How to Hire Employees in the UK

If you’re new to operating a business, HR is one of the most important departments a company might have. Proper recruitment procedures and effective hiring will allow you to save time and resources when looking for new hires, as well as increase your overall workforce quality and skill level.

However, when operating your business within the United Kingdom, you’ll have to comply with UK employment law not only before, but also after hiring a new employee.

Whether you’re a local startup or an international company looking to expand to the UK market, you’ll need to know the details – how to hire employees in the UK?

Employees and Workers – What’s the Difference in the UK?

One of the most important distinctions in UK employment law is the one between an employee and a worker.

But wait a minute, we hear you say, aren’t they basically the same?

The answer is no – they are not the same. An employee, for example, must work under the terms of an employment contract. In the UK, such a contract might be oral, written, or even implied, in contrast to many other countries which only accept a written contract. However, you’re still obliged to provide a written statement for any employee that’s going to be staying with you for over a month, and you have two months to do that since employment.

Workers, on the other hand, are a wider category than employees, and also includes everyone working under an employment contract, as well as any other type of contract. This includes casual workers and agency workers most often, but it does not, however, include self-employed workers.

What’s required to hire an employee in the UK?

Before your employee starts their work, you must provide them with written details of the key terms of employment. This covers the job title, wage, working hours, place of work, paid and unpaid leaves, pension schemes, work period, and other factors applicable in your case. When establishing a working time for your employees, you’ll need to comply with the Working Time Directive, or the WTD.

The WTD states that a minimum daily rest period of 11 consecutive hours is obligatory, which means you can’t simply put an employee on evening shift and transfer them to a morning shift in the morning. There’s also a regulatory break after six hours of work, as well as a weekly rest period of at least 24 hours. You’ll also have to allow your employee four weeks of paid leave every year, in addition to the regular UK public holidays.

You must pay the employee at least the National Minimum Wage, and each one of your employees requires legal rights to work in the UK. You’ll also need employers’ liability insurance as soon as you become an employer – the policy must cover your company for at least £5 million. For each day you are not insured but are still operating as an employer, you might be fined £2,500 for each day.

How to hire someone from outside the UK in the UK?

Brexit brought a wide variety of changes to the employment law in the UK, especially when it comes to hiring employees from abroad. Since the beginning of 2021, a point system has been put in place – you’ll need a proper sponsor licence to hire foreign employees and workers, and anyone you recruit will have to meet certain requirements.

Without a sponsor licence, you can still hire Irish citizens, as well as any foreigners settled or pre-settled under the EU Settlement Scheme. You can also freely employ those with indefinite leave to remain in the UK. To get a sponsor licence, your business must be eligible – that means no unspent criminal convictions for certain crimes (including money laundering and immigration offences). The job position itself must be suitable for a sponsor licence – check out the GOV.UK website for more information.

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If you’re in need of more information or help, we’re ready to provide assistance here at Mükellef. On our website, you’ll find a variety of useful information for entrepreneurs who are new to the UK market. We can also take care of the entire process for you – contact us and we’ll work out a deal!


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