When looking to build the team within a business and take on new members of staff, one of the first questions that requires great consideration is ‘what are my obligations as an employer?’ For some, the long list of legal requirements is overwhelming, but getting the right documentation and processes in place can save a lot of time and money and ensure that businesses are complying with the law.
Further to this, taking care of staff and fulfilling their rights will make for a happier and more productive workforce, as well as helping to retain the best talent. Below are some of the key requirements employers must have in place when employing any number of staff:
Contract of employment
One of the most important pieces of documentation an employer is required to have in place is the contract of employment. Employees must be provided with the written terms of their employment within eight weeks of the commencement date. It should cover areas of employment such as rates of pay, notice periods and working hours.
By law, all employees are entitled to minimum notice periods, holiday entitlements and statutory sick pay – regardless of whether these have been included in the contract. The contract should therefore be seen as an opportunity for the employer to set out workplace standards and expectations and to ensure it has all of the protections it needs against possible employment dispute situations such as unfair dismissal claims. Things such as probationary periods, confidentiality obligations, the right to recover overpayments or training costs and, for more senior employees, post-termination restrictions are all things which are not put in place automatically by law but which can all be included in employment
Rate of pay
From day one of employment, employers are obliged to pay their employees a wage of at least the minimum level of the National Minimum Wage for the employee’s age group. It is important to note that from April 2016, workers aged 25 and over will be entitled to a slightly higher rate of pay, known as the National Living Wage. This will be a new premium which is added on top of the National Minimum Wage and will initially be set at a rate of £7.20 per hour but will increase to £9 an hour by 2020. The rate of the National Minimum Wage and National Living Wage increases each year so employers will need to ensure that they are continuing to meet these wage requirements.
Statutory sick pay
All entitled employees are to receive statutory sick pay from the fourth consecutive day of absence that is due to sickness. The current rate of statutory sick pay is £88.45 per week and employees are entitled to receive up to 28 weeks of this payment in any period of sickness absence – or series of absences where there are multiple instances with less than eight weeks between them. When an employee has been absent for seven consecutive days or more, employers can ask for appropriate evidence of sickness such as a doctor’s note.
The way holiday entitlement is described will depend on the working hours of the business. For example, every employee who works five days a week should receive a minimum of 28 days holiday (5.6 weeks’ holiday each year), and this is inclusive of bank holidays. So for those businesses that are closed on bank holidays, it is common to describe holiday entitlement as being 20 days plus the eight usual bank holidays each year. If staff members are not specifically entitled to bank holidays off work, they simply need to be given their overall minimum entitlement. Employees must receive their normal pay during holidays.
Minimum notice periods
Should the time ever come where a staff member’s employment is terminated, the employee is entitled to a minimum period of notice. For the first two years of employment, this is one week’s notice but this increases to two weeks after completing two years of employment. Employees are entitled to an additional week after every complete year of service, up to a maximum of 12 weeks. If an employee’s contract of employment entitles them to greater notice, then that will take precedence.
Karen Bexley is partner and head of employment law at leading commercial and private client law firm, MLP Law