Employing someone to work in your home is a wonderful option. It can add flexibility to your lifestyle and improve your overall quality of life. But do you know what your legal duties are as an employer of a domestic staff member? This is a question our friends at Stafftax are often asked.
In the eyes of HMRC, is an individual who takes on a member of staff to work in their household considered to be an ‘employer’?
Unless the staff member is self-employed, the answer to this question is yes.
We know this can seem daunting when you look at the legal duties required to hire someone. But we are here to help! So we have compiled this handy guide to help you on your journey. You will find all things here regarding any legal duties considering domestic employment.
What are my key legal duties as an employer?
Contract of Employment
You must provide your employee with a contract of employment. This can also be a written statement of employment particulars. This must be done within two months of their start date. The contract should lay out the terms and conditions of employment. It should also detail their start date. It should also state their place of employment, hours of work and holiday entitlement.
An offer letter is often given in conjunction with a contract of employment. This details the employee’s salary and what duties they are expected to undertake within the role.
Legal Checks on Employee
Is your employee legally allowed to work in the UK? As a domestic employer is your responsibility to undertake checks. This is to ensure that the individual is eligible to work in the UK. This can include checking their ID documents such as a passport or Visa.
Where a Visa is provided you should check if there are any restrictions that may affect the employee legally working. As well as taking note of any expiry date on the document. Just to ensure that an updated version is produced at the relevant time.
Registering as an Employer with HMRC
First things first: you must register with HMRC as an employer and set up a PAYE scheme. This needs to be done before your employee starts. You might choose to use a payroll service or an accountant. They will often set this up on your behalf. Once registered you will receive a Payroll scheme number. You will use this number throughout your time as a domestic employer.
All UK employers are legally obliged to offer a pension scheme to their employees. Your employee will be automatically enrolled in the pension scheme. That is if they meet the age and salary criteria. And you as a domestic employer will be notified to start paying contributions.
Currently, the criteria for automatic enrolment is an individual between the age of 22 and the state pension age. They must also be earning over £10,000 per annum. However, an employee who doesn’t meet the above criteria can still choose to opt into a pension scheme, should they wish.
All UK employers, including domestic employers, are legally required to have Employers Liability Insurance. Employers Liability Insurance protects you should your employee become ill or injured as a result of their job.
Some companies offer comprehensive employer liability insurance specifically for domestic employers. However, it is worth checking the particulars of any home insurance that you may hold. As in some cases, they include suitable cover for when you are employing an individual to work within your home.
As an employer, you have a duty to provide a statutory holiday entitlement to your employee. This counts even if they are part-time or temporary. A full-time employee is entitled to a minimum of 5.6 weeks’ holiday per year (28 days for a 5-day week). This is inclusive of bank holidays.
Firstly it is important to know the current National Minimum Wage requirements. You must keep this in mind when agreeing on a salary for your employee. Because the figure must be at or above these current requirements. As with any role, the employee’s salary is dependent on many things. This can be experience, but also qualifications of the individual. And the location of employment may also play a factor. We always recommend agreeing on a salary in gross. This is because it is more beneficial for both the employer and the employee.
There are several ways in which you can make sure all your legal duties as an employer have been met. One could be instructing a payroll company. Or you can find an accountant or HR service provider to support you.
This blog has been written by our friends at Stafftax, who are our recommended service provider for payroll and more.
Stafftax have been providing professional payroll services. As well as employment contracts, workplace pensions, and trusted HR advice. They have done this to thousands of domestic employers for more than 15 years. If you’d like support or guidance on these matters, the Stafftax team will be happy to assist.
If you want a personal referral from Polo & Tweed, then get in touch with us. And we’d be delighted to make a personal introduction.