Guide to Employment Law

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The key points in Employment law will be covered. This will ensure that you are aware of employee rights and employer obligations which need to be complied with to avoid workplace disputes and claims.

Registering with HMRC

  • Register as an employer with HM Revenue & Customs
  • Receive PAYE registration details
  • This must be done before you issue your first payslip to your first employee


  • Payroll must be set up and payslips produced for each employee
  • Payslips will need to detail earnings and show deductions for PAYE Taxes including income tax and employee national insurance (NI)
  • You must report your payroll to HMRC and pay any tax and NI owing on behalf of employees as well as your organization as an employer through a full payment submission (FPS)
  • Certain aspects of PAYE taxes must be reported through an Employer Payment Summary (EPS)
  • As an Employer you may be, subject to other conditions entitled to employer NIC allowance up to £3,000 which can reduce your PAYE taxes liability

Employment terms

  • Employees should be given a legally binding contract of employment showing both employer and employees’ rights and obligations
  • The terms of the contract can be written, verbally agreed, in an offer letter from employer although written contracts are preferred option
  • Terms of an employment contract can be altered if the employee agrees or you have reserved the right to do so
  • This must be given within two months of an employee starting work which they must accept
  • A probation period is commonly offered for 3-6 months (but can be as little as one week for short-term contracts) after which full employment may be offered

Minimum wage

  • The National Living Wage applies to workers aged 25 and over and is £7.50 per hour
  • All employees as well as casual, part-time and agency workers must be paid the National Minimum wage from 1 April 2017
  • Workers aged 21 to 25 must be paid £7.05 per hour
  • Workers aged 18 to 21 must be paid £5.60 per hour
  • 16 and 17-year-olds must be paid £4.05 per hour
  • Apprentices under 19 years old must be paid £3.50 per hour

Paid Leave

  • Full-time employees are permitted to at least 28 days of paid holiday per year
  • Part-time workers are permitted a pro-rata amount of paid holiday per year
  • The right to paid holiday starts to accumulate from the first day of employment and continues even during sick leave or maternity leave

SSP (Statutory Sick Pay)

  • SSP is £89.35 per week for up to 28 weeks
  • Employers can refuse to pay SSP in certain situations e.g. not giving correct notice


Health and safety

  • Employers are legally responsible for all employees including those that work from home according to the normal Health and Safety regulations

Maternity leave

  • Ante-natal care classes which can include parenting and relaxation classes can legally be taken by pregnant employees as reasonably paid time off-work (evidence can be requested as proof)
  • Maternity leave can be taken by new and adoptive parents
  • 52 weeks’ maternity leave can be taken. Leave can be taken 11 weeks before the birth of the child and 2 weeks must be taken after the birth.
  • The amount that an employee receives is determined by Statutory Maternity Pay (SMP) rules. This states that 90% of average weekly earnings must be paid for the first 6 weeks and £140.98 or 90% of weekly average earnings must be paid for next 33 weeks (whichever rate is lower can be paid)
  • 1-2 weeks’ paternity leave can be taken when an employee’s a spouse/partner gives birth/adopts

Dismissal and Disciplinary procedures

  • Employees must be given written details of all dismissal and disciplinary procedures
  • The ACAS Code of Practice should be followed

Hours of work

  • Employees over 18 must not work more than 48 hours per week and must be given one day off work
  • Employees under 18 must not work more than eight hours per day and 40 hours per week
  • All employees, full-time and part-time, may request flexible working hours if they have worked for an employer for more than 26 weeks consecutively by making a statutory application