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  • Writer's pictureDawn Packham

Yay.... it's time to hire your first employee!!

Taking on your first employee

Setting up your own business is so exciting, but it’s also extremely hard work! Learning to do so many new ‘jobs’ that you are simply not trained for can be stressful and time consuming. You will try and test out all sorts of things before you find which will work for you and your business. And that is ok, it’s how we learn right?

However, when you grow big enough and need to start employing people, then you will not have the opportunity to trial and error with the initial basics. You must do them right and first time if you want to avoid any possible legal action.

First and foremost, think about the kind of environment and setting you want your new employee to experience and then work on creating a culture and a workplace that supports this. You may want to think about how you will welcome your new employee to the workplace. Is it fit for purpose? Do they have a dedicated space to work in? Have you set up all the equipment they will need to work effectively? Have you got the appropriate facilities in place for them to use? Have you thought about how they will be able to access you for help and support? How will you train them in their first few months?

So, what else do you need to do?

You will need to put in place all the following things:

Employer liability insurance

You will need to get Employer Liability Insurance in place before your hire your first employee. Your policy must cover you for at least £5 million and come from an authorised insurer.

This will safeguard your business against legal and compensation expenses from employee claims should they suffer injury or become ill through work.

You should display your insurance certificate in the workplace for all to see.

Contract of employment

Contracts of Employment have always been a requirement, however since April 2020, these must be issued to new employees by day one at the very latest. These documents must contain specific data as a minimum to ensure compliance with the law.

Statutory policies

When you hire your first employee, you will need to have the following policies in place as a minimum:

· Disciplinary & dismissal procedures

· Grievance procedures

· Health and Safety

Carry out right to work checks

All employers in the UK have a responsibility to prevent illegal working. Before employing anyone, you must ensure that you verify their ‘Right to Work’ in the UK. Regardless of where your employee is from, the checks must be completed and in a particular way to avoid any penalties.

The UK government determines the rules relating to these checks and so it is imperative that you follow the guidance they provide. The penalties can be extremely high and may include unlimited fines and/or a prison sentence.

Set up a workplace pension

By law, any employee who is 22 years old or over (but under State Pension age) and earns more than £10,000 a year (for the current tax year) must be entered into a workplace pension scheme.

As an employer you must have a workplace pension scheme set up ready for them, and you will need to contribute into it too.

Make a provision for employee to take holiday

All employees are legally entitled to 5.6 weeks’ paid holiday a year (known as statutory leave entitlement or annual leave).


Don’t forget to pay your employees! You must register as an employer with HM Revenue and Customs before your first pay day when you take on your first employee.

You must run and issue employees with a payslip detailing earnings before and after deductions.

Get Health and Safety in place

It is an employer's duty to protect the health, safety and welfare of their employees and other people who might be affected by their business. Employers must do whatever is reasonably practicable to achieve this.

This means making sure that workers and others are protected from anything that may cause harm, effectively controlling any risks to injury or health that could arise in the workplace.

Provide great onboarding!

Great onboarding is key to the successful integration of new employees into your team. Memorable, motivating on-boarding should be a two-way experience where the company is learning about the employee as they are learning about the company. Getting new employees hooked from the onset is the aim.

Onboarding successfully will pay dividends in terms of employee retention, productivity and engagement. New employees can be concerned, excited and aspiring to contribute to your company for the better but without an effective on-boarding programme which provides all the necessary resources and tools for professional growth, things can go wrong very quickly.

It should be, inclusive, well-planned, dynamic, personal, social, and meaningful!

Good luck!!

If you need additional support in your business to take on or get ready for your first employee, please do get in touch.

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