Manage your employees

Once you have employees, you must run payroll correctly every pay period. This includes paying at least the National Minimum Wage, reporting to HMRC in real time, and making the correct tax and National Insurance deductions.

As an employer, you're responsible for paying statutory entitlements when employees are off sick, on parental leave, or have other qualifying absences. You can often reclaim some or all of these costs from HMRC.

If you provide benefits in kind (company cars, private medical insurance, etc.), you must report them to HMRC annually via P11D forms. From April 2027, most benefits must be payrolled instead.

Auto-enrolment duties are ongoing - you must assess new joiners, re-enrol opt-outs every 3 years, and maintain minimum contribution levels. The Pensions Regulator can impose significant penalties for non-compliance.

Your health and safety duties are ongoing - you must maintain a safe working environment, conduct regular risk assessments, provide training, and report serious incidents. Requirements scale with your workforce size.

As the 'responsible person' for your premises, you must conduct fire risk assessments, maintain fire safety measures, and ensure staff are trained. Requirements apply regardless of business size.

The Equality Act 2010 places ongoing duties on employers to prevent discrimination, make reasonable adjustments for disabled employees, and ensure equal pay. Failure to comply can result in unlimited tribunal compensation.

Employment relationships evolve - you may need to vary contracts, handle flexible working requests, or manage different types of worker. Understanding your legal obligations helps avoid disputes.

When employment relationships break down, following correct procedures is essential. Unfair dismissal claims can result in significant compensation - compensatory awards can reach up to £123,543 (from April 2026; cap removed entirely from January 2027).

If you need to reduce your workforce, strict legal requirements apply - including individual consultation, fair selection criteria, and collective consultation for 20+ redundancies at one establishment. Getting this wrong can be expensive.

When you buy or sell a business, or when service contracts change hands, TUPE may apply. Employees transfer automatically with their existing terms and conditions, and strict consultation duties apply.

Workers who report wrongdoing in the public interest have legal protection against dismissal and detriment. You should have clear procedures for raising concerns and ensure whistleblowers are not victimised.

You may need to work with trade unions - whether through voluntary or statutory recognition. Recognised unions have rights to be consulted on redundancy, TUPE transfers, and pension changes.

As your workforce grows, additional legal requirements kick in - gender pay gap reporting at 250+ employees, apprenticeship levy at 3 million+ payroll, and collective consultation thresholds.

You must keep various employment records for specified periods - payroll records for 3 years, working time records for 2 years, and some health and safety records for 40 years. Good record-keeping protects you in disputes.