Becoming an employer: What you need to know

Setting up a business can be an exciting challenge, but taking on your first employees will bring new responsibilities and legal obligations that will require careful consideration before you proceed.

When you’ve reached the stage of taking on your first employees your initial consideration will need to be the type of worker most suitable for the work that you need doing.

You will need to ask questions such as:

• What does the job require?
• How many employees are you likely to need?
• Is it likely to be a long or short term need?
• What level of skills does the job require?

There are many different types of employee, with different levels of expertise, from the apprentice to the freelancer, or the fixed term employee to the permanent, choosing the right option will depend on your company needs.

Your legal responsibilities to your workers will vary depending on the type of worker that you hire. For example, you obligations towards a permanent member of staff will be far greater than your obligations towards a freelancer. Nevertheless, there will be certain things that you will need to supply for every worker, including but not necessarily limited to:

• A safe and secure working environment.
• Relevant minimum wage.
• Regular rests and breaks.
• An average working week of no more than 48 hours (in the UK).
• A minimum amount of paid holiday leave.
• Maternity and adoption leave where appropriate.

You will need to do a number of pre-employment checks to ensure that all workers are legally permitted to work, and you may also need to carry out a Criminal Records Bureau check or verify potential employees’ qualifications for certain types of work. Other things that you may need to think about include:

• Taking out employer liability insurance in case your employees are injured at work.
• Setting up disciplinary and grievances procedures.
• Pension requirements, particularly in light of new laws introduced from 2012.

In addition to your responsibilities towards your employees, you will also need to take steps such as registering with HMRC as an employer and set up payroll, income tax, and national insurance deductions. Your accountant will normally be able to help and advise you on your tax and payroll responsibilities as an employer.

Taking on employees for the first time is not something that can be taken lightly, and it can be a complex process. Nevertheless it can also provide the skill support and manpower that your company needs  in order to grow. With careful research, planning and taking advice where appropriate taking on employees could prove to be a huge step forward in building a successful business.

John Hughes writes for Juniper chartered Accountants

Tagged accountant, Business, employee, employer, how-to, wage