Taking on your first employee is a milestone, and it comes with legal obligations you must get right from the start. Missing a step can mean fines, tribunal claims or tax problems. Here is a practical, plain-English checklist for employers in England and Wales.
1. Check the worker's right to work in the UK
Before employment starts, you must carry out a right-to-work check to confirm the person can legally work in the UK (verifying documents, or using the Home Office online checking service / an Identity Service Provider). Keep a dated copy. Getting this right gives you a statutory excuse against the civil penalty for illegal working (which can be substantial per worker).
2. Register as an employer and set up PAYE
Register with HMRC as an employer (usually before the first payday) and operate PAYE to deduct income tax and National Insurance from wages and pay employer's NI. You'll report pay to HMRC in real time (RTI).
3. Pay at least the minimum wage
Pay at least the National Minimum Wage / National Living Wage for the worker's age band (rates change each April). Underpayment carries penalties and naming.
4. Get employers' liability insurance
By law you must have employers' liability (compulsory) insurance (Employers' Liability (Compulsory Insurance) Act 1969), with cover of at least £5 million, from an authorised insurer, and display/keep the certificate. This covers claims if an employee is injured or made ill by work.
5. Give a written statement of employment particulars
From day one, employees (and workers) are entitled to a written statement of the main terms (Employment Rights Act 1996, s 1), covering pay, hours, holiday, place of work, notice and more. In practice, issue a proper written contract of employment.
6. Enrol eligible staff in a pension (auto-enrolment)
Under the Pensions Act 2008, you must automatically enrol eligible workers into a workplace pension and make employer contributions (with the worker contributing too), and complete a declaration of compliance with The Pensions Regulator.
7. Meet health, safety and other duties
- Comply with health and safety law, carry out risk assessments, and provide a safe workplace (and a health-and-safety policy if you have five or more employees).
- Respect working time rules (maximum weekly hours, rest breaks, paid holiday, at least 5.6 weeks statutory).
- Comply with family-friendly and discrimination law (Equality Act 2010) from recruitment onwards.
8. Handle data protection
You will process employees' personal data, so comply with the UK GDPR / Data Protection Act 2018, have a privacy notice for staff and keep data secure.
9. Good practice from the start
- Use a fair, non-discriminatory recruitment process and keep records.
- Put policies in place (disciplinary, grievance, etc.) reflecting the Acas Code.
- Set up payroll (in-house or via an accountant/bureau).
Key takeaways
- Before day one: carry out a right-to-work check and arrange employers' liability insurance (min £5m).
- Set up PAYE with HMRC, pay at least the minimum wage, and run payroll/RTI.
- Give a written statement of particulars (day-one right) and auto-enrol eligible staff in a pension.
- Comply with health & safety, working time, discrimination and data-protection law, and follow the Acas Code for fair procedures.
Sources
- Immigration, Asylum and Nationality Act 2006 (right-to-work checks and civil penalties); HMRC PAYE/RTI rules
- Employment Rights Act 1996, s 1 (written statement of particulars); Employers' Liability (Compulsory Insurance) Act 1969
- Pensions Act 2008 (auto-enrolment); National Minimum Wage Act 1998; Working Time Regulations 1998; Equality Act 2010; UK GDPR / Data Protection Act 2018
--- This article is general information about the law of England & Wales as at 2026, not legal advice. For advice on your circumstances, consult a qualified solicitor or HR professional.