Hire in The United Kingdom
Here’s where you begin with human resources best practices and recruitment in the United Kingdom.
Currency of United Kingdom
British Pound (GBP)
The Capital of United Kingdom
London
Time Zone in United Kingdom
GMT
Important Facts About the United Kingdom
Introduction to United Kingdom
The United Kingdom of Great Britain and Northern Ireland (commonly referred to as the UK) comprises four constituent countries: England, Scotland, Wales, and Northern Ireland. The total population is approximately 64 million, with England alone accounting for around 53 million inhabitants, positioning it as one of the most densely populated countries globally.
What to Know about United Kingdom’s Geography
The island of Great Britain is situated off the northwest coast of the European mainland. Northern Ireland is located in the northeastern corner of the island of Ireland, sharing a border with the Republic of Ireland.
Climate in United Kingdom
The UK has a temperate climate, with generally cool temperatures. The prevailing wind is from the southwest and bears frequent spells of mild and wet weather from the Atlantic Ocean mostly affecting the western regions. Similarly, Atlantic currents, warmed by the Gulf Stream, bring mild winters.
United Kingdom Human Resources at a Glance
Employment Law Protections in United Kingdom
UK employment law is derived from three main sources:
- Common law (custom and practice and court decisions)
- UK labor law legislation (which has supplemented the common law rules)
- European law
Employment Contracts in United Kingdom
When an employee agrees to work for an employer and the employer agrees to compensate the employee for their work, a contract is established. Nonetheless, it’s advisable to have a compliant written contract in place. Thus, there’s always a contract between an employee and employer, even if nothing is documented in writing.
The contract or an accompanying principal statement of written terms must contain all of the following details:
The contract or accompanying principal statement of written terms should include:
- – Employer’s name and the employee’s name
- – Start date (commencement of employment)
- – Date of ‘continuous employment’ initiation for an employee
- – Job title or a brief job description
- – Employer’s address and the designated work locations for the employee
- – Pay details, including frequency and payment schedule (e.g., £1,000 per month, paid on the last Friday of each month)
- – Working hours, specifying the required workdays and any potential changes to hours or days
- – Holiday entitlement and the calculation method for holiday pay in case of employment termination
- – Sick leave entitlement and pay (if not included, the employer must indicate where this information can be found)
- – Any additional paid leave (if not included, the employer must specify where to find this information)
- – Other benefits, including non-contractual benefits like childcare vouchers or company car schemes
- – Notice period required by either party before ending employment
- – Expected duration of the job if temporary or fixed-term
- – Probationary period details, including conditions and duration
- – Terms regarding international work (if applicable)
- – Required employee training, including any training not funded by the employer.
United Kingdom's Contract Terms
The terms of the employment contract cannot offer conditions that are less favorable than the minimum legal entitlements set forth in employment legislation.
United Kingdom's Guidelines Regarding Probation Period/Trial Period
Employment contracts frequently include a trial or probationary period at the beginning of employment, allowing the employer to evaluate the employee’s suitability for the role. The specifics of the trial period are outlined in the employment contract, with a typical duration of three months. The maximum period, including any extensions, is six months. Certain benefits may not be available to the employee during the probationary period.
Regulations and Rules Regarding Working Hours in United Kingdom
The Working Time Regulations 1998 (“WTR”) regulate workers’ hours of work. According to these regulations, workers are generally prohibited from working more than 48 hours per week, typically calculated over a 17-week reference period. In the UK, employers can request workers to provide written consent to opt out of the 48-hour weekly working limit. However, workers retain the right to revoke their opt-out with up to three months’ notice at any time. The WTR also stipulates the entitlement to daily, weekly, and in-work rest periods. A standard white-collar working week typically consists of 37.5 hours.
United Kingdom Laws Regarding Overtime
If employers wish to request their employees to work beyond their regular working hours, they should ensure that the employment contract includes an overtime clause. This clause should specify whether overtime will be compensated. Generally, overtime rates are set at 1.5 times the basic rate for weekdays and double the basic rate for weekends and public holidays.
United Kingdom Timesheets
In 2019, the European Court of Justice emphasized that companies are required to establish an objective, dependable, and easily accessible system for recording the daily working hours of each employee.
Rules Regarding Bonus and 13th Month Pay in United Kingdom
Bonus schemes are prevalent and may be either contractually guaranteed or discretionary. Often, these schemes combine both elements, granting employees the right to be considered for a bonus while allowing the employer the final decision on whether to distribute it. However, employers should exercise caution when exercising the discretionary aspect of any bonus scheme.
Termination
Employees in the UK have the right to a notice period for terminating their contract unless they have engaged in gross misconduct. If there is no gross misconduct, the contract will persist until it’s terminated in accordance with its terms, typically either by providing the required notice or making a payment in lieu of notice if allowed by the contract.
For employees lacking unfair dismissal rights (those with less than two years of service), employers can dismiss without a fair reason as long as the dismissal isn’t based on discriminatory or automatically unfair grounds and complies with the employment contract terms. Dismissing an employee for various reasons, such as whistleblowing, utilizing statutory rights to parental leave, or engaging in trade union activities, among others, is automatically unfair.
After completing two years of service, employees gain protection against unfair dismissal, and employers can only dismiss for one of five prescribed legitimate and fair reasons. Additionally, a fair procedure must be followed; otherwise, the dismissal will be deemed unfair.
United Kingdom's Requirements Regarding Notice Periods
Once an employee has completed one month of employment, they are entitled to a statutory minimum notice period from the employer, outlined as follows:
– At least one week’s notice if employed from one month up to two years.
– One week’s notice for each year of employment between two years and up to a maximum of 12 years.
Redundancy/Severance Pay in United Kingdom
With the exception of redundancy dismissals, which entitle eligible employees to a statutory redundancy payment, there is no statutory entitlement to severance pay. Instead, employees are entitled to a notice period. It is customary for employees to receive a sum in lieu of notice, typically equivalent to their pay for the notice period.
Post-Termination Restraints / Restrictive Covenants
A restrictive covenant is a contractual clause designed to safeguard an employer’s business interests by limiting the actions of its employees. Typically, these provisions are enforced after the termination of the employment relationship.
Varieties of Restrictive Covenants:
- 1. Non-compete: This clause limits an employee’s ability to work for specific competitors or engage in a competing business for a designated period following termination.
- 2. Non-solicitation of customers: This prohibits an employee from actively seeking certain clients or customers of their former employer for a specified duration after termination.
- 3. Non-solicitation of employees: This prevents an employee from enticing certain staff members of their former employer for a defined period after termination.
- 4. Non-dealing: This restricts an employee from engaging in business transactions with particular clients or customers of their former employer for a set period post-termination.
Restrictive covenants are not inherently valid and enforceable solely by being included in an employment contract. Instead, there’s a presumption that such covenants are automatically void as they may be deemed to restrain trade and contravene public policy, unless the employer can demonstrate both of the following:
- The employer possesses a valid proprietary interest that warrants protection through the restrictive covenant.
- The safeguarding pursued is proportionate and fair considering the concerns of both parties and the public interest.
Fixed Term Contacts for United Kingdom Employees
Fixed-term workers may be engaged for a predetermined duration or for a specific task, with the contract concluding either upon the expiry of this duration or the completion of the task. Examples include those recruited to fill in during maternity, parental, or paternity leaves; individuals employed for seasonal or intermittent work (such as agricultural workers and retail assistants during peak periods); personnel hired to address exceptional spikes in demand, as seen in the tourism sector; and workers whose contracts conclude upon the fulfillment of a designated task, such as implementing a computer system. While fixed-term contracts are not mandated to state the reason for their duration, it is necessary to include a job title in the contract to meet the employer’s legal obligations regarding the written statement of specific employment conditions.
As per the regulations, if an employee has held successive fixed-term contracts for a period exceeding four years (since July 10, 2002), they will be granted permanent status automatically.
Tax and Social Security Information for Employers in United Kingdom
Personal Income Tax in United Kingdom
The standard personal allowance for employees for the tax year 2023 to 2024 is:
£242 weekly
£1,048 monthly
£12,570 annually
| PAYE Tax Rate | Rate of Tax | Annual Earnings the Rate Applies To (above the PAYE threshold) |
|---|---|---|
| Basic Tax Rate | 20% | Up to £37,700 |
| Higher Tax Rate | 40% | From £37,701 to £125,140 |
| Additional Tax Rate | 45% | Above £125,140 |
(Note: Rates applicable to England and Wales. The Scottish government establishes its own rates, which are generally comparable.)
Employers are required to withhold and remit tax payments owed from salary income to the tax authorities on behalf of employees.
Certain types of non-salary income are exempt from income tax, including:
- Interest and earnings from various savings and investments, the initial £1,000 obtained from property rental, the first £30,000 in payments designated as compensation for job loss, and the majority of welfare benefits.
Social Security in United Kingdom
Both employees and employers are mandated to make contributions to National Insurance (NI). Here are the rates and salary bands applicable from 6 April 2023 to 5 April 2024:
| Salary Band (£) / Month | Employee NI Contributions (Class 1) |
|---|---|
| 533 – 1,048 | 0% |
| 1,048.01 – 4,189 | 10% (Effective from January 2024) |
| over 4,189 | 2% |
| Salary Band (£)/ Month | Employer NI Contributions |
|---|---|
| 533 – 758 | 0% |
| 758.01 – 2,083 | 13.8% |
| 2,083.01 – 4,189 | 13.8% |
| over 4,189 | 13.8% |
The employer is required to handle National Insurance contributions and income tax payments using the PAYE (Pay As You Earn) system.
*The above rates serve as a broad guideline. Actual rates charged by GoGlobal will differ.
Apprenticeship Levy
The apprenticeship levy serves as a tax aimed at assisting companies in establishing apprenticeship programs and facilitating training for apprentices. Employers contribute to this levy, which is collected and stored in a fund to cover apprenticeship training expenses.
Employers with an annual payroll exceeding £3 million are required to contribute to the levy, equivalent to 0.5% of their total payroll, which is deducted monthly via PAYE.
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Important Information for Employees in The UK
Important Information for Indian EmployeesImportant Information for Indian Employees
Salary Payment
Typically, salaries are disbursed on a monthly basis, either on the final day of the month or a few days preceding it.
Payslip
As per legal requirements, employers are obligated to furnish employees with payslips containing essential details, including:
1. Gross earnings prior to deductions and net earnings after deductions.
2. Breakdown of variable deductions like taxes and national insurance.
3. If pay fluctuates based on hours worked, inclusion of the number of hours worked for that period.
Employers are also required to clarify any fixed deductions, such as repayment of a season ticket loan. This explanation can be provided either on the payslip itself or in a separate written statement.
Annual Leave
Employees are entitled to a statutory minimum of 5.6 weeks of paid annual leave per year. This includes public holidays, which currently amount to eight days in England and Wales (equivalent to 20 working days + 8 public holidays). Many employers offer more than the statutory minimum, with 25 or 30 days being common.
The statutory minimum of 20 days must be used within the holiday year, or they will be forfeited, except in exceptional circumstances such as long-term sickness, pregnancy, or maternity leave. Other unused contractual paid leave may be carried over, but only with the employer’s agreement and approval.
Sick Leave
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Employees are entitled to a statutory minimum of 5.6 weeks of paid annual leave per year. This includes public holidays, which currently amount to eight days in England and Wales (equivalent to 20 working days + 8 public holidays). Many employers offer more than the statutory minimum, with 25 or 30 days being common.
The statutory minimum of 20 days must be used within the holiday year, or they will be forfeited, except in exceptional circumstances such as long-term sickness, pregnancy, or maternity leave. Other unused contractual paid leave may be carried over, but only with the employer’s agreement and approval.
Nursing Care Leave
Employees are entitled to a statutory minimum of 5.6 weeks of paid annual leave per year. This includes public holidays, which currently amount to eight days in England and Wales (equivalent to 20 working days + 8 public holidays). Many employers offer more than the statutory minimum, with 25 or 30 days being common.
The statutory minimum of 20 days must be used within the holiday year, or they will be forfeited, except in exceptional circumstances such as long-term sickness, pregnancy, or maternity leave. Other unused contractual paid leave may be carried over, but only with the employer’s agreement and approval.
Compassionate & Bereavement Leave
Employees have the right to take time off for a funeral if the deceased was a dependent, such as a partner or parent. While there’s no legal requirement for this time off to be paid, most employers offer some unpaid leave in such situations.
There’s no legal entitlement to time off for the bereavement of non-dependent family members. However, employers are encouraged to show compassion and understanding towards their employees’ individual circumstances, regardless of legal obligations.
Maternity & Parental Leave
Maternity leave is a period granted to expectant mothers, typically before and after childbirth, to recover and care for their newborns.
- Pregnant employees and new mothers have the right to take up to 52 weeks of maternity leave. Throughout this period, their usual terms and conditions of employment remain intact, although their salary is typically replaced by statutory maternity pay. This pay comprises 90% of their basic salary for the initial six weeks and £172.48 per week (or 90% of average weekly earnings, if lower) for the subsequent 33 weeks. Many employers opt to provide enhanced rates of pay during some or all of the maternity leave period, known as company maternity pay.
- Upon returning to work from maternity leave, a woman generally has the entitlement to resume her previous job, subject to the duration of her maternity leave.
Public Holidays
England and Wales observe eight annual public holidays, while Scotland and Northern Ireland may have additional local public holidays. These holidays are observed on the calendar day they fall on, even if they occur on a weekend.
Benefits to the Employee in The United Kingdom
United Kingdom Statutory Benefits
The UK operates a comprehensive social security system, financed through general taxation and National Insurance Contributions. This system offers state benefits covering various situations such as maternity, paternity, adoption, childcare, disability, and caregiving. Additionally, it manages retirement pensions. Employers have the option to enhance these state benefits through contractual agreements. The National Insurance Fund aims to provide basic benefits to those in need.
Employers conducting business in the UK must hold employer’s liability insurance to cover liability for employee injuries or illnesses occurring during their employment. Some employers also provide additional benefits such as life insurance, permanent health insurance, private medical insurance, and company cars to their employees.
Auto-Enrolment Pension
Employers in the UK are required to automatically enroll eligible workers, aged 22 to state pension age, and earning at least GBP 10,000 per annum, into a qualifying pension scheme, with mandatory contributions. The current minimum total contribution rate is 8%, of which the employer’s share is at least 3% of each employee’s qualifying earnings.
As of 2023, qualified earnings, as defined by HMRC, range between £6,240 and £50,270. This means that contributions from both employers and employees are calculated based on earnings within this bracket, totaling £44,030 annually. However, it’s possible for both employers and employees to contribute based on total earnings, subject to mutual agreement stated in the employment contract. Employees retain the right to opt out of the scheme, but doing so renders them ineligible for the employer’s contribution.
Other Benefits
Certain employers may provide employees with additional benefits, including but not limited to life insurance, permanent health insurance, private medical insurance, company cars, season ticket loans for annual public transport tickets, and subsidized gym memberships.
Flexible Working Requests
Employees who have completed at least 26 weeks of continuous service have the right to submit a request for flexible working arrangements, such as part-time work. Employers are required to consider the request in a reasonable manner and respond within three months. However, they are not obligated to grant the request. Initially, this right was granted to employees with caring responsibilities, but it has now been extended to all qualifying employees, irrespective of the reason for seeking flexible working.
Rules Regarding Visas and Foreign Workers in United Kingdom
General Information
An individual is eligible to work in the UK and therefore will not need to obtain a work permit if any of the following apply:
- Citizen of the United Kingdom
- Citizen of the European Economic Area (EEA)
- National of Switzerland
Following the UK’s departure from the EU on January 31, 2020, any EU/EEA/Swiss national (as well as their family members) typically needs to apply to the EU Settlement Scheme if they intend to continue residing and working in the UK beyond June 30, 2021. Upon successful application, they will receive either settled or pre-settled status. Irish nationals retain their existing rights to live and work in the UK without additional documentation.
For individuals from outside the European Economic Area (EEA) and Switzerland, the ability to work in the UK on a short or long-term basis requires a work visa. Those holding a visitor visa are not permitted to undertake employment in the UK. Various types of work visas are available, depending on factors such as:
- – Expertise and credentials
- – Availability of a job offer and sponsorship
- – Intention to relocate with family members
- – Nature of the intended work (e.g., specialized visas for sports, charitable, or religious activities)
- – Commonwealth citizenship (eligibility for an Ancestry Visa, permitting work in the UK for individuals with a British grandparent and meeting additional criteria)
The individual can initiate the visa application process through a British Overseas Mission in their own country or at the British Embassy. Typically, to apply for most work visas, securing a job offer with sponsorship from a UK-based employer is a prerequisite. However, not all employers possess the authorization to sponsor temporary or permanent employees.
It’s important to note that holding a visa does not automatically grant the right to work in the UK. In many cases, individuals may also need to obtain a work permit to commence employment. If an individual has secured a job in the UK and received acceptance to work (or holds a visa that prohibits work), they may still require a work permit. Importantly, individuals cannot directly apply for a work permit; their UK-based employer must apply on their behalf. The duration of the permit is contingent upon the nature of the work and the type of permit issued.
Getting a Tax Number
All individuals residing in the UK are obligated to pay taxes on their income. Employers are responsible for deducting income tax directly from their employees’ salaries.
Every individual working in the UK must possess a National Insurance (NI) Number, also known as NINO. This unique identifier is crucial for employers to report contributions to the British Tax Department (HM Revenue and Customs) for state pension and the social security system. Without an NI Number, individuals may face significant emergency tax deductions on their income until they obtain one. Although it’s possible to start working without an NI Number, it’s essential to apply for one promptly.
The NI Number serves as a personal account identifier, unique to each individual and retained throughout their lifetime. It ensures that National Insurance contributions and taxes are accurately recorded under the individual’s name and acts as a reference number when communicating with the Department for Communities and HM Revenue & Customs (HMRC).
Individuals with the right to work in the UK can reach out to the nearest processing center to schedule an appointment for obtaining a National Insurance number. Upon contacting, they will receive a letter from the Department for Work and Pensions (DWP), inviting them to attend a National Insurance number interview. During this interview, which typically involves a one-to-one session, individuals may be queried about their reasons for needing a National Insurance number, as well as their personal background and circumstances. In the letter, applicants will also find a list of documents to bring along as proof of identity (originals, not photocopies), including:
- Passport or national identity card
- Residence permit documentation
- Official birth certificate
- Marriage certificate (if applicable)
- Valid driver’s license
After the interview, the processing center will communicate the outcome to the individual, informing them whether their application was successful. If approved, the National Insurance number will be issued. The individual should promptly inform their employer of their National Insurance number once it has been received.
Public Holidays Recognized by United Kingdom in 2024
| Occasion | Date | |
|---|---|---|
| 1 | New Year’s Day | January 1 |
| 2 | Good Friday | March 29 |
| 3 | Easter Monday | April 1 |
| 4 | Early May Bank Holiday | May 6 |
| 5 | Spring Bank Holiday | May 27 |
| 6 | Summer Bank Holiday | August 26 |
| 7 | Christmas Day | December 25 |
| 8 | Boxing Day | December 26 |
Please be aware that if a bank holiday falls on a weekend, a substitute weekday is designated as the bank holiday, typically the following Monday.
Hire New Talent in The United Kingdom
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