Hiring your first employee? Here's a checklist

Customisable business insurance
01 June 2016
3 minute read

Hiring your first employee is a huge milestone. It means the hard work's paid off and you're on the up. You'll finally have a second pair of hands to share the workload with. But hiring without the right preparation could create more work for yourself, not to mention a legal mess.

So, if you're unsure of what should be on your pre-hiring checklist, read on.

Register with HMRC

As an employer, you need to be registered with HM Revenue and Customs (HMRC). You can do this up to four weeks before you pay your new staff and takes up to two weeks to process.

It's also important to think about how you'll administer payroll, which might mean finding an accountant to take on this responsibility, if you don't already have one.

Get employers' liability insurance

As an employer in the UK, you are legally required to have employers' liability insurance. Not having it can result in hefty fines from the Health & Safety Executive.

Aside from it being a legal requirement, employers' liability offers your business protection in the event that an employee suffers from an illness or injury as a result of the work they're doing. If this happens and you're found liable, employers' liability may cover the associated legal expenses and compensation to the employee.

And while you're thinking about insurance, use this opportunity to review the other business covers that might protect the longevity of your business.

Get the employment contract right

All employees must have a contract with their employer, demonstrating that the relationship is official and setting out terms and conditions.

This document should include all the terms of employment, including salary, employment conditions and employee rights, along with the duties and responsibilities that their job will entail.

For free information and advice on employment contracts, try consulting the free online DAS Employment Manual. Or if you're looking for more ongoing support, our legal protection insurance includes a handy legal advice helpline.

Consider probationary periods

One crucial point to consider before taking somebody on is the length of their probationary period – that's the time in which you have more flexibility around dismissal if they fail to meet the job requirements.

Usually set at between three and six months, this is an important road-test for the relationship and a safety net for a time-poor startup. After the probationary period is up, it will be much harder to let your employee go if things aren't working out, and may result in claims of unfair dismissal if not handled correctly.

Employment law is a minefield for the uninitiated, with new regulations and changes coming in all the time. So make sure you're clued up - or have someone on your contacts list who is! Just a few of the big ones to be aware of include:

Minimum wage

This changes over time, so make sure you stay on top of the latest figures.

Shared parental leave

New parents are entitled to a certain amount of paid and unpaid leave, which can now be shared between both Mum and Dad.

Flexible working

All employees, not just parents or carers, have a legal right to request flexible working. That means if they do, you need to take the request seriously.

Holiday allowance

By law, all employees must receive a minimum of 28 days paid leave per calendar year. So make sure you give you're giving employees enough time off.

If you're in need of further information on the law and your responsibilities as an employer, Gov.co.uk also provides some useful guidance.

Have the right physical set up

It might sound obvious, but make sure your business is ready to hit the ground running when your new employee comes on board. That means getting them set up with the equipment they need, whether that's a desk, chair, laptop, mobile phone, or something more specialist. And don't forget those pesky software licenses too.

This is also a good time to consider business equipment insurance.

Think about employee benefits

Alongside your legal and administrative obligations, you should also consider offering additional employee benefits to help attract – and keep hold of your employees. As a small business, you may not have cash to splash on expensive perks, but there are other ways of showing employees you care, such as flexible working. If you're unsure of what would keep your employee(s) happy at work, why not ask them?


When you're ready to hire, there's plenty to consider. We've put together an article on hiring tips and tools to get you started.

Offer accepted

Once your offer's been accepted, it's time to smash that onboarding process. Check out our article on onboarding best practices to get things off to the best start possible!

This content has been created for general information purposes and should not be taken as formal advice. Read our full disclaimer.

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