Small business start up - what are your obligations to employees ?

As a business start-up you will need to consider whether and at what point you will be wanting to employ people. It may not be in the immediate future, but having a plan will help hugely in the event that your business takes off and you need extra hands. It may be that you want to take on a trainee or an apprentice, permanent staff or contract staff, freelancers or simply voluntary help. Any or all of these are fine but you need to know what your obligations are to them in advance so they can be in place as and when you need to employ staff.

There will be a number of legal and contractual observations that you have towards staff whatever their status in terms of employment. This means simply that whether they are employed by you or they are freelance or contract staff then you must allow certain obligations. These may revolve around tax or legal obligations, as will be defined by your local area or state. Knowing what these obligations are is important as you will need to comply with, and they may affect your decision as to whether you employ staff or use freelance or contract staff.

If you employ staff on this basis, obligations you have will be different to the obligations you have if you use freelance or contract staff. If you use freelance or contract staff they will effectively be self-employed or employed by another company and your obligations to them will be contractual and specified by way of any type of contract you may have. If you use contract freelance staff that it is important to stipulate the conditions upon which they used, and what levels of remuneration are agreed upon and for what time period.

Bear in mind also that if you use a freelancer or contract staff there is the question of whether they are acting as your agent will not, whether they are acting in their own independent capacity or acting on your behalf and thereby effectively acting as your agent. If acting as your agent then it needs to be clear what their obligations are, what your operations are and who is liable for what. Any employees of the business who is employed by you and paid by you is effectively a representative of the business, and will act and carry out work of the business on your behalf. It is important therefore that you have trust and confidence in the people you employ, and this can be quite a difficult or taxing process.

When considering the obligations to any new employee, there are a number of categories to think about. There is firstly the financial package that you have agreed with an employee, which needs to cover areas of salary, pension entitlement, health insurance, sick pay, possible mate
ity or pate
ity leave, company car and any other perk such as an expense account that may be relevant. It is important to specify how and when the employee is paid, either weekly or monthly or at the end of a particular job and whether overtime is included or not and at what rate. It is important to be clear about these obligations at the outset otherwise you are simply storing up problems for the future.

Other obligations to an employee can be categorised in a general sense under the heading health and safety. These obligations can be far-reaching and wide and are extremely important. It is important for you as an employer to know what your legal obligations are under any local or state statute or government statute. These must be complied with and failure to do so could be extremely damaging for your business both financially and personally.

Creating a safe environment for someone to working is important. It is equally important from a point of view of customers, as well as for yourself and any family or visitors who may frequent the premises.