HR for Small Business For Dummies, UK Edition

Marc Bishop, Sharon Crooks

• Publisher: For Dummies
• Year: 2015
• Print ISBN:
  9781119111320
• Edition: 1
• eBook ISBN:
  9781119111337
• Topic: Business
• Subtopic: Human Resource Management
• Index: Business

Your handy, authoritative guide to small business HR

Packed with practical tips and advice on how to handle tricky people situations in the workplace, this friendly guide shows anyone without a ton of HR experience how to correctly—and legally—utilise HR practises within a small business. From hiring to firing, managing performance to leading change—and everything in between—HR For Small Business For Dummies ensures you and your organisation are prepared for whatever may come knocking on your human resource department's door.

Written by a team of authors that runs PlusHR—an organisation that provides outsourced HR services to small- and medium-sized companies—HR For Small Business For Dummies offers a thorough and accessible understanding of what HR is, how it works and what key UK legislation you need to know to resolve issue-led HR problems. Throughout the book, the emphasis is on communication and how you may need to tweak your strategy as your business grows, while special attention is given to how an owner's personal style of leadership and management impacts everyone within a company.

• Build a recruitment strategy and establish successful HR practises
• Understand your legal and financial responsibilities as an employer
• Minimise your growing or shrinking pains—for you and your people
• Avoid the pitfalls of discrimination, bullying and unfair dismissal

If you're an SME owner, director or practitioner who needs to know more about HR issues and how to best resolve them, HR For Small Business For Dummies cuts through the clutter and offers practical, day-to-day guidance on running an effective HR department.

Part I

Getting Started with HR

For Dummies can help you get started with lots of subjects. Visit www.dummies.com to learn more and do more with For Dummies.

In this part …

Get off to a good start as an employer

Find the right people for your business

Get to grips with pay and benefits

Find out how to fire people fairly

Chapter 1

Getting into the Business of People

In This Chapter

Getting the basics right at the start

Managing people to get great results

Keeping out of trouble

A small business owner is more likely to groan than smile at the mention of HR because the term ‘Human Resources’ conjures up fear in many forms. You can’t afford the time or money it costs to get it wrong. You’re afraid to make a mistake that you’ll have to defend at an Employment Tribunal. You worry about how to keep control, get in the right people and get rid of the wrong people as your business grows.

Human Resources is all about balancing people, time and money. If you apply common sense, common decency and a basic knowledge of your employees’ rights, which you can read about in Chapter 7, you will avoid most of the pitfalls. But to turn to a sporting analogy for one moment, Formula One Racing drivers don’t focus on avoiding the potholes — they focus on winning. Their sponsors pay for the best car and the best pit stop team so they can win races and make money. If you apply the knowledge in this book to how you do HR in your business, your employees will deliver great results, and your business will win.

Becoming an Employer

As soon as you become an employer, you acquire legal, tax and moral obligations.

Just because you pay someone to work for you does not automatically make you his or her employer. Following are three fundamental factors that determine whether someone is your employee:

• Control: You have control over someone if you or someone in your business has a contractual right to decide when, where and how the person does his or her work for you.
• Personal service: Personal service is a service provided by the person themselves, precluding the option of sending a substitute to do the work for you.
• Mutuality of obligation: Mutuality of obligation exists between you and another person if you have promised that person a minimum amount of work, and that person is obliged to do any work that you ask him or her to do.

Where someone is providing a personal service to your business under your control and you are contractually obliged to give them work and they are obliged to undertake the work, there is probably an employment relationship, so they are an employee.

If you want to avoid becoming an employer, you need to avoid taking control and creating a mutual obligation. In Chapter 2 you can read about the pros and cons of employing people or using other kinds of workers.

A worker is any individual who undertakes to do or perform personally any work or service for another party, whether under a contract of employment, or any other contract. They are protected by some of the employment legislation.

If you use self-employed people in your business, your relationship depends on the contract you have with them, often called a Contract for Service. They are protected by contract law and some discrimination law but not employment law.

Workers is an umbrella term, and all employees are also workers.

Employment status

You need to be clear about the status of the people doing work for you, so that you know which laws and regulations to follow.

Irrespective of the person’s status, you have to follow Health and Safety and Data Protection regulations to protect anyone who is doing work for you. You can read more about these regulations in Chapter 6. If you want to know how to handle Whistleblowing, you can find out in Chapter 15.

Employees have the most protection, arising from European Regulations and UK law. Within the UK there are sometimes different rules for Scotland and Northern Ireland.

The following table gives you a snapshot of which rules you need to follow, depending on the status of the person doing work for you.

Before you employ someone you must check that they have permission to work in the UK, either because they are a UK or EU citizen, or because they have a work visa. If you break the law you will be fined. Check out the rules in Chapter 14.

Employers’ Liability Insurance

As soon as you take on your first employee, by law you must have Employer’s Liability Insurance from an authorised insurance company to cover you for up to £5m liability, just in case your employee is injured or becomes ill because of the work they do for you. You have to display the insurance certificate where your employees can see it.

You can be fined £2,500 per day for every day that you are not properly insured.

Health and safety

By law you must display a health and safety poster or give each employee a leaflet, explaining their health and safety rights. Additionally, you can’t allow employees to smoke in enclosed spaces, and you could be fined if you don’t stop them.

You can download the health and safety poster for free from the Health and Safety Executive website: www.hse.gov.uk

Taxing work

Like it or not, as an employer you have tax obligations.

If you employ somebody and they earn above certain thresholds, you must

• Register with Her Majesty’s Revenue and Customs (HMRC) as an employer and set up a payroll or get someone else to run one for you
• Deduct income tax, national insurance contributions and if applicable, pension or other deductions from your employees’ pay before you pay them
• Send a return, called ‘Real Time Information’, to HMRC outlining payments and deductions you have made to employees after each pay date. Annually, send a return of taxable employee benefits you have provided
• Pay your Employer’s National Insurance contributions to HMRC either monthly or quarterly depending on your size

You must provide a written or electronic pay slip for employees, giving them details of their pay and deductions.

For more information on your responsibilities as an employer when it comes to tax, plus plenty of helpful advice, check out: https://www.gov.uk/register-employer

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Table of contents

• Cover
• Title Page
• Table of Contents
• Introduction
• Part I: Getting Started with HR
• Part II: Maturing in Business: Moving from Managing People to Good HR Practice
• Part III: Growing People and Teams
• Part IV: HR and the Law
• Part V: The Part of Tens
• About the Authors
• Cheat Sheet
• Advertisement Page
• Connect with Dummies
• End User License Agreement