Information for employers

Recruitment, employment and training information for small employers who maybe taking on their first employee or apprentice, or looking to engage in staff training for their workforce.

  • 1.0 Recruitment, making pre-employment checks and contracts of employment

    1.1 Complying with the Rehabilitation of Offenders Act 1974

    You should only request information about an applicant’s criminal convictions if you can justify that the job demands it. If you can justify asking for this information, make it clear that spent convictions do not have to be declared, unless the job being filled is covered by the Exceptions Order to the Rehabilitation of Offenders Act 1974.

    1.2 Checking references

    It is advisable to check a potential employee’s references. You can do this in writing or by telephone at any point during the recruitment process. Some candidates will prefer you not to check their references until they have been offered the job, and you must have their permission before any referees are contacted. Except for certain employers in the financial services sector, previous employers aren’t obliged to give references.

    1.3 Checking qualifications

    You should check the applicant’s qualifications if they are essential to the position you want to fill. In some professions, applicants must be in possession of specific qualifications before they can practice. You can check qualifications by asking to see the candidate’s certificates. Alternatively, you can check with the awarding bodies or use one of the checking services – such as Experian.

    1.4 Carrying out health checks

    You may wish to include health checks as part of your recruitment process. A health questionnaire may ask about individual and family history and lifestyle. They can highlight potential problems requiring a follow up – eg by a medical examination.

    However, you must ensure you are not carrying out discriminatory practices in asking potential employees to pass a health check.

    Before offering an interview to anyone, you should only ask about a candidate’s disability or health if you need to find out whether:

    • they will be able to attend an interview or do some form of selection test
    • you will need to make a reasonable adjustment to enable them to attend an interview or do the test
    • they will be able to do something that is intrinsic for the job in question

    You can also ask about a candidate’s health if:

    • you want to monitor the diversity of your applicants
    • you want to take positive action to enable you to recruit more disabled workers
    • the job in question is one for which having a disability is an occupational requirement

    Asking a question about disability is not in itself discriminatory. However, your conduct following the candidate’s response could lead an employment tribunal to conclude that you have carried out a discriminatory act. You also need to comply with the Data Protection Act 1998 when collecting and storing these details.

    1.5 Pre-employment checks – data protection issues

    The Data Protection Act 1998 applies to personal information – data about living, identified or identifiable individuals, including information such as names and addresses, bank details, and opinions expressed about an individual.

    There are eight data protection principles. Information should be:

    • processed fairly and lawfully
    • processed for one or more specified and lawful purposes, and not further processed in any way that is incompatible with these purposes
    • adequate, relevant and not excessive
    • accurate and – where necessary – up to date
    • kept for no longer than is necessary for the purpose for which it is being used
    • processed in line with the rights of individuals
    • kept secure with appropriate technical and organisational measures taken to protect the information
    • not transferred outside the European Economic Area (the European Union member states plus Norway, Iceland and Liechtenstein), unless there is adequate protection for the personal information being transferred.

    The use of sensitive information – including information that might be disclosed during a criminal records check – is more tightly controlled. For further information, see a list of the conditions for processing sensitive personal data on the ICO website.

    There are some guidelines you should keep in mind in relation to pre-employment checks. You should:

    • only carry out checks which are necessary
    • think carefully about the best point in the process to carry out the different checks
    • where possible, only check the successful applicant
    • let applicants know what checks will be made and how they will be carried out
    • make sure that checks are carried out for a specific purpose
    • only use sources which will reveal relevant information
    • only rely on information that comes from sources you trust
    • give the candidate the chance to explain if a check reveals adverse information about them
    • if a third party is to be involved in the process – eg a previous employer not listed as a referee – let the applicant know
    • Any information you gather in the process of making your pre-employment checks must be kept securely and confidentially. The candidate has the right to ask to see any information you hold on them which you must supply within 40 days of receiving the request. You can charge a fee of up to £10 for providing the information.

    1.5 Providing a written statement

    To comply with the law, you must give each employee a written statement of employment particulars within two months of their starting work for you. The terms of a contract of employment may be oral, written, implied or a mixture of all three.

    An oral contract is as binding as a written one, though its terms may be more difficult to prove. If you want to include provisions specific to the individual, you can state these either orally or in writing. However, stating them in writing may prevent disagreements in future.

    If you issue a written contract, you should include a term stating that it replaces all previous discussions/correspondence in relation to terms of employment provided the employee accepts this.

    If you do not have any kind of contract of employment with an employee, you must – at the very least – issue them with a written statement.

    If you have some kind of contract of employment with an employee, you do not need to issue a written statement as well – but only as long as the contract contains all the items required in a written statement.

  • 2.0 Changing from sole trader to a limited company in order to employ people

    If you decide to change your business’s legal structure, for example if you’re a sole trader or partnership and you want to make your business a limited company, you’ll have to inform a number of areas of HMRC to ensure your tax affairs are kept in order.

    If you decide that you want to change your business structure to a limited company, you need to register with Companies House first. You’ll also need to tell HMRC, file Company Tax Returns and pay Corporation Tax.

    2.1 Getting started with Corporation Tax

    If you were previously a sole trader or a partner in a business partnership, you’ll need to complete a tax return for the year you stopped trading and started a new company. If the partnership is ending, the nominated partner will have to fill in a tax return covering the period until the partnership ends.

    If you change your business status from a sole trader to a limited company you’ll also need to deregister as self-employed and stop paying self-employed Class 2 National Insurance contributions. You can do this by calling HMRC’s self-employed helpline

    2.2 Employing people

    If you’re a sole trader or partnership which hasn’t previously employed anyone and are now starting a limited company of which you’ll be a director then you’ll be an employee of the company. This means you’ll have to register as an employer and set up and run a PAYE scheme. The scheme will also cover any other employees you take on.

    If you’ve already been running a PAYE scheme as a sole trader or partnership, you’ll need to set up a new scheme for your limited company. You’ll be provided with a new employer PAYE reference number. You can get more advice from your employer Tax Office.

  • 3.0 Your responsibilities as an employer

    3.1 Legal obligations when employing your first worker

    You must register as an employer with HM Revenue & Customs if one or more of the following apply:

    • the worker already has another job
    • they are receiving a state or occupational pension
    • you’re paying them at or above the PAYE threshold
    • you’re paying them at or above the National Insurance lower earnings limit
    • you’re providing them with employee benefits.

    Once registered, you must deduct income tax and National Insurance contributions from their pay using the PAYE system.

    3.2 Employing young workers

    Young people over 16 and below 18 years of age are known as young workers. There are laws that give special employment rights to young workers. These concern their health and safety, what jobs they can do, when they can work and how many hours they can work. More information can be found at

    3.3 Ensuring your business is properly insured

    If you employ anyone, you’re legally required to have employers’ liability insurance. This provides cover against claims made by employees for injuries or illnesses they’ve suffered as a result of working for you. You must ensure that you display your certificate of insurance or provide access to an electronic copy where employees can easily access it – for example, on your company intranet.

    3.4 Complying with health and safety laws

    You have a legal obligation to provide your workers with a secure, safe and healthy working environment. Your responsibilities are likely to include:

    • meeting fire safety standards
    • carrying out risk assessments
    • providing clean toilets and sanitation facilities
    • reporting accidents or dangerous incidents in the workplace to the relevant authorities.

    3.5 Working time and rest breaks

    To comply with the law you must not ask your workers aged 18 or over to work an average of more than 48 hours per week on average, unless they give you their voluntary consent in writing. You must also allow workers to have minimum daily and weekly rest periods.

    3.6 Keep the right staff records

    As an employer, you are legally obliged to gather and retain staff records for certain reasons.. There are also other records you should keep as a matter of good practice.

    You must ensure that you collect, store and process these records securely.

    Staff records you must keep
    You must keep staff-related records on:

    • pay rates – to meet the statutory requirement to issue workers with pay statements and to ensure you are paying your workers at least the national minimum wage
    • payroll – i.e. on income tax and National Insurance deductions – for HM Revenue & Customs
    • sickness of more than four days and how much statutory sick pay you have paid
    • accidents, injuries and dangerous occurrences – to meet health and safety requirements
    • You must also keep records to ensure that weekly working time and night work limits (under the Working Time Regulations) are complied with in your business. It’s up to you to determine what records you need to keep for these purposes, but you * may be able to use existing records maintained for other purposes, such as pay.

    Staff records you should keep
    It’s good practice to keep records of each worker’s:

    • training and appraisals
    • employment history – date employment began, promotions, job title(s)
    • absence – records of lateness, sickness, and any other authorised or unauthorised absences
    • personal details – name, address, emergency phone number(s), qualifications, work-relevant disability
    • terms and conditions of employment – including a copy of each employee’s written statement and correspondence relating to any changes to their terms and conditions.

  • 4.0 Business mentoring

    Building a relationship with a mentor can have a positive effect on your business, whether you’re just starting up or are already established. A mentor can help you develop important business skills, support you in making important decisions and put you in touch with useful business contacts.

    A business mentor offers advice, guidance and support to help you run and improve your business. It can involve face-to-face meetings or online discussions – or a combination of both – depending on which arrangement is best for both parties.

    You can use the national mentoring network – – to find business mentors or offer your services to other businesses. Many of the leading mentoring organisations are making their mentors available through this government-backed service.

  • 5.0 Tax breaks and exemptions in national insurance for additional staff

  • 6.0 Recruitment and training funding

    To help your business succeed in this time of economic challenge, its vital employers invest in skills. Training increases productivity in the short term – and employers who don’t train are two times more likely to fail than those who do.

    Research shows that three in four business people (76%) believe that their organisation would not succeed without investment in training.

    6.1 Youth Contract, Work Programme wage subsidy – England and Wales

    From April 2012, a wage subsidy payment of £2,275 will be available for small employers who employ a jobless 18-24 year old from the Work Programme for a period of six months. The subsidy will be paid to companies for taking on young unemployed people and is designed to cover costs like National Insurance contributions.

    The wage subsidy payments will be open to all businesses, voluntary organisations and charities, it will be paid after the young person has been employed for 26 weeks for the majority of businesses.
    Payments will be staggered for smaller enterprises, with the first payment after eight weeks and the rest after 26. This recognises that smaller businesses need a boost to their cash flow to make the jobs viable.

    The wage subsidiary payment is also available for part time positions, with a rate of £1,137.50 if someone is employed between 16 and 29 hours.

    Government aims to subsidise work placements and training for up to 160,000 young jobless over a three year period.

    6.2 Apprenticeships – England and Wales

    As Apprenticeships are work-based training programmes, most of the training is ‘on the job’ at your business. Apprenticeships are available to people of all ages and can be used to recruit new staff or train your existing workforce.


    Funding from the Welsh Government, the National Apprenticeship Service and in some cases the European Social Fund, supports the cost of your apprentice’s training and assessment. This funding is paid directly to the organisation that provides and supports the Apprenticeship; in most cases this will be a learning provider.

    The size of the contribution varies depending on your sector and the age of the candidate. If the apprentice is aged 16–18 years old, you will receive 100 per cent of the cost of the training; if they are 19-24 years old, you will receive up to 50 per cent; if they are 25 years old or over you may only get a contribution depending on the sector and area in which you operate.

    National Minimum Wage

    A National Minimum Wage for apprentices applies to all apprentices aged under 19; and apprentices aged 19 or over in the first year of their Apprenticeship. The apprentice minimum wage is currently £2.60 per hour and applies to time working, plus time spent training that is part of the Apprenticeship. Employers are free to pay above the new wage and many do so.

    For more information visit: Welsh government url

    6.3 Redundancy Action Scheme (ReAct) II – Wales

    The Redundancy Action Scheme II (ReAct II) is a programme of funding for training provided by the Welsh Assembly Government for people living in Wales who are facing redundancy. The scheme also helps employers who are downsizing their business or are recruiting staff.

    Employers get two packages of support funding for taking on someone who has been made redundant.

    • Employer Recruitment Support funds employers who recruit individuals made redundant in the past six months. The award offers up to £3,000 paid in four installments as a contribution towards wage costs.
    • Employer Training Support is a separate discretionary fund of up to £1,000 that an employer can put towards the cost of the new recruit’s job-related training.

    Employers can choose whether to apply for Recruitment Support alone or Recruitment and Training Support. Employer Training Support can only be used in conjunction with Employer Recruitment Support. Employer Recruitment and Training Support is available to a business if the individual they wish to recruit is either under formal notice of redundancy or has become unemployed in the last six months as a result of redundancy.

    Individuals working 25 hours per week or more will attract a full wage subsidy whilst those employed between 16 and 24 hours per week will receive a wage subsidy equal to 50% of the full time rate. No wage subsidy is payable for employees who work less than 16 hours per week.

    6.4 The Workforce Development Fund for the adult social care sector – Wales

    The Workforce Development Fund for 2011-2012 is a funding stream from the Department of Health disseminated by Skills for Care. It supports the on-going professional development of staff across the adult social care sector through vocational qualifications. It replaces what was previously called the Training Strategy Implementation Fund. The fund is distributed by Skills for Care via a network of organisations and employer led partnerships and focuses on the achievement of qualification units.

    For more information visit:

    6.5 Young Recruits Programme – Wales

    The Young Recruits Programme is an all Wales programme that provides financial support to employers offering high quality Apprenticeship programmes to recruit and train additional young apprentices (16-24 year olds).

    Targeted support is available to create additional opportunities for young people to access quality Apprenticeship places. The programme can benefit employer of all sizes through a £50 per week wage subsidy paid to the employer.

    6.6 Apprenticeship Grant for Employers of 16 to 24 year olds (AGE 16 to 24) – England

    The AGE 16 to 24 is aimed at helping eligible employers to offer young people employment through Apprenticeship programmes, by providing wage grants to assist them in recruiting their first apprentice.

    The National Apprenticeship Service will provide up to 40,000 Apprenticeship Grants with a value of £1,500, to encourage new employers to take on new 16 to 24 year old apprentices. Priority will be given to small-medium size employers with less than 50 employees, a further 20,000 employers with up to 250 employees who may be recruiting their first or additional apprentices will be supported.

    The AGE 16 to 24 is available now until March 2013 for employers who are able to offer a job opportunity to a young person they recruit. Funding will start from 1 April 2012.

    For more information visit:

Being back in work will make a financial difference to my girlfriend and me and our baby, which is due in a few weeks. The huge difference is mentally having something to get up for in the morning, I’ve made some great friends and the job’s really interesting. It’s a brilliant scheme for people who really want to get back into work as the support is there for people.

Martin Williams

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