Hiring your first employee is a turning point for any small business. It means you are no longer solely responsible for every task, but it also brings legal responsibilities that begin the moment someone accepts your job offer. For women-led businesses, this step often marks the shift from doing everything yourself to leading a team. Getting the basics right from the start protects your business, reduces risk and helps you build a productive, loyal workforce.

1. Start with a clear job description

Before you advertise, write a clear job description and person specification. Outline duties, required skills, experience, qualifications, reporting lines, working hours and place of work. This helps applicants understand the role and gives you an objective basis for shortlisting and performance management. It is especially important if you are employing friends or family; a written role prevents blurred boundaries and sets clear expectations on both sides.

2. Understand your legal responsibilities

UK employment law applies from the moment someone accepts your job offer. Key obligations include:

• Written statement of particulars: Since April 2020, employees and workers are entitled to a written statement from day one. It must set out pay, hours, holiday entitlement, job title, place of work, notice period and other terms.
• Contract of employment: While the written statement is a legal minimum, a full contract protects both parties and can include confidentiality, intellectual property, notice periods and post-employment restrictions.
• Payslips: You must provide itemised payslips on or before payday, showing gross pay, deductions and net pay.
• Working Time Regulations: Most workers must not work more than 48 hours a week averaged over 17 weeks unless they opt out, and are entitled to rest breaks and at least 5.6 weeks’ paid annual leave a year (pro rata for part-time).
• Disciplinary and grievance procedures: You should have clear, fair procedures and follow the Acas Code of Practice.

3. Register with HMRC and set up payroll

You must register as an employer with HMRC before the first payday, and you can do this up to four weeks in advance at GOV.UK: Register as an employer. You will need to operate PAYE if your employee earns at or above the PAYE threshold or receives expenses and benefits. Each time you pay staff you must report through Real Time Information (RTI). Most small employers use HMRC-recognised payroll software or an accountant to manage this.

4. Pay at least the National Living Wage or Minimum Wage

From April 2024, the National Living Wage is £11.44 an hour for workers aged 21 and over. The National Minimum Wage rates are £8.60 for 18-20 year olds and £6.40 for under-18s and apprentices. These rates usually rise each April, so check GOV.UK: National Minimum Wage rates before advertising. You must keep payroll records for at least three years and be able to show you have paid correctly.

5. Enrol eligible staff into a workplace pension

Under automatic enrolment, you must enrol eligible staff into a qualifying pension scheme and contribute to it if they are aged between 22 and State Pension age, ordinarily work in the UK and earn more than £10,000 a year (2024/25). The minimum total contribution is 8% of qualifying earnings, with at least 3% from you. Qualifying earnings are currently between £6,240 and £50,270 a year. The Pensions Regulator has a duties checker and model letters to help you comply.

6. Recruit fairly and carry out right-to-work checks

Advertise through your network, local jobcentres, the Find a Job service, and specialist jobs boards. Avoid discriminatory language in adverts and treat all applicants consistently. Before someone starts work, carry out a right-to-work check using the online right-to-work service or approved documents. Keep copies of documents and record the date of the check; failure to do so can lead to a civil penalty of up to £20,000 per illegal worker.

7. Get employers’ liability insurance

Almost every UK employer must have employers’ liability insurance covering at least £5 million. It protects you if an employee is injured or becomes ill because of their work. You can be fined £2,500 for every day you are uninsured, and £1,000 for not displaying the certificate. Display your certificate where staff can see it or provide it digitally.

8. Provide a safe workplace

Health and safety law applies even if you run a home-based business or employ just one person. Carry out a risk assessment, provide any necessary training and equipment, and make sure employees know how to report accidents. The Health and Safety Executive has free templates for low-risk workplaces.

9. Communicate, motivate and manage performance

Once someone is in post, keep them engaged with regular one-to-ones, clear priorities and constructive feedback. Recognise good work and address problems early. A simple induction plan, probationary period and open-door culture can prevent misunderstandings and reduce turnover. If you offer hybrid or remote working, set clear expectations about availability, communication tools and performance.

10. Keep up to date

Employment rules change regularly, with annual updates to minimum wage, tax thresholds and pension contributions. Bookmark GOV.UK: Employing people, Acas and HMRC for reliable, free guidance. If you are unsure about contracts, dismissal, discrimination or redundancy, seek advice from a qualified HR professional or solicitor before acting.

Taking on your first employee can feel daunting, but careful preparation turns it into a positive step. By putting clear terms, fair pay, statutory enrolments and good communication in place, you create the foundation for a successful working relationship and a stronger, more resilient business.