meet these obligations; otherwise you could be leaving yourself open to legal action. If you are unsure about anything, we would always recommend that you talk to an employment law specialist.

If you are about to hire, or are already employing staff, we can help you. As part of our Fixed Fee Accounting Services we take care of all of your Payroll records, so you have one less thing to worry about. Payroll is arguably the largest and most time consuming part of your responsibility, so it’s important that you get it right. If you would like to read more about your payroll responsibilities as an employer, please read the HMRC payroll guidance.