What HR Paperwork Does a Small Business Need When Hiring Its First Employee?

 

Hiring your first employee is an exciting milestone for any small business. It means your business is growing, but it also brings new responsibilities as an employer.

From employment contracts and right-to-work checks to payroll registration and workplace policies, there are several important documents and checks to get in place before your new employee starts work.

The good news is that you don’t need to make the process complicated. With the right paperwork prepared in advance, you can welcome your first employee with confidence and establish good HR practices from day one.

In this guide, Tick HR Solutions explains the key HR documents and employer responsibilities to consider when hiring your first member of staff in the UK.

1. Employment contract and written statement of employment particulars

One of the first things to prepare is an employment contract.

An employment contract sets out the terms of the working relationship between you and your employee. It helps both parties understand what is expected and provides a clear reference point if questions or disagreements arise.

Your contract should cover important details such as:

• Job title and main responsibilities.
• Start date and place of work.
• Salary or hourly rate and payment arrangements.
• Working hours and overtime arrangements.
• Holiday entitlement.
• Probationary period, if applicable.
• Notice periods.
• Confidentiality and any relevant intellectual property provisions.
• Any other contractual benefits or conditions.

You must also provide a written statement of employment particulars. This is a legal requirement and is separate from the concept of an employment contract, although the information can be included within the contract.

The principal statement must be provided on or before the employee’s first day of work. Further required information must be provided within the applicable timeframe, generally within two months.

The documents should be tailored to the role and the business rather than relying on a generic template that may not reflect your actual arrangements.

Tick HR tip: Getting the contract right at the beginning can help prevent misunderstandings later. Make sure the terms reflect how the employee will genuinely work, including their hours, responsibilities and pay.

2. Right-to-work checks

Before your new employee starts work, you must carry out the appropriate right-to-work check to establish that they are legally permitted to work in the UK.

The correct process depends on the individual’s circumstances. It may involve checking eligible original documents, using the Home Office online service or using an approved digital verification route where appropriate.

You should:

• Complete the prescribed check before employment begins.
• Follow the correct procedure for the type of check being used.
• Keep a secure record of the check and the date it was completed.
• Arrange follow-up checks where required for individuals with time-limited permission to work.

Apply the same fair and consistent process to candidates without discriminating on the basis of nationality or other protected characteristics.

Right-to-work checks are not simply an administrative task. Completing them correctly helps demonstrate that you have met your legal responsibilities.

For the latest guidance, visit the GOV.UK right-to-work checking guidance.

3. New starter information and payroll paperwork

You will need to collect certain information from your new employee so that you can set up payroll and pay them correctly.

This usually includes their:

• Full name and contact details.
• National Insurance number, where available.
• Bank details for salary payments.
• P45 from their previous employer, if they have one.
• Relevant tax and starter information.

If your employee does not have a P45, you may need them to complete HMRC’s starter checklist.

If this is your first employee, you will normally need to register as an employer with HM Revenue and Customs (HMRC) before your first payday. You will also need to arrange a suitable payroll process, either by managing it yourself or using an accountant or payroll provider.

Payroll records should accurately record payments, deductions, tax and National Insurance information, with the necessary reports submitted to HMRC on time.

It is worth deciding early who will be responsible for payroll, what information they need and how changes to salary, working hours or employee details will be communicated.

Find out more in the official GOV.UK guide to registering as an employer.

4. Staff handbook and HR policies

A staff handbook is a useful way to explain your workplace rules, procedures and expectations. While not every business needs a lengthy handbook, having clear written policies helps employees understand how things work and gives managers a consistent approach.

Depending on your business and the role, you may want to include policies covering:

• Annual leave and holiday booking.
• Sickness absence and reporting procedures.
• Disciplinary and grievance procedures.
• Health and safety.
• Equality, diversity and inclusion.
• Bullying and harassment.
• Data protection and confidentiality.
• IT, email and acceptable use of company equipment.
• Flexible working and homeworking, where relevant.

Some information must be provided by law, and certain procedures and policies will be particularly important depending on the circumstances of your business. Other policies are good practice and help you manage people consistently.

Your policies should be proportionate to the size and nature of your organisation. A small business may not need the same level of documentation as a large employer, but it still needs to meet its legal obligations.

Remember to communicate policies to your employee, make sure they can access them and review them when legislation or working practices change.

5. Workplace pension information

Employers have workplace pension duties even when they are employing their first member of staff.

You need to assess your employee against the automatic enrolment criteria, arrange a qualifying workplace pension where required and make the necessary contributions for eligible staff.

You will also need to provide employees with the relevant pension information and complete the required employer administration.

Not every employee will qualify for automatic enrolment immediately, but you must understand the rules and apply them correctly. Duties can also change if an employee’s age or earnings change.

You can find more information in the GOV.UK workplace pensions guidance for employers.

6. Employers’ liability insurance

Before your employee starts, check whether your business needs employers’ liability insurance.

Most employers must have this insurance, subject to specific exceptions. It helps protect the business if an employee becomes ill or is injured as a result of their work and makes a claim.

You should arrange appropriate cover with an authorised insurer and make the certificate available to employees as required.

Do not assume that a small business with only one employee is exempt. Check the rules for your particular circumstances.

Further details are available in the GOV.UK guide to employers’ liability insurance.

7. Health and safety records

You are responsible for providing a safe working environment, even if you employ only one person.

The documents and records you need will depend on the work being carried out and the risks involved. These may include:

• A suitable and sufficient workplace risk assessment.
• Health and safety arrangements and instructions.
• Records of relevant training and inductions.
• Equipment checks or maintenance records, where applicable.
• Fire safety information and emergency procedures.
• Records of any required protective equipment or specialist training.

If your business has fewer than five employees, there are specific rules about recording certain risk assessment findings. However, you still need to assess risks and take appropriate action to protect employees.

Consider the practical arrangements as well as the paperwork. Your new starter should understand how to work safely, what to do in an emergency and who to approach if they have concerns.

The Health and Safety Executive provides guidance for small businesses.

8. Recruitment, induction and training records

Although not every item in this section is a standalone legal requirement, keeping sensible records from the start helps you manage your employee fairly and consistently.

Useful records may include:

• The job description and person specification.
• The offer letter and confirmation of acceptance.
• Interview and selection records, where appropriate.
• An induction checklist.
• Training completed and any training still required.
• Equipment issued to the employee.
• Probation review dates and notes.
• Relevant qualifications or professional registrations, where necessary for the role.

An induction helps your employee understand the business, their responsibilities and how to carry out their job. It is also an opportunity to explain your policies, introduce key contacts and identify any support or training they need.

Agreeing objectives and arranging an early review can help both you and your new employee understand whether they are settling into the role successfully.

Keep recruitment and employee records secure, limit access to people who need the information and retain them in line with appropriate data protection and retention practices.

9. Personal data and employee records

As an employer, you will hold personal information about your employee. This might include contact details, payroll information, emergency contact details and, where necessary, information about health or adjustments.

You should have a clear process for collecting, using, storing and protecting this information.

Make sure you:

• Collect only information you genuinely need.
• Explain how employee data will be used, usually through an appropriate employee privacy notice.
• Restrict access to confidential records.
• Store electronic and paper records securely.
• Have suitable retention and deletion arrangements.
• Handle any sensitive information in accordance with the relevant data protection requirements.

Health information and other special-category personal data require particular care and an appropriate lawful basis for processing.

Good record-keeping does not mean keeping everything forever. Decide what you need to retain, why you need it and when it should be securely deleted.

Your first-employee HR checklist

Before your new employee starts, use this checklist to identify the main tasks you need to complete.

• Prepare an employment contract and written statement of employment particulars.
• Complete the appropriate right-to-work check.
• Collect the information needed to set up payroll.
• Register with HMRC if you are employing someone for the first time.
• Arrange payroll and understand your reporting responsibilities.
• Assess workplace pension duties.
• Check employers’ liability insurance requirements and arrange cover where necessary.
• Prepare relevant HR policies and explain how to access them.
• Complete appropriate health and safety risk assessments and induction arrangements.
• Set up secure employee records and provide relevant privacy information.
• Plan the employee’s induction, training and any probation reviews.

Some tasks need to be completed before employment begins, while others have specific deadlines after the start date. Do not treat the checklist as a reason to delay a mandatory check or document until later.

What happens if you get the paperwork wrong?

Missing documents or unclear arrangements can lead to misunderstandings, payroll problems and potential legal disputes.

For example, an incomplete written statement may leave uncertainty about working hours, holiday entitlement or notice periods. Missing right-to-work checks can expose an employer to significant penalties. Poorly managed employee records can also create data protection risks.

Getting your HR foundations right from the beginning is usually easier than trying to resolve gaps once an issue has arisen.

You do not need to build a complicated HR department to employ your first person. You do, however, need to understand your responsibilities and put proportionate, reliable processes in place.

Need help getting ready to employ your first member of staff?

Hiring your first employee is a significant step, and it is understandable if you are unsure which documents you need or what your legal responsibilities involve.

Tick HR Solutions supports businesses with employment contracts, HR policies, employee documentation and practical HR advice. Whether you are taking on your first employee or growing an existing team, we can help you put the right foundations in place.

Contact Tick HR Solutions to discuss your HR requirements and get your business ready for its next stage of growth.