Hiring in the UK: 5 Things You Should Know

Whether you are a UK startup looking to hire your first employees or a foreign company looking to recruit someone based in the UK, you should be aware of the following points. Be sure to also check out our Offer Letter and Employment Agreement Package on Cooley GO Docs.

1. How should you ‘engage’ your employee?

You should provide written details of certain key terms of employment no later than the start of employment. The key terms would cover the job title, probationary period (if any), wage, hours and days of work, place of work, holiday entitlement, benefits, any payment for times when the employee is off work due to ill health, other paid leaves, any pension scheme that is in place for the employee, the notice period for terminating the employment and training required/provided by you.

In practice, it is very common to engage employees under contracts of employment as these can include – as well as the required terms and conditions of employment – additional protections for the employer, such as express confidentiality obligations, assignment of intellectual property provisions (very important for intellectual property-based companies), and post-termination restrictions to prevent the employee from leaving and taking other key employees or clients/suppliers with them.

2. Working time

Working time in the UK is governed by the Working Time Regulations (WTR). The WTR were introduced with the principal aim of protecting the health and safety of employees at work. Under the WTR, employees are entitled to:

• A minimum daily rest period of 11 consecutive hours in every 24-hour period.
• A rest break after six hours of work.
• A weekly rest period of at least 24 hours in every seven-day period.
• At least four weeks’ paid annual leave (plus the eight normal UK public holidays).

In addition, the WTR impose a maximum 48-hour average working week, calculated over a rolling four-month period (although often, employees in the UK opt out of this restriction and work more than the average weekly limit).

3. Immigration constraints

You must ensure that the individuals you employ have permission to work in the UK to avoid any sanctions being imposed on you. The following is a list of categories of persons that do not need permission to work in the UK (though they may still require a visa):

• British citizens and their spouses.
• A person with the right of abode (citizens of certain commonwealth countries that are free from immigration restraints who will not need a visa to enter the UK and are freely able to work in the UK).
• Persons with indefinite leave to remain (those who do not have the right to abode but have been granted permission to indefinitely stay in the UK and are freely able to work in the UK).
• European Union and European Economic Area (EEA) nationals and their non-EEA family members with settled or pre-settled status under the EU Settlement Scheme.
• Persons granted refugee status or humanitarian protection.
• Ukrainian nationals and their family members granted permission to stay in the UK under the Ukraine Family Scheme or Homes for Ukraine Sponsorship Scheme.
• Some asylum claimants.
• Some overseas students (but only part-time during term time).

Persons falling outside of these categories will need to apply for a visa under the government’s points-based system. The system consists of five tiers with each tier having different points requirements. If you are looking to hire someone falling within tiers 2 and 5, you will have to sponsor the employee and apply for a sponsor license from the UK border agency.

4. Pensions

If you employ at least one person in the UK earning in excess of 10,000 pounds, you will be subject to the auto-enrolment process whereby you, as employer, must enrol your employees in a workplace pension scheme. This is part of a government initiative to encourage people to build savings. The date that you have to start the auto-enrolment process depends on the date that you first have to pay income tax deductions from your employee’s wages to HMRC, known as the ‘PAYE Scheme’.

5. National minimum wage

In the UK, employees are entitled to receive the national minimum wage. The amount that they are entitled to receive depends on their age at the time of employment and is adjusted from time to time. You should check the applicable current minimum wage before setting an employee’s salary.