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Staff - United Kingdom

Updated 02/2011

Legal requirements

Employment conditions

Pay

Assorted legal obligations apply to employee pay:

  • paying your male and female employees equally and fairly ;
  • supplying an itemised pay statement ;
  • complying with National Minimum Wage (NMW) legislation (rates change on 1 October each year);
  • maternity, paternity, adoption, sickness and guarantee allowances.

Working hours

Under the 1998 working time regulations, the maximum working week is 48 hours for workers aged 18 or over, and 40 hours for workers under 18. Most workers over 18 can, however, agree in writing to work more than 48 hours per week.

Employees who are expected to work regular overtime must be made fully aware of this in their contract of employment. Detailed information can be found on the Business Link website.

Statutory holiday

From 1 April 2009, a worker's statutory paid holiday entitlement is 5.6 weeks (28 days for a worker working a five-day week). This can include public holidays. The entitlement for part-time workers is calculated on a pro-rata basis.

Time off

Employees are entitled to leave of absence, e.g. for jury and magistrate service, trade union duties, and health issues affecting parents or dependents.

Terminating an employee's contract

An employer faces compulsory obligations and procedures when dismissing an employee.

Employment contracts

The moment an applicant unconditionally accepts an offer of a job, a contract of employment comes into existence. Even if a written contract is not issued, there is a legal duty under the Employment Rights Act 1996 to provide most employees with a written statement of the main terms of employment within two calendar months of starting work.

It is important to choose the right employee status. An employer who gives an employee the wrong status may have to pay extra tax, National Insurance Contributions (NICs), interest, and possibly a fine.

Employing foreigners

Migrant workers

In the case of new EU members, Czech, Estonian, Latvian, Lithuanian, Hungarian, Polish, Slovenian, and Slovakian nationals normally have to register under the Worker Registration Scheme if they wish to work for an employer in the United Kingdom for more than one month. (Note: Under European Union law, the Worker Registration Scheme cannot continue beyond the end of April 2011). Most Bulgarian and Romanian nationals must however apply for an accession worker card once their employers' application for a work permit (except for certain categories of employment) has been approved.

It is a criminal offence to continue employing an unregistered migrant worker. It is also illegal for such a worker to start in a job before an accession worker card has been issued, even if an offer of employment has been made.

Posted workers

Employers temporarily posting workers on assignment to another EU country must fulfil the following requirements:

  • meet the host country's minimum terms and conditions of employment ;
  • ensure posted workers are treated in the same way as local workers;
  • coordinate employees' social security contributions.

Posted workers remain insured in the country where they are normally employed and continue to pay contributions to that country's social security system.

Information on what employers need to do when employing overseas workers, can be found on the Business Link website.

There are minimum social rules to follow, especially about non-discrimination, gender equality and health and safety.

Administrative procedures

Starting and ending employment

Registering as an employer

Before hiring staff, a business first has to register for tax, NICs and benefits as an employer with HM Revenue & Customs (HMRC).

Registering employees

When registering a new employee, an employer has to check:

  • their correct employment status ;
  • whether or not they can work legally ;
  • whether the PAYE (Pay As You Earn) scheme applies to their earnings.

Further guidance is available via Business Link

Social security contributions

It is important that businesses manage National Insurance Contributions (NICs) correctly. NICs fund social security benefits and any right to claim benefits can be affected by the non-payment or late payment of NICs. The UK Government's Business Link website provides guidance on the system, including how to calculate payments and the methods of payment.

Wage contribution returns

Employers have to deduct income tax and NICs from employees' pay and submit the deductions to HMRC. The system is called PAYE (Pay As You Earn). A guide including the forms can be found on the Business Link website.

Work permits for foreign workers

Migrant workers

Additional responsibilities apply to employers hiring migrant workers:

Posted workers

Record-keeping

There are legal and business reasons for keeping data on employees. However, under the Data Protection Act 1998, there are also legal duties relating to how staff records are kept and how they are used.

Dismissal

It is important to end employment correctly. The Government's Business Link website provides full guidance on how to do this as well as online tools and training.

Resources

The UK Government provides a comprehensive guide to employers   on their responsibilities and rights on the business support website, Business Link, including all legal requirements, as well as access to interactive tools. The Government also provides comprehensive guidance on the rights and responsibilities of employees on its citizens' website Directgov.

The Business Link website helps employers to assess their staffing needs and plan ahead.

EURES, the European job portal, offers employers information and support on recruiting across the EU. As well as assisting jobseekers, it helps entrepreneurs find workers from across the EU. In border regions, EURES provides information on cross-border commuting and helps workers and employers with problems that may arise.

Check also the legislation on this topic in:

Living and moving in Europe

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Further help

The Citizens Advice Bureau (CAB) can provide personalised information on a full range of issues, including employment issues.

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