Employment Overview
Navigating UK employment legislation can be complex without local legal specialists.
At N2S, we simplify compliance, making it clear and straightforward for our clients and customers to grow and excel in UK.
United Kingdom (UK) Country Guide
N2S provide expert solutions for businesses looking to expand or grow into the UK, including compliance, payroll management and employment support. Request our Services to find out more about how we can help you.
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Onboarding
1. Onboarding in the UK can be straightforward for providers, like N2S, that have standard templates and processes.
2. Note that employment contracts must be in writing.
Engagement Types
There are two core engagement types in the UK:
1. Employment – which can permanent or fixed term
There is a subcategory of engagements that can be a “worker” contract, rather than an employment contract.
2. Independent contractor engagements – which should be project or time limited
There is a subcategory of engagements that can be a “worker” contract, rather than an employment contract.
2. Independent contractor engagements – which should be project or time limited
Customers should consider carefully how they wish to engage their workforce and N2S can support customers in implementing compliant and scalable solutions.
IC Compliance
Customers should ensure that Independent Contractors (ICs) that they use are appropriately vetted and classified. This will help protect the business from misclassification claims.
Key considerations include the below, if you require further information or support, please contact us.
Contractors should be distinct from employees and be in business on their own account .
The following elements should be considered when making a classification determination:
1. Control
2. Subcontracting
3. Equipment
4. Financial risk
5. Management
6. Contracts
7. Opportunity for profit
The UK has a contractor classification regime known as IR35, which has specific formalities that N2S and its customers must follow. N2S can walk you through this process step by step.
Social Security/Taxes
1. Employer’s National Insurance rate is generally set at 13.8%, Apprenticeship Levy of 0.50%.
2. Employer minimum pension contribution is set at 3% (totalling 8% with a 5% employee contribution).
3. This brings total employer tax and basic social security costings to 17.3%.
Minimum Wages
1. The UK does have a minimum wage which varies each year.
2. There are certain exemptions for specific types of work, benefits provided and employees under specific age thresholds (typically 18).
Working Hours
1. Standard working hours in the UK are 8 hours per day and between 37.5 and 40 hours per week.
2. The standard workweek is Monday to Friday.
3. There are no statutory overtime rules, beyond ensuring that employees and workers do not fall below the national minimum wage.
Statutory Leaves
1. In the UK, annual leave is up to 28 days per year (which typically includes 8 public holidays).
2. Sick leave is up to 28 weeks per year, at a statutory sick pay rate which is set each year.
3. Maternity leave in the UK is up to 52 weeks; and maternity pay varies depending on the eligibility.
4. Paternity leave in the UK is up to 2 weeks; and paternity pay varies depending on the eligibility.
5. Parental leave is up to 18 weeks of unpaid leave for each child up to their 18th birthday.
Termination
1. The termination process in the UK is relatively straightforward – terminations over two years must “a fair reason” for dismissal.
2. Notice periods are stipulated in the employment contract (or any collective agreement) and is usually linked to the length of service.
3. The total employer notice period varies according to length of service, starting at 0 notice for employments under 1 month of service and increasing to 12 weeks after 12 years of service.
4. Employees are entitled to statutory redundancy pay after the employee has completed 2 years of service. This pay threshold will vary each year, and will also depend on the length of service and age of the employee.
