Being an employer

There are many benefits to employing your own staff. You can choose who you employ and decide how, where and when your personal assistance or services are provided. You can benefit from continuity of the same personal assistant, which enables you to build greater trust and flexibility into the working relationship than is often possible with an agency.

If you decide to employ your own staff, from the start of your Direct Payments you will receive an additional payment called a start-up payment of £200. This is a one off initial payment to cover costs such as advertising, employers insurance etc. Start-up payments are not paid to you if you decide to use an agency. This is because the agency pays these costs.

The Direct Payments Advisory Service will provide support and advice to assist you with recruitment and your responsibilities as an employer. Often people use a Payroll Service to take care of salaries, National Insurance and PAYE matters. The Direct Payments Advisory Service can advise you and put you in contact with a range of payroll companies (PDF: 68KB).

If you decide to employ your own staff you will have the responsibility of being a reasonable employer and abide by good employment practices and employment law.

As an employer you will be expected:

To provide a safe environment and working practices for the people you employ.
To employ lawfully i.e. to recruit individuals who have a National Insurance number, a Home Office Work Permit, a passport or other documents that allow them to find employment in England .
Not to discriminate on grounds of race, sex, sexual orientation, disability, age etc - you can however advertise for a person who is same gender as yourself, as this is a “genuine occupational qualification” for the job.
Pay staff (including registering with the Inland Revenue, paying tax and NI for staff and as an employer). Payroll companies (PDF: 68KB) can deal with these responsibilities on your behalf.
To resolve staffing issues in a reasonable manner by following standard disciplinary procedures (PDF: 64KB)

We have provided a list of useful employment related telephone numbers for your information which you might find useful.

Recruiting

When you recruit you will need to provide prospective employees with an application form and we have provided an example Job Application form (PDF: 31KB) for you to use.

You will need to provide your employee with a Job Description (PDF: 24KB) and Employment Contracts. We have provided two draft employment contracts one for Personal Assistant (hourly) (PDF:33KB) and one for a Live In Personal Assistant (PDF:31KB).

The Direct Payments Advisory Service are available to help you. Many people who use direct payments chose to employ staff directly.

Calculating wages

Once you know the amount of your Direct Payments you will be able to calculate how much you to pay your workers. It is very important to do this in order to avoid getting into debt later on. If you use a payroll service they will assist you with this but if you decide to do this yourself then an advisor will assist you.

You may already be aware that when you employ someone there are more costs than wages to consider. You will also have responsibilities for paying employers' National Insurance contributions, holiday / sick pay and employers' public liability insurance. These extra costs, apart from your employees' wage, are often called "on costs" or "overheads".

We recommend that you put aside a quarter of your direct payments for you to meet these “on costs”. This is a useful baseline figure, however individual wages calculations may vary according to circumstances. An advisor or a payroll company will assist you with this.

Please remember your employee’s take home pay (net pay) will be less than the gross wage (pay before any deductions). It is important to clarify with your potential worker when discussing wages, whether you are meaning gross or net pay.

Statutory holiday pay

An employee is entitled to four weeks holiday pay annually. Whilst the employee is on holiday they will receive their full wage for those four weeks. If you need to employ another personal assistant during this time you will need to put aside a monthly amount to cover their wages.

You could assume to pay the replacement assistant the same wages as your permanent employee. If you, however, you use an agency (PDF: 81KB), then you may have to put more money aside depending on the agency’s rates.

Example (if you are paying the replacement worker the same as your permanent employee):

If your personal assistant’s gross pay is £100 per week. Then you would need to save £400 (4 weeks x £100) to cover annual leave. You would save this by putting aside £33.33 per month (£400 total annual cost ÷ 12 months)

Statutory Sick Pay (SSP)

For the first three consecutive working days of sickness there is no legal requirement to pay sick leave. On the fourth and consecutive sick days, statutory sick pay comes into effect.

This is paid at a weekly rate of £68-20 (April 2007), or proportion of, depending upon the number of days worked in the week. This is the minimum paid and you can top it up to the full wage if you wish.

You may be able to claim back some of the SSP. If you employ a payroll company, inform them of employee sick days, as they will arrange matters.

If you employ your personal assistant on a daily basis for essential support, or as a live-in personal assistant, you may wish to pay the first three days of sick leave as a ‘good will gesture’ and you may wish to pay the full wage for reasonable sick leave.

This is your choice. If you do so, and you use a payroll company you will need to inform them that you wish to do this.

If you require alternative support whilst your personal assistant is sick, you will need to set aside funds to cover the additional wages as you did to cover holiday periods. We suggest you set aside two weeks annual sick leave.

Insurance cover (Personal Assistance Employment Protection Policy, or equivalent).

If you are employing your own worker you will be expected to purchase employer insurance e.g. Fish Insurance. This currently costs £84 per annum (April 2007) and you should put money aside to cover this cost e.g. £7 per month.

If you decide to employ directly at the beginning of your direct payments you will be provided with a start-up payment to assist you with your initial costs as an employer e.g. insurance, advertising costs.

Criminal Records Bureau checks

The Criminal Records Bureau (CRB) is an agency of the Home Office that provides access to criminal records and other information to organisations in England and Wales, through a service called Disclosure. Organisations in the public, private or voluntary sector can ask for a CRB check (PDF: 395KB).

A CRB check will identify people who may be unsuitable to undertake care work because they have a criminal record. This reduces the risk of abuse by ensuring that those who are unsuitable are not able to work within the caring professions.

A CRB check is not compulsory, but the council strongly recommends that you CRB check all people you intend to employ.

You are not able to apply for a CRB check yourself as only organisations can do this. The council therefore facilitates this process.

If you decide to employ someone from an agency it is equally important that you check that the agency CRB check their staff.

Payroll services

What will a payroll company do for you?

Calculate tax and National Insurance contributions
Calculate your employee’s gross and net pay
Have contact with the Inland Revenue on your behalf.

How does it work?

You advise the payroll company how much Direct Payments per hour you have to spend.
They will tell you how much you can afford to pay your worker.
They will tell you how much to pay the Inland Revenue, (This will include employers and employees contributions).
Your Direct Payment will cover the cost charged by the payroll company for their services.

Payroll Companies

We have provided a list of Payroll Companies (PDF: 68KB) for your convenience. Their inclusion on this list is not a recommendation of their quality or performance.

Paying your tax online

The Inland Revenue pays a tax-free incentive of £250 per year (up to £825), for filling in annual employer’s (tax) returns on line until 2008-2009. This means that everybody who uses this system to complete employer’s tax returns will save money £250 per annum in reduced tax payments. The saving equally applies if you complete tax returns yourself or you use a payroll service.

Disciplinary and grievance procedures

A disciplinary procedure (PDF: 64KB) allows you as the employer to formally address any problems you may have with your personal assistant’s work or behaviour e.g. lateness.

Most problems can usually be solved by having an informal discussion with your personal assistant, however, having a written disciplinary procedure is good practice, and it allows you to deal with any serious problems that you may have in relation to your employee’s work.

A grievance procedure allows your personal assistant to formally address any problems they may have with you.

What to do in emergencies

Even the best thought out care arrangements can sometimes breakdown. We would always advise that you have a back up arrangement (PDF: 73KB) in place ready for when the unexpected happens, so that an alternative personal assistant can provide you with the necessary support.

If your back arrangements fail then you could contact the Direct Payments Advisory Service for advice or contact telephone your respective social work team.

Employment related contacts

Employing Foreign Workers
www.homeoffice.gov.uk

Employers Helpline (for foreign workers)
Provides an online step-by-step guide to checking that the person you wish to employ is entitled to work in this country
Tel: 0845 010 6677
www.employingmigrantworkers.org.uk

The UK visas website
www.ukvisas.gov.uk

Inland Revenue
www.hmrc.gov.uk/individuals
Stationery orderline
Tel: 0845 7646 646

NCIL (National Centre for Independent Living)
250 Kennington Lane
London SE1 5RD
Tel: 020 7587 1663
Fax: 020 7582 2469
Textphone: 020 7587 1177
www.ncil.org.uk

New Employers Helpline
Tel: 0845 60 70 143
Textphone: 0845 602 1380

Self-Employment Helpline
Tel: 0845 915 4655
Registration line - 0845 15 45 15
www.inlandrevenue.gov.uk/employers

Tailored Interactive Guidance on Employment Rights (TIGER)
Provides information on the national minimum wage and employment rights etc.
www.tiger.gov.uk

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