Employment law is designed to safeguard employee rights, but it also removes ambiguity about what's expected of both parties. So if you get it right, it can be good for you as an employer too.
Small business owners can't be expected to know the details of every piece of employment law. However, knowing a few basic yet important facts could protect you from potentially costly legal action.
Rules about working hours
Unless they opt out (and confirm this in writing), employees don't have to work more than an average of 48 hours a week over a 17-week period.
They have the right to at least one full day off during every seven, in addition to their daily rest period (20 minutes paid, if the working day is longer than six hours). Employees are entitled to a daily rest period of 11 consecutive hours in every 24 hours.
Full-time employees are entitled to 5.6 weeks' paid annual leave per year, while part timers receive pro-rata entitlement.
Every employee is entitled to receive the minimum wage applicable to their age. The new National Living Wage has come into force for pay periods commencing on or after 1 April 2016. It is applicable to employees aged 25 and over and is payable at £7.20 per hour.
The National Minimum Wage for workers aged 21 to 25 is £6.95 per hour from 1 October 2016 (previously £6.70). The development rate (for 18 to 21-year-olds) is £5.55 per hour (previously £5.30) and the rate for 16 to 17-year-olds is £4.00 per hour (previously £3.87). Apprentices aged under 19 and those in the first year of their apprenticeship are entitled to £3.40 per hour (previously £3.30). Apprentices aged over 19 and those who have completed more than one year of their apprenticeship are entitled to receive the full rate of National Minimum wage applicable to their age.
Fixed-term employees have the right to the same pay as comparable permanent staff. Part-time workers are entitled to pro-rata pay and holiday.
In a working year, employees are entitled to at least statutory sick pay on their fourth day of absence. They don't have to be paid for the first three days.
Employees who are parents, or who are about to become parents, have a number of rights. A woman cannot be sacked or made redundant because she's pregnant. She must be given time off for antenatal care and can take 52 weeks' statutory maternity leave. To qualify for statutory maternity pay (SMP) – which can only be paid for 39 weeks - she must have worked for you for 26 weeks by the end of the fifteenth week before the week her baby is due.
She is entitled to 90% of her average weekly earnings (AWE) for the first six weeks, then the standard weekly rate of £139.58 or 90% of her AWE if this is lower than £139.58. Employees who don't qualify for SMP might qualify for maternity allowance. Employers can recover 92% of their SMP payments from HMRC (103% if their total NI payments are £45k or less). Women can't return to work within two weeks of giving birth (four weeks if they work in a factory).
Paternity leave allows eligible employees to take one or two weeks' paid leave (paid at £139.58 or 90% AWE if this is lower than £139.58) at or around the period in which the baby is due or is born.
Fathers, partners and parents-to-be have the right to take unpaid time off work to attend up to two ante-natal appointments.
When adopting a child, one of the adoptive parents is entitled to six months' paid and six months' unpaid leave. If their partner works, he or she can take paternity leave.
Shared Parental Leave
Shared Parental Leave (SPL) and Statutory Shared Parental Pay (ShPP) gives parents more flexibility to arrange time off in the year after the birth or adoption of their baby. A new mother will be able to share up to 50 weeks' leave with her partner after taking the initial two weeks off following the birth of her baby (four weeks if the work is in a factory).
Leave can be taken in up to three separate blocks and parents can choose how much time off each of them will take. SPL and ShPP must be taken before the baby's first birthday (or within one year of adoption).
SPL can be used either alongside, or instead of, traditional maternity, adoption and paternity leave.
Employers must consider requests for flexible working conditions from all employees with at least 26 weeks' service. [Previously only parents and carers of children 16 and under, disabled children under 18 and carers of dependant adults qualified.]
The Government has introduced a new form of employment contract under which employees are given shares in the company for which they work. The shares benefit from favourable tax treatment. In return for these shares, the employee accepts fewer employment rights - such as giving up the right to request flexible working.
All employers are required to 'auto-enrol' eligible employees into, and contribute towards, a workplace pension (being phased in since October 2012 starting with the largest employers). Unless your employees specifically opt out, you will have to provide them with access to a contributory pension and make contributions towards their pension funds (rising from 1% to 3% by October 2018).
You must make 'reasonable adjustments' to your premises if this enables suitably qualified people with disabilities to work for you.
Health and Safety
As part of your health and safety obligations, you must provide a secure, safe and healthy working environment, which also grants sufficient privacy to employees.
You mustn't undermine the relationship of trust and confidence that should exist between you and your staff, so don't engage in gossip or disclose personal information. Employees can belong to a trade union and they're legally entitled to alert the relevant authorities if your actions are illegal or dangerous.
You also have legal responsibilities when recruiting and managing staff.
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