How to Find and Hire Great Employees?

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The first step when looking to employ a member of staff is to consider the type of employee that is needed and working out if the business can afford that. The company also needs to look at what the legal obligations are as an employer. Research and data-driven personal finance website NimbleFins has advice on hiring as well as the legally required insurance needed by employers (read more about employers’ liability requirements here).

There are different types of employment such as fixed-term or temporary contracts, full-time or part-time, freelancers or volunteers. Each one comes with different rights and responsibilities for the employer.

Legal responsibilities include paying staff the minimum wage and checking if an employee has the right to work in the UK. The government has a checklist to see if a person can work in the UK.

In some cases, for certain businesses, a DBS check is needed. This, formally known as a CRB check, is a disclosure and barring check and is for anyone working with vulnerable people or in security. Basic checks show unspent convictions and advanced checks show information held by the police relating to the job as well as if the person has been barred from the type of job.

Employers also need to ensure they are complying with the law on discrimination. It is normally against the law to discriminate against a person based on:

  • Age
  • Disability
  • Race
  • Gender reassignment
  • Marriage and civil partnership
  • Religion or belief
  • Sex
  • Pregnancy and maternity
  • Sexual orientation

The Government has a webpage to help with the steps of employing staff.

Before officially hiring anyone, if the position is set to last more than one month, then the terms and conditions of employment need to be set out and sent to the prospective employee. The terms and expectations need to include:

  • Employee and employer’s names,
  • The job title or description,
  • The wage or salary,
  • The hours and location of the work,
  • Annual leave entitlement,
  • Any probation and any training required,
  • How long the employment will last, if it is a fixed contract, then an end date is needed.

Another legal requirement for any employer is employers’ liability insurance. This is a type of insurance policy to protect the business if a member of staff sues. For example, employees can claim against the company if they suffer an injury, fall ill, or their personal property is damaged, and think the business is to blame. The policy will cover the legal costs incurred when fighting against such a claim as well as the compensation payments if awarded.

If required, the business also needs to register with the HMRC as an employer and enrol workers into the workplace pension scheme.

How much does it cost to hire a new employee?

Initial costs in hiring a new employee can come from advertising the role, and then when a new staff member is chosen, there can be DBS checks and insurance costs.

A basic DBS check, disclosure and barring, costs from £23. This would provide information on unspent convictions. More information is available from more enhanced checks, but this would cost more.

Then there is employers’ liability insurance, which is a legal requirement for most businesses employing staff. The price ranges from about £60 per member of staff up to hundreds for each employee every year. The premium will vary depending on the number of employees as well as the risks involved in the workplace.

Then, depending on eligibility, employers must enrol staff in a workplace pension scheme, which includes employer contributions.

Is employers’ liability insurance mandatory?

Broadly speaking, if a business employs staff, it must have employers’ liability insurance by law. This is to protect the company from potential claims should the staff member suffer an injury at work or become ill. In addition, if the employee blames the business and sues, then the policy will cover the costs of fighting against the claim and cover the cost of compensation if the court awards it.

However, there are some exceptions to employers’ liability being a legal requirement.

Scenarios where a business can be exempt from having employers’ liability insurance:

  • It’s a family business. As long as the member of staff is close family such as spouse, parent, grandparent, children, or step and the business operates as a sole trader or partnership, a business doesn’t need to take out employers’ liability insurance. However, limited companies are required to have employers’ liability insurance, even for family members.
  • If the company employs only the owner, and that owner-employee holds at least 50 percent of the issued share capital.
  • Public organisations, such as government departments, police authorities, local authorities and nationalised industries, typically do not need employers’ liability insurance.
  • Health service bodies, such as NHS trusts, primary care trusts, and health authorities, also don’t need employers’ liability.
  • Organisations that are financed through public funds.

There are other occasions when a business may not need employers’ liability insurance. These can include:

  • If a worker does not work exclusively for the company.
  • The worker supplies most of the equipment and supplies they need to do the job.
  • A worker can hire someone else to do the work if they cannot.
  • The employee is based abroad (although insurance is needed for workers in Great Britain for 14 continuous days or seven days on an offshore installation).

More details of exemptions and exclusions from employers’ liability policies can be found on NimbleFins. In addition, the Citizens Advice Bureau or law centres can be contacted if there’s any uncertainty regarding requirements for a specific business.

Sources

  1. www.nimblefins.co.uk/business-insurance/employers-liability-insurance-uk
  2. www.gov.uk/legal-right-work-uk
  3. www.gov.uk/employ-someone
  4. https://www.citizensadvice.org.uk/about-us/contact-us/contact-us/contact-us/

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