Taking on employees for the first time?

Expanding your business to take on employees for the first time may seem a little daunting. By following some basic steps, you can ensure you are protecting your business for the future and treating your new employees fairly and appropriately. This is something you should also do even if your first employee is a family member or friend, which is often the case with young businesses.

Check that your proposed new employee has the right to work in the UK

You should ask your potential new employee to provide you with documentation to show that they have the right to work in the UK. If they are a British or Irish citizen, then they can do this by producing their passport. A UK birth or adoption certificate, or a certificate of registration or naturalisation as a British citizen will also be sufficient proof. They should also provide an official letter or document from either a government agency or a former employer. It will need to show the potential employee’s name and National Insurance number.

In various lines of work, a DBS check will also be required, particularly in healthcare settings or where the employee will be working with children.

Put things in writing

You should give your new employee a written offer of employment. It is then a legal requirement to provide a written contract of employment within eight weeks. While verbal agreements may seem fine commercially, they are not legally compliant and will cause issues if parties fall out.

Paying your new employees

You should set up a proper payroll system, either internally or through a third-party provider. All employees are entitled to be paid at least minimum wage and to receive a regular, itemised pay statement. Remember to tell HMRC about your new employee.

What if problems arise?

Having taken on someone new, you are currently able to let them go again any time during their first two years of employment without them having any grounds for ‘unfair dismissal’, unless the dismissal might be seen as discrimination. Changes are expected in 2026 which would mean that an employee would have a right to challenge for unfair dismissal from day one of their employment.

Make effective use of probationary periods

Probationary periods are already good practice but will become increasingly important if the rules change. Although an employee who is in their probationary period is not able to claim unfair dismissal, they are still protected from discrimination. They are also still entitled to have a written contract and to be paid properly.

If in doubt, ask!

Taking on new employees can be an exciting and important move for a small business, but it needs to be done properly. Asking for professional advice at the outset will help to ensure that you are legally compliant while being able to focus your time and energy on developing your business with the help of your new employees.

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This article aims to supply general information, but it is not intended to constitute advice. Every effort is made to ensure that the law referred to is correct at the date of publication and to avoid any statement which may mislead. However, no duty of care is assumed to any person and no liability is accepted for any omission or inaccuracy. Always seek advice specific to your own circumstances. Fraser Dawbarns LLP is always happy to provide such advice.