Employing for the first time?
Posted on 10th January 2022 at 11:05
It can be such an exciting yet daunting moment when you are ready to employ your first member of staff. Here we have listed a brief outline of things you may need to know to make the process a little less stressful.
Firstly check your budget, employing someone is a financial obligation that you can’t afford to get wrong, check comparable wages for the skill set you are looking to add to your company and check the minimum wage for your candidates.
(Minimum wages, correct at time of posting)
Apprentice* £3.90 p/h
Under 18: £4.35 p/h
18-20: £6.15 p/h
21-24: £7.70 p/h
25+: £8.21 p/h
*Apprentices are entitled to the apprentice rate if they are either under 19, or over 19 and in the first year of their apprenticeship.
Consider if you are able to offer overtime and extra pay for bank holidays, night shifts, Christmas, and such or if you are looking to cover expenses under your company, like travel, lunch, accommodation, company car …etc.
Check HMRC guidelines to see how any of the above may affect your company and for anything you can claim back.
As an employer you will also have to understand the following entitlements:
Subject to eligibility, once an employee is off for 4 working days, they become eligible for statutory sick pay. The first three days absence is unpaid (these are called waiting days). They are then entitled to £94.25 per week (or pro rata if they have part of a week off). This continues for 28 weeks.
Full time employees are entitled to 28 days holiday a year inclusive of UK bank holidays. This is the equivalent of 5.6 weeks. Part time employees are entitled to pro rata of this. For example if they work 3 x 8 hour days a week (24 hours a week) they will be entitled to 134.4 hours holiday per year, or 16.8 days (inclusive of bank holidays).
Statutory Maternity/adoption/Parental Pay and Leave
Subject to eligibility there is certain leave and pay required to employees on maternity leave.
Employees are eligible for 26 weeks ordinary maternity leave and 26 weeks additional maternity leave.
Statutory maternity pay is paid for up to 39 weeks and is 90% of their average weekly earning for the first 6 weeks, and £148.68, or 90% of their average weekly earnings (whichever is lower) for the remaining 33 weeks.
(Statutory adoption leave and pay is the same as the above.)
If your employee decided to take shared parental leave and pay, they can end their statutory maternity or adoption leave early and switch to this. It is paid at £148.68, or 90% of their average weekly earnings (whichever is lower). Parents can share up to 50 weeks of leave and 37 weeks of pay.
Statutory Paternity Pay
If an employees partner is having a baby or adopting a baby, they may be eligible for statutory paternity pay. This is 1 or 2 weeks paid leave at £148.68, or 90% of their average weekly earnings (whichever is lower).
These payments are reimbursable via your payroll scheme (via national insurance contribution deductions) unlike statutory sick pay above.
By law, employers have to find and register for a pension scheme if any of their staff are aged between 22 and state pension age, and any of those employees earn over £10,000 per year. Anyone in the pension has to pay 5% of their pensionable earnings, plus the employers must pay 3% from the company. The duties are different depending on if you also have other staff, but the first thing will be to find and decide on a pension scheme and then declare your compliance to the pension regulator.
Once you know exactly what you are offering, it’s time to write up your contract of employment.
Be very specific over what you are looking for from your new employee, as well as what you will be providing for them. Consider notice time, sickness procedures, if you will be offering training or if they are responsible for keeping certificates up to date, GDPR and confidentiality agreements, pensions, copyrights and anything else to ensure both parties are covered for all eventuality’s. Everything you cover now can avoid disputes later on. There are many companies who offer employment contract services or you can use your solicitor.
Register yourself as an Employer with HMRC
You have to register before their first payday and it can take up to five working days to get your PAYE reference number. You can not register prior to two months before their first pay day.
For full information and to follow the link to register, got to www.gov.uk and search for ‘register as an employer’.
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