There's a lot to consider when hiring employees and it can be a daunting process. Lay the foundations for a mutually rewarding relationship and feel secure by using the correct documents when making your first hire.
Start the employment hiring process off with a clear Job description or specification. Take care not to use discriminatory wording and make sure to list the skills and abilities you need for the role. Use an Offer of employment letter to set out the terms of employment clearly and deal with employment pre-conditions. Ask your new hire to sign a Contract of employment to finalise acceptance of the offer of employment and avoid legal disputes in the future.
Make sure the Job description states the skills and abilities required for the role. It should also refer to general responsibilities so the description will still apply, even if the role changes slightly over time.
Don't use discriminatory wording - it is illegal to discriminate against potential candidates on a number of grounds, including gender, sexual orientation, age, nationality, race, disability or religion.
Make sure your new hire is not in breach of a notice period or a non-compete restriction imposed by their previous employer. Otherwise, you too may be liable.
Take care to comply with the rules on pre-employment checks, data protection law and ask certain questions. These can include questions about the candidate's health, previous criminal convictions and other types of vetting.
Check whether or not your potential hire is entitled to work in the UK. You could face prosecution if you employ an illegal worker. The UK Border Agency has a useful guide on how to do this.
Provide a clear statement of key job terms and point out employment pre-conditions such as verification of qualifications and references by creating an Offer of employment letter. This will precede or compliment the contract of employment.
You may wish to consider types of employee benefits, holiday entitlement and pension rights when making an offer of employment. When you hire staff you must make sure that you pay at least the national minimum. For further information, read Minimum wage.
A Contract of employment is an agreement between an employer and employee setting out the main terms of employment. These will set out the rights and duties of both the employer and employee. An employer is legally obliged to send an employee a written statement of employment within two months of starting work. Creating a contract of employment will help to avoid legal disputes.
If hiring a mid-level or junior employee, a standard Employment contract will be most suitable. There are certain circumstances where a more specific document may be appropriate. Use the most suitable document for your new hire.
If hiring a freelancer, contractor or consultant a Consultancy agreement is likely to be the best document to use. These types of hires are generally 'self-employed' so require special wording to align with this in their agreements. For more information, read Consultants, workers and employees.
Zero-hours contracts can be used to hire workers on an ad-hoc basis. The types of employment contracts are a casual agreement between an individual and a business where the worker works as and when the business needs the labour. The business does not guarantee any set hours and the worker is not obliged to work any hours offered to them. Zero-hours workers are given fewer employment rights than employees but are still entitled to some basic rights such as minimum wage and annual leave. For further information, read Zero-hours contracts.
A senior employee or executive director may require a contract of employment with more detail and security for the employer as they will likely have more responsibility than your average employee and will have access to more confidential information. A Senior employment contract or director's service contract may be useful in these circumstances.
Non-executive directors are appointed using a Letter of appointment (LOA), which sets out the terms of the appointment. Non-executive directors do not perform the day-to-day functions of running the business and normally work only part-time.
Probation periods are a normal part of the hiring process to allow new employees and the company to see whether they would be a good fit for the business. It provides a useful framework for the employee to experience what kind of responsibilities and obligations they have to the company. It also allows for the employer to see whether they want to commit to a permanent and long-term employment relationship with the new hire. Probationary periods are not a requirement under the law and the employee is still entitled to all the same benefits such as minimum national wage, annual leave, sick pay and the right to the statutory minimum notice period. Once the employee has completed their probation period, consider using a Probation letter to confirm the end of their probation period and whether they have passed their probation period successfully or unsuccessfully. For further information, read Probationary periods.
Check if your new hire will be working more than 48 hours per week. If it's likely that they'll be working for more hours than this, then ask them whether they'll agree to opt-out of the maximum 48 hour week by signing a Working time directive opt-out letter. You can't force an employee to opt-out of the Working Time Directive and they will need to freely consent.
For further information, read How to opt-out staff from the 48 hour week.
All employers of staff based in England, Wales and Scotland must, by law, purchase Employer's Liability Insurance coverage of at least £5 million.
You must register with Her Majesty's Revenue and Customs (HMRC) when you employ someone with very few exceptions.
For further information, read Business insurance.