Hiring your first employee

Before they start

Check their right to work in the UK. This is not optional and the civil penalty for getting it wrong is substantial. Check the original documents or use the Home Office online service, and keep a dated copy.

Register as an employer with HMRC. Do this before the first payday, and allow time, because it is not instant.

Get employers liability insurance. It is a legal requirement from the day someone starts, the fines are per day uninsured and the certificate must be accessible to staff.

Agree the pay, hours and start date in writing. Check the current National Minimum and National Living Wage rates for their age band, since they change every April and apply automatically.

The written statement

Every employee and worker is entitled to a written statement of employment particulars on or before their first day. Not within two months, on day one.

It must cover pay, hours, holiday, place of work, job title, start date, notice, probation, sick pay and any training entitlement.

You do not need a lawyer to draft a first one. ACAS publish templates that meet the requirement and are written in plain English.

Whatever you use, read it before you send it. A contract you have not read is a contract you cannot enforce with a straight face.

Pensions, holiday and payroll

Automatic enrolment applies to employers, and there are duties even if the employee turns out not to qualify. You must assess them and complete a declaration of compliance. The Pensions Regulator writes to you about this and the deadlines are real.

Statutory holiday is 5.6 weeks a year including bank holidays for a full-time worker, pro rata for part-time. Get the calculation right for irregular hours, which is where most small employers go wrong.

Run payroll properly from the first payday, reporting to HMRC on or before you pay. For one employee, payroll software or a bookkeeper costs very little and removes an entire category of risk.

Keep the records. Pay, hours, holiday taken and right to work checks all need to be retained.

The operational part everyone underestimates

Two people and one diary is a coordination problem from week one. Double bookings, gaps nobody noticed and arguments about who was meant to be in on Saturday all start immediately.

Decide before they start who can see what. A new starter does not need access to your full client list, your takings or everyone's notes, and setting that boundary later feels like an accusation.

Agree how their availability and time off gets requested and recorded. Verbal arrangements between two people stop working the moment there are three.