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3 critical mistakes when hiring staff for the first time

Tuesday, 16 August 2016

Business people waiting for job interview. Four candidates competing for one positionFor most start-ups there comes a time where it becomes very clear that support is needed. It might be that you are losing work to competitors because you don’t have the time to take on new contracts, maybe you’ve identified an opportunity to diversify, or perhaps you want to improve on the service that you are providing to your existing customers by dedicating more time to them. Whether through hiring someone to answer telephones, work the books or a full on recruitment drive to fill a number of departments, developing a team of people to work alongside you can help push your business forward. However, if you are planning on hiring then it is important that you are aware of not only your legal obligations as an employer, but also some common pitfalls that catch out first-time employers.

1 – Failing to do your homework

When hiring an employee it’s easy to get caught up on first impressions. A well groomed employee with a firm handshake and charming persona might make an instant impact on you but you need to look beyond likability when hiring and do your background checks. As an employer in the UK you are obligated by law to check that an employee has the right to work in the UK and failing to do so can lead to fines and even prison sentences. Depending on the nature of your work, such as if you work in the care industry or with children, then you may also need to have a DBS criminal record check conducted before you can offer employment. Outside of your legal obligations you also need to research their employment history and get a good idea of their character. While it is common practice to ring around previous employers to find out more about your candidate and confirm their CV information, many employers now admit to ‘Googling’ their candidates too. As many as 36% of employers  say that they have turned down candidates after looking at their social media profiles and finding something that they didn’t like.

2 – Not knowing your obligations as an employer

Your employees are entitled by law to receive fair compensation for their labour under the National Minimum Wage and National Living Wage, updated details of which can be found here: https://www.gov.uk/national-minimum-wage-rates. If you fail to pay the minimum wage then you could be served a notice of underpayment. This will require you to pay arrears and sometimes penalties for each worker that you have underpaid.

Employees have a duty of care which means that they are obliged to take all necessary steps to ensure the health, safety and wellbeing of their employees. You are required to give your employees a safe work environment, with clearly defined roles, provide adequate training and feedback, provide areas for rest, protect staff from bullying and harassment or discrimination, offer a way for them to raise grievances and consult employees on any issues which may affect them.

Under the Equality Act 2010 you also have a responsibility to make sure that disabled candidates or employees are not placed at a disadvantage.

With the number of people in the UK working into old age increasing every day, the law now requires that every employer in UK puts certain staff into pension schemes and contributes towards it themselves – under the new ‘automatic enrolment’ plan. These rules apply to all employers with at least one member of staff. More information can be found here.

Another legal requirement that would be a mistake for businesses to overlook is Employer’s liability insurance. A legal requirement in the UK with fines of up to £2,500 per day, employer’s liability insurance protects against any injuries or illnesses that employers develop as a result of working at your business. Businesses are required to have this insurance in place at a level of at least £5 million; however you may be exempt, for example if you are operating as a sole trader.

3 - Failing to provide a written statement of employment

When you find an employee suitable for your business you are required to give a statement of employment. We regularly hear horror stories of businesses who have had an employment relationship turn sour and been left with no option for recourse as they have failed to put provisions in place. If no statement of employment is in place then often legal outcomes are favoured in the weight of the employee, rather than the employer. By having an experienced solicitor prepare a comprehensive statement of employment, you can guard against every eventuality. Here are some examples of what may be covered in your written statement of employment:

  • Description of work
  • Start dates and end dates
  • How much and how often an employee will get paid
  • Working hours (including details of overtime and shift patterns)
  • Holiday entitlement
  • Location (s) of work / relocation
  • Notice periods
  • Collective agreements
  • Pensions
  • Grievance process
  • How to complain about a disciplinary or dismissal decision

When hiring for the first time it is critical that you find someone that fits the culture of your company, however it is equally important that you consider your duties as an employer. If you would like help drafting a statement of employment then please contact Rollingsons on 0207 7611 4848 to arrange an initial consultation, or click here to read more about our employment law team.

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