Taking on staff: An overview of important regulations

Employing people can be a regulatory minefield. Get help with our in-depth guide

If you are employing staff for the first time or if you are in any way unsure, check out our list of what your employees are entitled to. If in doubt, check with the Department for Business, Innovation and Skills. The penalties for getting it wrong can be quite severe. Some of these issues are covered in more detail in separate articles and we will bring you updates on any changes that could affect your business as they come up.

Equal opportunities

Race, sex and age: Jobs, training and promotion must be open to all regardless of colour, race, nationality, ethnic or national origin, sex, age, marital status and to anyone intending to undergo, undergoing or who has undergone gender reassignment.

Disability: It is unlawful for any employer (apart from the Armed Forces) to discriminate against a disabled person because of their disability. The law says that an employer cannot discriminate either directly or by failing to make ‘reasonable adjustments’ for a disabled person in the recruitment process; in their terms and conditions of employment; in chances for promotion, transfer, training or other benefits; by dismissing them unfairly; by treating them less fairly than other workers; by subjecting them to victimisation or harassment.

Terms and Conditions of Employment

If employed for more than one month, employee must receive (within the first two months) a written statement of main employment particulars. Statement must include main terms and conditions including pay, holidays, details of notice and disciplinary procedures.

Transfer of an undertaking

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Employees terms and conditions are preserved when a business (or part of one) transfers to a new employer. Employers are required to consult either representatives of an appropriate recognised trade union or elected representative of any employees affected.

Fair and unfair dismissal

If an employee has at least one year’s service, the right to complain of general unfair dismissal applies.

Period of Notice

For continuous employment of more than one month but less than two years, one week’s notice must be given unless a longer period is stated in the employment contract.

For continuous employment of two years or more, at least two weeks’ notice must be given unless a longer period is stated.

After two years employment, one additional week’s notice for each further complete year is required. After 12 years continuous employment a minimum of 12 weeks notice is required.

An employee is required to give his or her employer at least one week’s notice if employed continuously for one month. This minimum is unaffected by longer service, however you may ask for longer in their contract.


Employees have the right to belong or not belong to a union, and the right not to be refused employment on the grounds of trade union membership or non-membership.


Under 20 employees – no obligation to notify the Department for Business of redundancy or consult with workplace representatives

20-99 employees – at least 30 days’ notification

Above 99 employees – at least 90 days’ notification

An employer who proposes to make redundant at least 20 employees at one establishment over a period of 90 days or less is required to consult either representatives of a recognised independent trade union or other elected representatives of affected employees.

Although an employer making less than 20 employees redundant is not legally obliged to inform and consult with those employees, failure to do so could result in a claim being made for unfair dismissal.

Illegal workers

You can face a criminal prosecution if you employ illegal workers and haven’t made certain checks on new employees, such as seeing a P45, P60 or payslip showing an NI number – or one of a range of other specified documents. Copies need to be retained in most cases.

National minimum wage

The minimum wage is £6.08 an hour, or £4.98 an hour for 18-21 year olds. You can get more information about the national minimum wage by clicking on the link above.

Pay and tax

You must inform the HMRC when you take on your first employee. They will set up a PAYE scheme and send you a new employer’s starter pack. Obtain a P45 from each employee or complete a P46. Make the necessary deductions and send them in monthly.

All employees must be given itemised pay statements showing deductions. National Insurance is payable for employees aged 16 or over and earning more than £139 per week (As of tax year 2011/2012).

Statutory sick pay

If the employee is sick for less than four consecutive days, no action is needed. If the employee is sick for more than four days, and is entitled to SSP, pay sick pay in the same way as wages and keep records of payments made and dates of sickness absence. If the employee is sick for more than four days, and not entitled to SSP, the employee may claim state incapacity benefit instead

Statutory maternity pay

Employees can claim SMP if on the fifteenth week before their baby is due they have been in your employ for more than 26 weeks. They can choose to take it from the eleventh week before the baby is born.

Employees must tell you at least 28 days before they intend to stop work, you are should get them to make this request in writing. They must also provide you with evidence of when their baby is due. This is normally on maternity certificate MATB1. The earliest that this certificate may be issued by your doctor or midwife is 20 weeks before the week in which your baby is due. You should receive this no later than three weeks after the date their SMP begins.


Working hours are limited to an average of 48 hours a week, though workers can choose to work more if they want to.

Nightworkers hours are limited to an average of 8 hours work in a 24 hour period which nightworkers and they have a right for night workers to receive free health assessments. All employees have a right to 11 hours rest a day, a right to a day off each week, a right to an in-work rest break if the working day is longer than 6 hours.


If you employ staff you must take out Employer’s Liability Insurance and display the certificate.

Health and Safety

You must register your business with either the Health and Safety Authority (most factories, workshops etc) or the local authority (most offices, shops and catering businesses).


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