A Small Business Owner’s Guide to Getting the Legal Basics Right

In this blog, I want to take you through the basic contracts and policies you need in place as an employer. Not getting these right could cost you precious time and a lot of money due to;

So your business is growing and you’re ready to grow your team. You feel excited but also daunted. Hiring employees means that you have legal responsibilities to comply with to protect yourself, your staff, and your business.

  • Hiring the wrong people
  • Not giving employees enough training
  • Poor morale and motivation
  • High levels of sickness absence and a high staff turnover
  • Employment tribunal claims

The basics you need in place

Adequate training and induction procedure for new starters

Making new employees feel welcome and giving them a proper induction will help them settle in and hit the ground running. The last thing you want is a new team member feeling lost on their first day because they haven’t been told where to go or who they should speak to. Training needs should be outlined and identified as part of the induction too.

Employee contract

Every new employee should be provided with a contract, setting out their duties, responsibilities, salary, annual leave entitlement, and any other relevant conditions of employment.

Pay, sick pay, tax, and pension provision

Pay statements

Every employer is required by law to give employees a written pay statement which includes details of gross pay, deductions, and net pay.

Paying the right rate of pay

If you pay any employees the National Minimum Wage, you will have to make sure they are getting paid the correct rate according to their age.

Sick pay

Employees are entitled to sick pay from the fourth consecutive day they are absent from work because of illness.


You have a legal obligation to tell HMRC as soon as you employ anyone, for tax purposes. You’ll also need to deduct PAYE and national insurance from their salary and provide individual tax returns to HMRC for each employee in addition to the business tax return.


Since last year, employers have been legally obliged to enrol employees aged 22 and over into a workplace pension scheme if they earn more than £10,000 per year.


Health and Safety policies

As per the Health and Safety at Work Act, employers have a duty of care to look after their employees’ wellbeing at work. This means having a robust health and safety policy in place, producing risk assessments for the work environment and work activities, and having a procedure for recording accidents and injuries at work.

Disciplinary and grievance policy

These are the policies you’ll hope you won’t have to use, but they have to legally be in place. They protect you by allowing you to clearly state what you expect in terms of employee conduct and how you will handle it when their conduct falls short of these standards. They protect the employee by letting them know that any complaints or concerns they have will be taken seriously and investigated fully.

Bullying, harassment and discrimination policy

Did you know that you could be liable if an employee suffers bullying or harassment at work on the grounds of gender, sexual orientation, marital status, age, race, colour, ethnic origin, nationality, beliefs or because of a disability, pregnancy or trade union membership? This is why it makes sense to have a clear policy stating that bullying, harassment, and discrimination of any kind won’t be tolerated and outlining the actions that will be taken in the event that it does occur.

Attendance management policy

This incorporates information on the leave that employees are entitled to, including sick leave, annual leave, maternity leave, paternity leave, and emergency leave. Employees can also legally ask you to consider flexible working arrangements, though this will depend on whether it works for the business.

You should always have an attendance policy which outlines the protocol employees should follow if they’re ill (when should they call in work? who should they call? Not texting to report absence etc) and how frequent, short-term absences or excessive absences, in general, will be dealt with.

Do you feel lost and confused about your basic legal obligations as a small business employer?

I can help you put contracts and policies in place, quickly and simply.

From employment contracts and policies to basic Health and Safety checks, I’ll help you meet the necessary legal and compliance obligations to protect your business.

Let’s get your legal basics sorted – book a call today to discuss how.

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