Moving from lone trader to employer is a positive step and also a significant legal one, as a raft of employment rules kick in. Here are 5 tips to bear in mind when hiring employees.
- Calculate the cost. You will have to pay the minimum wage of €9.15 per hour at least (from 1 January 2016). Some industries have a higher minimum than the national minimum wage so make sure you know which rate applies. You also need to work out the pay reference period to avoid any confusion about how pay is calculated. Make sure you calculate your PRSI contributions and any other costs, like insurance, so that you can see the full cost to your business of employing someone. You will have to register as an employer with Revenue, so read their guidelines and requirements.
- Decide the length of the contract. You can employ someone on a fixed term contract, but you cannot renew a fixed term contract indefinitely. Most employment rights apply to fixed term employees and they can be deemed to be permanent employees. Certain rights and remedies for employees, like the right to bring an unfair dismissals claim or the entitlement to a redundancy payment, kick in after specified lengths of service and you should be familiar with these from the outset. You should also set a probation period during which the employee can be let go if things are not working out.
- Be fair when hiring. Equality law prohibits workplace discrimination and it applies to hiring decisions. The prohibited forms of discrimination are wide and cover a range of characteristics like gender, family status and disability (which is a wide category and includes many illnesses). These equality rules continue to apply during the period of employment so it is important to be aware of what conduct is prohibited and what obligations you will have to accommodate your employees, depending on their circumstances. You should also be careful when asking for information from prospective employees or carrying out background checks. For example, you are not allowed to require someone to make a data access request to another organisation so that you can see records about them.
- Set the terms. Employers are required to provide employees with a certain amount of minimum information about their employment, including their rate of pay and pay reference period, notice periods and other information. However, employers often go further and include more comprehensive terms in an employment contract. Such a contract should include a number of key employment policies and the disciplinary procedures that will apply. This is a complex area which requires careful consideration and advice.
- Use caution when terminating. Employment contracts might terminate when a fixed term ends or on the basis of redundancy but extreme caution should always be used when terminating employment, in particular if termination is for disciplinary or performance reasons. In general, terminating someone’s employment “on the spot” will be difficult to justify later.
Employment law is complicated and the obligations on employers are extensive. The above is a brief outline of some of the main issues arising when hiring an employee but it is far from comprehensive. Specific advice should always be taken in the event of any doubt.
PG McMahon Solicitors have been advising SME employers and employees in small and large businesses for decades. We have extensive experience in advising on contracts of employment, data protection in the workplace, disputes and employment law hearings and discrimination.