As a business owner, you must ensure you follow the correct procedure when recruiting new staff members. Recruitment can be an exciting time, often indicating that business demand is increasing. However, new employees are a commitment, and as an employer, you must carry out specific legal procedures as part of the recruitment process. Therefore, when you realise that you may need to create a team in your business, you should understand the legal steps to take as part of the hiring process. Mistakes in the recruitment process may cause problems for your business. For example, you may face a civil or criminal penalty if your employee does not have the right to live and work in the UK and you did not carry out the relevant checks. This article will outline key steps when recruiting staff in the UK.
1. Is Your Business Ready?
The first step in the recruitment process is double-checking that your business is ready to employ staff. This involves:
- deciding on the employment status of your staff, such as employees, workers or self-employed contractors;
- deciding what type of employees you need, such as full-time or part-time;
- checking that you have the financial resources for new employees, which will require you to be aware of employment rights, like the National Minimum Wage and statutory sick pay;
- ensuring your workplace is physically ready for staff in terms of accessibility and safety, for example, health and safety and obtaining employers liability insurance; and
- registering as an employer with HMRC, which includes setting up your PAYE and deciding how to run your payroll.
2. Time to Recruit
Now that you have prepared your business physically and administratively to employ staff, you can start recruiting potential employees to find the right person for the job.
During this hiring process, you must ensure that you do not discriminate against potential candidates and allow people with disabilities or health conditions to access your recruitment process. Discrimination based on one (or more) of the nine protected characteristics is unlawful. The protected characteristics under the Equality Act 2010 are:
- race;
- disability;
- religion or belief;
- sex;
- pregnancy and maternity;
- sexual orientation;
- age;
- gender reassignment; and
- marriage and civil partnership.
You may wish to advertise as part of your recruitment process. For example, you may utilise social media to find employees. Advertising when recruiting can help to engage a broader range of applicants, aiding you in finding the best candidate.
3. UK Working Rights
Once you have completed the recruitment process and have potential candidates for your job roles, you must check that you can legally employ them. As such, the next step in your recruitment process is to check whether candidates have a right to live and work in the UK. If the candidate does not have UK working rights, you cannot employ them.
Checking whether or not potential employees have the right to live and work in the UK can be done online using their share code or by checking their documents. Failure to confirm working rights may result in your business facing a civil or criminal penalty.
4. Disclosure and Barring Service Checks
Depending on the type of business you run, you may need to carry out a Disclosure and Barring Service (DBS) check when recruiting staff. A DBS check examines if your candidate has a criminal record. A DBS check will be necessary, for example, if you work with vulnerable adults or require your employees to work with children.
The four types of checks you can carry out include the following:
- basic check;
- standard check;
- enhanced check; and
- enhanced check with barred lists.
Notably, there are different rules for getting a criminal record check in Scotland and Northern Ireland.
5. Workplace Pension
As soon as your employees start working for you, they may need to be automatically enrolled into a workplace pension scheme. Employees are eligible to be automatically enrolled if all of the following apply:
- the employee is classed as a worker;
- they are aged between 22 and the state pension age;
- they will earn a minimum of £10,000 per year; and
- the employee will usually ('ordinarily') work within the UK.
Where your employees are eligible to be enrolled into a workplace pension scheme, you must do this as soon as possible and begin making contributions to their pension.
6. Employment Contract and Salary
As soon as you offer a job to someone and they accept the offer, you form an employment contract with them. It is a legal requirement for employers to provide a written statement of particulars to new staff setting out the terms of their employment. You must issue this statement to the new employee on or before their employment commences.
As part of forming the employment contract, you will need to decide a salary for your employee. This requires you to comply with the National Minimum Wage legislation, which shows the minimum rate of pay will vary depending on the age of your employees.
7. Notify the HMRC
Before your new recruits begin working for you, you should inform HMRC about them. You must register them using a full payment submission (FPS). Before doing this, you will need to:
- check their tax code by looking at their P45 or using HMRC's starter checklist;
- check if they are required to repay a student loan; and
- set them up in your payroll software.
Key Takeaways
Recruiting staff is a significant step for your business and requires you to carry out key steps before formally employing someone. For example, you need first to ensure that you are, in fact, ready to recruit staff, and once you have found a potential candidate, check they have the right to live and work in the UK. Also, as part of your recruitment process, you must ensure that you do not discriminate against people. Once you are ready for your staff to start work, ensure that you have carried out legal processes, such as letting HMRC know about your new staff.
