EMPLOYMENT LAW FOR BUSINESS OWNERS
Employment law applies as much to the smallest business as it does to the biggest - which is why you need to know about it.
Depending on the aims you have for your business, you may be considering taking on employees at some stage and it will be vital to ensure you are compliant with the law if this is a route you choose. Failure to abide by the necessary laws could lead to serious repercussions.
There are a number of areas in which employers have legal obligations towards their staff including:
· Statutory rights
· Tax and national insurance
· Wellbeing issues including support with mental health
· Grievance and disciplinary procedures
· Contract law
In addition, it is worth noting that depending on the nature of your business, you will have some responsibilities towards contractors and freelancers, such as fulfillment of contracts and health and safety law.
What Statutory Rights Do Employees Have?
Statutory rights are the minimum guaranteed rights under the law. They will always overrule internal company policy. Statutory rights for employees include:
· Statutory minimum level of paid holiday
· Protection for whistleblowing
· National Minimum Wage
· Equal treatment for full time and part time employees
It is imperative to comply with statutory rights to avoid falling fowl of employment laws.
What You Need To Know About Pay, Tax and National Insurance
You normally need to register as an employer with HM Revenue and Customs (HMRC) when you begin employing staff or using subcontractors for construction work. Registration is mandatory even if you are only paying yourself. As an employer you will have to operate Pay As You Earn (PAYE( as part of your payroll. PAYE is HMRC’s system to collect income tax and National Insurance from employment
If you are taking on employees via payroll, you will have to make deductions at source from their gross pay for income tax and NI. It is important to be aware of the correct figure in each case and of any changes that are made, which will usually take effect when each tax year starts in April.
You also need to be aware of your own tax and National Insurance requirements if you are self-employed, including the tax self-assessment rules.
What You need To Know About Pensions
It is now mandatory for all employers to provide company pensions for anyone classed as a worker, aged between 22 and state pension age, earning over £10,000 a year and ordinarily working in the UK. The workplace pension scheme is called ‘auto-enrolment’ and all eligible employees should be automatically enrolled unless they opt out.
A percentage of each employee’s salary should be put into a pension scheme automatically every payday. Pensions should be protected and there are different methods of protection depending on the scheme used.
How To Stay In Line With Health and Safety Law?
A quick look at the Health and Safety Executive website will reveal all manner of prosecutions caused by failures to uphold the law.
Some workplace activities will be riskier than others, for example when machinery or working at height is involved. Any workplace which presents a risk of injury or ill health should be risk assessed before work commences. It is the duty of the employer or the self-employed person to carry out any risk assessments.
To know more about your responsibilities, get online and check the Health and Safety at Work Act 1974 and any other applicable regulations such as the Working at Height Regulations 2005.
Why You Need To Be Aware of Discrimination
· Gender reassignment
· Being married or in a civil partnership
· Being pregnant or on maternity leave
· Race, including colour, national or ethnic origin
· Religion or belief
· Sexual orientation
It is important to ensure discrimination in these areas is avoided both in hiring decisions and in workplace conduct. It is advisable to put in place policies and procedures to help ensure compliance with the law by all employees of the business.
Grievances and Disciplinary Processes
A company should have clear rules and procedures for dealing with matters of grievance and disciplinary action against employees. The rules should follows the Acas code of practice on disciplinary and grievance procedures.
Unless an act leading to disciplinary action is an extreme one - such as violence or criminality - the process should not lead to instant dismissal. There should be a process in place designed to ensure the situation is corrected if possible and action (including suspension or dismissal) is only taken if warranted.
Staff have a right to appeal any decision made after a disciplinary hearing, including dismissal. An employee’s terms and conditions of employment must legally include the person they can apply to if they want to appeal a disciplinary decision.
Staff should also be aware of the grievance process as this is necessary to uphold their rights. Grievances can be resolved informally or in meetings where the grievance and possible solutions can be discussed. Finally, there should always be a process that allows an employee to appeal where they feel their grievance has not been satisfactorily resolved.
Why You Need To Understand Contract Law
A contract always exists between employee and employer. A contract exists in law even if there is no written document. Written terms and conditions must be provided within two months of an employee commencing work stipulating certain terms including:
· Pay, including redundancy and sick pay
· Hours of work and overtime
· Notice periods
· Disciplinary, dismissal and grievance procedures
It should be remembered that contracts are legally binding on both parties so each party should be prudent to uphold their responsibilities under the terms.
How To Ensure Compliance With Law
Taking on employees can be a daunting task with many legal issues to consider. As an employer, it may be necessary to get help from an expert in employment law.
At KANR Legal Services we understand how big a challenge employing people may seem, but with our knowledge of relevant law we can help you ensure you fulfil your legal obligations as an employer. We provide assistance whilst helping to ensure you do not incur unnecessary costs, so that your business can handle its legal obligations while protecting the bottom line.