Taking on your first employee is a big step, and the admin around it puts a lot of owners off. It is more manageable than it looks. Here is what UK law actually requires, in the order it tends to matter.
Before they start
- Check they have the right to work in the UK. You must do this for every employee before their employment starts, and keep a record. Doing it for everyone, not just people you think might need it, is also how you stay the right side of discrimination law.
- Register as an employer with HMRC. You can do this once you know you are hiring, usually up to four weeks before your first payday. You cannot register more than two months in advance.
- Get employers' liability insurance. This is a legal requirement as soon as you become an employer, with very limited exceptions. The policy must cover you for at least 5 million pounds and come from an authorised insurer. Not having it can mean a fine for every day you are uninsured.
- Sort out payroll. Either set up PAYE software yourself or appoint a payroll provider or accountant. You will need to report pay and deductions to HMRC on or before each payday.
On or before day one
- Give them a written statement of employment particulars. By law the main terms, pay, hours, holiday, notice, place of work, job description, must be provided on or before the first day. Most employers do this through a written contract of employment.
- Set pay at or above the legal minimum. The National Minimum Wage and National Living Wage rates depend on age, and change each April. Check the current rate for your employee before you agree a salary.
Once they are working for you
- Provide itemised payslips. Every employee has the right to a payslip on or before payday, showing gross pay, deductions and net pay.
- Assess them for a workplace pension. Automatic enrolment duties apply from the day your first member of staff starts. If they meet the age and earnings thresholds, you must enrol them in a qualifying pension scheme and pay employer contributions. You also need to complete a declaration of compliance with The Pensions Regulator.
- Give them the statutory minimum holiday. Full-time workers are entitled to 5.6 weeks of paid holiday a year, which can include bank holidays.
- Keep pay and hours records. HMRC can ask to see them, and they protect you if a pay dispute ever comes up.
Things people worry about that usually do not apply
- DBS checks are only for eligible roles, mostly work with children or vulnerable adults. You cannot run one just because you would like to.
- A separate HR system is not required. A simple, consistent set of records is enough at one employee.
The part that is not on any legal checklist
Being compliant is the floor, not the goal. A first hire who gets a clear contract, a proper induction, and an honest conversation about what the role is will stay longer and cause fewer problems than one who is left to work it out. That is the part we spend most time on with clients, and it is what our hiring and onboarding support is built around. If you want a plain-English starting point, the free HR foundations checklist covers the basics in about five minutes.