Taking on employees - What's involved?

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ButtermilkJa

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I'm in the process of turning my sole trader business into a Ltd. Co. I'm getting quite busy at the moment, so much so that's it's taking over my life too much. I'm thinking about taking on someone.

The only problem is, I'm not sure how long this extra build up of work will last. So the employment would need to be short term. What's the best approach to something like this? Is it best just to pay the person as a contractor, or put them on the books as an employee and see how it goes? I know with the 'employee' option, I would need to pay PRSI etc. Basically, is it more hassle than it's worth to put someone on the books for a only a short term, i.e. paperwork etc.?

Just looking for general advice/tips at this stage. Thanks!
 
If they are working for you for less than a year it's easy enough to get rid of them. You can always get rid of people if you have no work for them to do. It is a lot of paperwork etc but it is best to do it properly, for your sake as well as theirs.
If they are just working for you then revenue will treat them as an employee no matter what you say they are.
 
To be honest, I would always let them know in advance how much work is available and would draw up a contract to give them some kind of idea of how long they'll be required. I'm not worried about 'getting rid of them' when work dries up. I'm more interested in what's involved in terms of paperwork, timeframes, my responsibilities etc.

I think you're right though, even if the paperwork is daunting, it's better to do it all right from the start!
 
I believe once you employ people you have moved into a totally new area which requires its own set of training and skills. Employment law is completely skewed against the employer, so its totally different to anything else a business person would encounter. You would need to get plenty of training on every aspect of employment law, your paperwork must be ************************* and verified, your procedures and behaviour towards the employee must be spot-on everytime.
It sounds over-loading and at times it is but there is no casual way to employ people nowadays.
 
if you need temporary staff or you need staff short term you should consider agency staff. As well as the administation and compliance issues you will also need employers liability insurance, the cost of providing payslips and the hastle of appointing PRSA advisors etc.

By considering an agency person the agency would invoice you for the services of the employee but the would remain the employer. That means that they must provide the insurance, issue payslips, file the returns with the Revenue etc.

The downside is that it will cost you a little more. Given that you are so busy that you are considering employing someone then you will need to weigh up the cost of the the agency fee against the lost income for you form having to spend time dealing with payroll and HR issues.
 
Hi Command

You should treat an agency employee as a normal employee. You should insure them and they have virtually all the rights of direct employees including protection against unfair dismissals.

You will save some paperwork, but that is all.

Buttermilk

The key thing is to give the new employee a letter of offer/contract which sets out the details of the employment. In particular, mention that work might not continue if the business goes quiet.

After a year, the employee gets protection of the Unfair Dismissals Act. This means that you must show that the dismissal is fair. If your business is quiet and you no longer need them, then dismissal would be regarded as fair. If, however, you took on someone else immediately, it would probably be regarded as unfair.

brendan
 


You could think about going to an employment agent, they would do all the paye and prsi issues, and if you just need a worker for say 6 months then the agency will give the worker a new job with another company when he/she is finished with your company.

But then again, if you are lucky, your business might be busy for longer that you think.
 
Brendan,

From practice, the rights and responsibilities for agency staff remains with the agent. The agent is responsible for the taxes and in particular the agent is liable for the holiday and other statutory entitlements of the employee including public liability insurance.

If a contractor or agency staff member leaves a tool on the ground and somone falls over it the obligations are with the contractor.

Also in the case where a contractor is signing off on work, say in an architects office or a construction company then if they sign off on a project or a piece of work and the firm ends up being sued over it the contractor will bear the ultimate responsibility and should have adaquate insurance to cover such circumstances.
 
You should only hire someone as a last resort, after all other avenues have been exhasted. Compliance will be costly (as mentioned above) and there are other pitfalls to be cautious of.

Even interviewing can be perilous. Ask the wrong question and you could end up paying €€€s in fines.

Certainly not for the faint of heart, the odds are stacked against you.
 

I would disagree to an extent with this advice. You and your business will suffer in the long run if you fail to recruit in order to meet market demand. The only way in the long-run to build a long-term sustainable business is by hiring staff. Yes there are perils involved in recruiting and employing staff but there are also perils involved in doing nothing. If you treat staff fairly, and try to ensure to the best of your ability that you observe the relevant laws, you shouldn't go too far wrong.
 
Command said:


This is irrelevant. The agency pays all those taxes and holiday pay but builds it into the charge to the client. It is cheaper to take on an employee directly.

But the biggest issue is Unfair Dismissals which is the responsibility of the employer and not the agency.


If a contractor or agency staff member leaves a tool on the ground and somone falls over it the obligations are with the contractor.
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If I fall over a hammer when visiting a premises, I will sue the occupier of that premises who is presumably the employer. In the case outlined by the OP, the contractor or employee will be under the guidance of the OP and so the OP would be sued. Claiming that you pay him in some way other than PAYE would be unlikely to succeed in court.


I very much doubt it. If I hire an architect to do a job and he is negligent, I would sue him. If he wants to sue his employee or contractor or the agency through which he took on that employee, that's up to him.

Brendan
 
I would disagree to an extent with this advice. You and your business will suffer in the long run if you fail to recruit in order to meet market demand
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My advice was to only hire someone as a last resort, because of the reasons given. Not to completely rule out hiring anyone at all.
 
Brendan,

The primary advantge to agency staff and contractors is the avoidance of unfair dismissal claims. The member of staff remains the employee of the agency.

An agency will inovice a rate for the employee which includes taxes and holdiay pay etc. The agency is your service provider and you have a contract with them not with the employee.

The employee will receive his or her payslip from the agency. Providing the agency don't hoodwink you into signing a service agreement which transfers their responsibilities to the employee if you are dissatisfied with the service you are getting i.e unhappy witht he employee they have sent, you are free to change service provider and get someone else.

The is the only valid reason to use agency staff. The costs are high but for someone who doesn't know anything about employment law or doesn't want to know they are a viable option.

Agency staff are ideal for seasonal businesses and also for unskilled jobs.

Having said that I have seen several large companies and companies in the public eye a lot using agency staff long term. It allows them to circumvent head count quotas and also it allows them to make cut backs in staff without having to announce lay offs.
 
Thanks to all for the very good replies. I'll just to try and answer a few...

I don't think that going through an agency is the way to go for my line of business (Graphic Design). Then again, I could be wrong? But I think that the field is small enough and it would be better for me to put the word around for anyone interested and then interview from there. I'm really only looking for someone to help out for 3 months or so, maybe a college student on summer break would be ideal.

In terms of unfair dismissal and employees rights etc, I would have no problem here. I am a very honest and fair person by nature so I'm not going to screw someone I take on, especially at the detriment of my business. As Brendan pointed out, I would draw up a contract/agreement at the very beginning outlining that the employment is temporary (say 3 months, or 6 months) and it's continuation is subject to the business meeting targets.

I'm just more interested in the paperwork end of things. Like is it something I can do myself or can I hand it all to my accountant to sort out. Is this something accountants deal with, processing these sort of forms?

At the end of the day my aim is to have a business premises (rented office) and 2/3 employess down the line so I suppose this is something that will come eventually for me! Who knows, maybe I'm at that stage already?

Anyway, thanks for the replies, certainly food for thought!
 
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