Guest post by Emma Ferry.

Taking on your first employee is an important milestone and although an exciting time, it’s often a step that raises many questions.

A charity is a business like any other and as with other sectors, employers are expected to abide by all of the UK’s employment laws.

There are several costs associated with bringing in an employee as well as contractual requirements you need to adhere to when you become an employer.

It’s essential you understand your legal obligations and that you make sure you are complying with all the regulations surrounding employment to protect both your charity and your new member of staff. This includes:

Registering as an employer with the HMRC

Like any business, charities are legally obligated to register as an employer with the HMRC so that you can receive a PAYE number.

The PAYE is required so you can set up payroll and needs to be included on payroll forms like payslips, P60s and P45s.

It can typically take around a week to receive the PAYE reference from HMRC and can be done up to two months before your new employee’s start date.

You must not make any payments to employees without registering first.

Running pre-employment checks

Before your new employee starts work, it’s essential you run the appropriate pre-employment checks. This is to ensure they have the right to work in the UK and have a Disclosure and Barring Service (DBS) check if necessary. Any offer of employment should be subject to these checks.

You can also check the validity of a recruit’s qualifications and work history and carry out health, identity, and financial checks if you feel it is relevant to the role.

Having employment contracts in place from the start

All employees must have an employment contract on or before day one. This should outline your working agreement and will set out what you will pay them, their working hours, what their terms and conditions will be, and anything else pertinent to their role. It is important that the employment contract is written specifically for your charity so that you can be sure it best protects the charity should something go wrong.  

Creating disciplinary and grievance policies

Employers are required to have both of these policies when employing people.

Having disciplinary and grievance policies in place ensures that all parties are treated fairly, and they assist charities in complying with employment legislation and the ACAS Code of Practice on disciplinary and grievance matters.

All employees should be aware of how and where they can obtain a copy if they wish to read them or raise a complaint.

Setting up payroll and pension schemes

If you employ staff, you’re required to run payroll to track employee payments and deductions and report them to HMRC on or before each payday.

You will also need to enrol all your eligible workers into a pension scheme and contribute towards it. You are expected to make employer contributions of 3% and the employee will contribute 5%.

Investing in employers’ liability insurance

Even if you have only one employee, in the UK you are legally required to hold employers’ liability insurance.

Your policy must cover you for at least £5 million and come from an authorised insurer. It will help you pay compensation if an employee is injured or becomes ill because of the work they do for you.

Implementing a Health and Safety policy

There is no formal requirement for a Health and Safety policy until you reach five employees, but you may feel it is necessary.

However if not, considerations must still be given to health and safety to ensure that you have assessed the risks your employee may face at work for issues such as lone working, home working, Covid-19, workplace equipment and any other factors that apply.

Are you taking on your first employee?

If you’re in the process of hiring your first employee and aren’t sure you have the right documentation in place, I offer an HR starter pack specifically tailored to suit charities.

We will have an initial meeting to ensure I understand your needs fully, then I can create documents suited to your charity including a contract of employment, an offer letter, new employee starter form, disciplinary procedure, grievance procedure and data protection policy and privacy notices.

Bluestone HR specialises in providing HR support and advice to the charity sector so we understand the issues and challenges that you face. Get in touch with Emma here to find out more about how we can help.

Recent Posts