FAQs

If you employ people, you already have HR responsibilities.There isn't a magic number of employees where HR law suddenly starts applying.Whether you employ 2 people or 200, you need to understand your responsibilities as an employer.And being a family business doesn't remove those responsibilities.In fact, small businesses can sometimes be more exposed because informal arrangements replace proper processes."We've always just sorted it out between ourselves" works brilliantly until it doesn't.That's why having your basic HR foundations in place matters.

Not simply because you're a family business.If a family member is employed by a business, their employment status and the legal rights that come with that status still need to be considered.There are some specific rules around family members in certain circumstances for example, National Minimum Wage rules can treat a family member living in the employer's home and participating in the running of the family business differently.But you shouldn't assume that being related means employment law doesn't apply.The safest approach is to look at the actual working relationship and the legal status of the person.

Treat the employment relationship properly.That means being clear about their role, pay, hours, holidays, responsibilities and other terms.If they are an employee or worker, they have employment rights based on their status.The fact that they are also your son, daughter, husband, wife or another relative doesn't automatically remove those rights.And there is another practical reason to get this right:Family relationships can change.

This is where informal HR can become a serious problem.Imagine a business where:Dad owns the company.His son works there.His daughter works there.His daughter's husband works there.Everyone gets on.Until they don't.Now imagine there is a disagreement, a relationship breaks down, somebody is disciplined, somebody is dismissed, or someone believes they have been treated differently.Suddenly:"He's family" isn't a management process.Having clear employment documentation, policies, responsibilities and procedures doesn't make a family business less personal.It gives everyone clarity when things become difficult.

You should still be clear about the employment relationship.The employer should know what role the person has, what they are paid, what their hours are, what leave arrangements apply and what rules and procedures apply to them.It can also be important to distinguish between family relationships and employment decisions.A family member should not simply be assumed to be outside normal workplace processes.

Yes. If they are an employee or worker, you still have a legal obligation to provide the required written particulars.The principal statement must be provided on or before the first day of employment.The wider written statement must generally be provided within 2 months.This applies regardless of whether you've known someone for 20 years or met them yesterday."He's my brother" isn't a substitute for written employment particulars.

Don't assume that means there is no employment contract.Employment contracts can exist through the agreement and reality of the working relationship, even where everything hasn't been written down.The written statement of employment particulars is a separate legal requirement.Not having proper written documentation can make it much harder for everyone to understand what was actually agreed.And if there is a dispute, uncertainty becomes a problem for both sides.

There is no blanket legal requirement for every employer to have an employee handbook.But an employee handbook can be an extremely useful way of bringing workplace rules, policies, expectations and procedures together.The important question isn't simply:"Do I legally have to have a handbook?"It's: "Have I clearly told my employees how we expect this business to operate?"

There is no magic number.If you employ people, you have HR responsibilities.The complexity grows as your workforce grows, but the basic responsibilities don't suddenly appear when you reach 5, 10 or 20 employees.If you have employees today, you already have HR.The question is whether you have the foundations to manage them properly.

There isn't one universal list of policies that every small business must have.The right policies depend on your business, workforce and legal responsibilities.However, small employers need to think carefully about areas such as:• Disciplinary and grievance procedures • Health and safety • Equality and discrimination • Holiday and absence • Data protection and confidentiality • Family-related leave • Sexual harassment prevention • Whistleblowing where relevant • Working arrangements and expectationsThe objective isn't to collect 50 policies.It's to have the right foundations for the business you actually run.

You need to deal with disciplinary matters fairly and reasonably.The Acas Code of Practice on disciplinary and grievance procedures sets out principles employers should follow.If a disciplinary dispute reaches an employment tribunal, the tribunal can take the Acas Code into account.Being a small employer doesn't mean you can simply sack someone because you're unhappy with them.Having a clear process gives both the employer and employee clarity about what happens when something goes wrong.

Don't assume that short service means there are no legal risks.Some employment rights apply from day one, including protection from discrimination and automatically unfair dismissal reasons.There are also changes to unfair dismissal qualifying rules coming into force in 2027.The circumstances of any dismissal matter.Before dismissing someone, get appropriate advice on the specific situation rather than assuming "they've only been here a few months" means you can do whatever you want.

Be careful.Employment decisions should be based on legitimate business reasons and applied appropriately.If you give one employee special treatment because they're family, or treat another employee less favourably because they aren't, you could create problems.Equally, if a family member is genuinely the best person for a role, that's fine  but the business should still be able to explain its decisions.Clear roles, responsibilities and processes help remove the "because they're family" grey area.

Employers must carry out a right to work check before employing someone.The way the check is carried out depends on the person's circumstances.Employers should apply right to work checking consistently rather than deciding who "looks like" they might need immigration permission.British and Irish citizens have specific ways they can evidence their right to work.Getting right to work checks wrong can be expensive. Employers can face a civil penalty of up to £60,000 for each illegal worker where the relevant conditions for a penalty are met.

If an employee has time-limited permission to work, the employer needs to carry out a follow-up right to work check before the existing permission expires.This is something that should be recorded and monitored rather than left to memory.A proper HR system should help you know when action is required.

The Fair Work Agency launched on 7 April 2026.It brings together enforcement responsibilities in several areas of labour market law, including National Minimum Wage, employment agencies and employment businesses, gangmaster licensing and serious labour exploitation and abuse.The Agency has powers to investigate and enforce within its remit.It doesn't mean somebody from the Fair Work Agency is going to inspect every small business for every aspect of employment law.But it does reinforce an important message:Being a micro or small employer doesn't put you outside employment-law enforcement.

Its current enforcement responsibilities include areas such as National Minimum Wage compliance, employment agency and employment business regulation, gangmaster licensing and serious labour exploitation and abuse.For a small employer, the lesson is simple:Don't wait until an enforcement body, employee complaint or workplace dispute exposes a gap in your systems.Get the basics right before you need them.

National Minimum Wage applies to eligible workers and employees.The rates change over time, so employers need to make sure they are using the correct current rate for the person's age and circumstances.Underpayment can lead to enforcement action, repayment of arrears and financial penalties.The Fair Work Agency now has responsibility for National Minimum Wage enforcement.This is one of the areas where "we've always paid them that" isn't a defence.

Employers have record-keeping responsibilities, including records relevant to National Minimum Wage compliance.The exact records required depend on the legal obligation involved.Good record keeping is also part of having a defensible HR system.If someone asks you six months from now:"What were they paid?""What hours did they work?""What holiday did they take?""What did they agree to?"you don't want the answer to be:"I think it was on WhatsApp."

Employers have a legal duty to take reasonable steps to prevent sexual harassment of their employees in the course of employment.This preventative duty has applied since October 2024.A policy can be part of the reasonable steps an employer takes, but having a document alone is not enough.Employers should consider what reasonable steps are appropriate for their organisation, including training, communication and reviewing workplace practices.

This is exactly why informal family-business arrangements can become difficult.A grievance should be handled fairly and appropriately, even when the people involved know each other personally.If the grievance concerns the employee's manager, the business should consider who is the appropriate person to handle it.You don't want the person being complained about deciding the outcome of their own complaint.

It happens.People change.Circumstances change.Performance changes.Relationships change.The fact that someone has been brilliant for five years doesn't mean you should ignore poor performance today.Good HR foundations help you separate:"The person I know"from:"The employee and the role they are performing."That makes difficult conversations much easier to manage.

That's exactly why clear written policies, employment particulars and communication matter.If you expect employees to follow a particular rule or process, they need to know what that rule or expectation is.A business can find itself in a much stronger position when it can demonstrate:"This is the policy.""This is what you were told.""This is what happened.""This is what we did next."

That's fantastic.But length of service isn't a substitute for HR foundations.In fact, long-serving employees can create more complexity because arrangements may have evolved over years.Pay may have changed.Hours may have changed.Responsibilities may have changed.Benefits may have been introduced.Informal agreements may have developed.The question is:"Does the documentation we have today accurately reflect the employment relationship today?"