United Kingdom Employer of Record
If a lack of speed or local expertise are among your top concerns when expanding to or employing workers in the United Kingdom (U.K.), an employer of record may be the best option for achieving your global growth objectives.
An employer of record, sometimes known as an international PEO, enables you to quickly hire and onboard workers in the U.K.―often in as little as two weeks―without having to take on the cost and risk of establishing a local entity.
Learn about the hiring, employment, payroll and benefits requirements for workers in the U.K. and how our employer of record service, Global Employment Outsourcing (GEO), and local HR experts can help you manage your international employment needs.
Hiring in the U.K.
U.K. labor law is made up of various charters, acts and regulations, including the Employment Rights Act 1996 and the Equality Act 2010. This wide collection of legislation provides the legal framework for employees, employers and trade unions, including the Equal Pay Act of 1970, the Employment Rights Act of 1996 and the Equality Act of 2010.
Because of the complexity of employment laws in the U.K., compliant employment contracts are an essential business need. As your employer of record and PEO in the U.K., we can ensure that every contract, for every worker, meets all requirements. We can also provide you with guidance about cultural norms and hiring best practices and keep you up-to-date with employment regulations as they change.
Employment contracts in the U.K.
As you look to hire new employees, it’s important to remember that employment contracts are required in the U.K., and terms must include employment conditions, rights, responsibilities and duties. Here are some common regulations you’ll need to know to create a compliant contract, as well as how an employer of record and PEO can provide support for your unique HR needs.
The maximum workweek for employees in the U.K. is 48 hours a week averaged over 17 weeks. In general, employees over 18 years old can choose to work more than 48 hours a week if they have written, voluntary opt-out agreement—although workers in certain sectors are not eligible for opting out. Under the Working Time Regulations employees are entitled to 20 minutes of rest every six hours of work, 11 hours of rest every 24 hours of work, and 24 hours of continuous rest per week (or 48 hours of continuous rest every two weeks).
As you consider the appropriate salary to offer your U.K. employees, keep in mind:
- Hourly minimum wage as of April 2022 ranges from £4.81 to £9.50, depending on the age of the employee. In addition to the minimum wage, the Living Wage Foundation in the U.K. has calculated a higher living wage, which although not mandatory, has been adopted by thousands of U.K. businesses.
- Employment contracts for payments below the minimum wage are not legally binding.
- Employees must be issued a written payslip that shows gross pay, net pay, deductions for taxes, NICs and any fixed deductions such as union dues.
- There is no requirement for premium pay for overtime work; however, an employee’s average pay for total hours worked should not be lower than minimum wage.
As your employer of record in the U.K., we can provide you with resources and insights about employee compensation, so you are better equipped to make a competitive employment offer.
There is no requirement for bonuses to be paid—they are discretionary in the U.K., and they are usually agreed upon in the contract between the employee and employer. Certain roles and sectors are more likely to see bonus payments—including corporate managers and directors; business, media and public service professionals; and science, research, engineering and technology professionals—and the average bonus payment in the U.K. is over £2,000.
The probationary period in the U.K. is generally one to six months, and employers are required to notify employees when they have successfully completed the probationary period.
Termination and severance
Although the U.K. Employment Rights Act 1996 defines how much notice of termination must be given to employees, employers often agree to more generous provisions—sometimes up to six months’ notice.
Employers who are terminating a worker’s employment are encouraged to follow the ACAS (Advisory, Conciliation and Arbitration Service) Code of Practice to help ensure fair dismissal.
As your employer of record in the U.K., we can work with you to quickly handle the unforeseen event of an employee termination, providing legal guidance and a personalized process that ensures you stay out of labor court.
Employee benefits and paid leave in the U.K.
When negotiating terms of an employment contract with a candidate in the U.K., here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.
Pregnant employees are entitled to 52 weeks of maternity leave, which includes 26 weeks of “Ordinary Maternity Leave” and 26 weeks as “Additional Maternity Leave.” Employees aren’t required to take all 52 weeks of their maternity entitlement, but they must take two weeks off when the baby is born—and an employer can face criminal charges if they allow an employee to return to work within two weeks of giving birth.
Additionally, pregnant employees are entitled to receive up to 39 weeks of statutory maternity pay if they have worked for the employer for at least 26 weeks and meet minimum earnings requirements.
Full-time employees in the U.K. are entitled to a minimum of 28 days of paid annual leave each year with up to 8 days eligible to roll over into the next year. These generally include bank holidays unless the employment contract states otherwise. Vacation pay is usually based on the average pay over the 52 weeks prior to the vacation, or the number of weeks of employment if the worker has been with the employer for less than 52 weeks.
Eight holidays are observed nationwide, but employers are not legally bound to give these days off:
- New Year’s Day
- Good Friday
- Easter Monday
- Early May bank holiday
- Spring bank holiday
- Summer bank holiday
- Christmas Day
- Boxing Day
Bank holidays do not have to be given as paid leave, but employers can choose to include them as part of a worker’s statutory annual leave. When employees work on a national holiday, they have no statutory right to extra pay.
Employees who earn at least £118 per week and are incapable of working for more than four consecutive days are entitled to £96.35 per week of Statutory Sick Pay (SSP), for up to 28 weeks.
Employers can offer more sick pay, called “contractual” or “occupational” pay, as part of the employment contract, but they cannot offer less than the statutory minimum. Employers cannot require employees to contribute towards sick leave payments.
Health benefits in the U.K. are funded through the National Insurance Contributions (NICs), which include both employee salary deductions and employer contributions. In addition to the federal health benefit, some employers opt to provide separate private health insurance, but that is generally considered a perk.
As your employer of record in the U.K., we may be able to provide optional supplementary health coverage for professionals and their dependents at a more cost-effective rate.
In addition to healthcare benefits, the NICs fund benefits such as state-provided pensions, statutory leave benefits and workers’ compensation.
Employer social costs will cover a large portion of employee benefits in the U.K., but we can consult with you about supplemental coverage options, such as additional pension contributions or life insurance, if needed.8
Employee onboarding with an employer of record in the U.K.
We write and validate all local employment contracts, streamlining the onboarding process for you and your U.K. employees—all you have to do is provide relevant information and review and approve the employment agreement.
As your employer of record in the U.K., we will:
- Schedule a welcome call to discuss HR and employment information for the U.K., as well as answer any questions
- Prepare a customized employment contract
- Share the employment contract and benefits information with the new employee for signature and review
- Gather tax and banking information from the employee to set up payroll
- Provide a local point of contact to the employee to answer any questions regarding their employment, local HR or payroll
The entire onboarding process for the employee can often be completed in as little as two weeks.
Partner with Safeguard Global as your U.K. employer of record and PEO
With over a decade of service, we are the longest-serving employer of record and PEO provider in the international market. Organizations around the world rely on Global Employment Outsourcing (GEO) to expand and hire in over 179 countries around the world, quickly and compliantly.
We’ve seen just about every global employment circumstance imaginable—and with our extensive knowledge of local law and culture, we know what it takes to get employment right in the U.K. We provide written contracts in the local language, salaries in the local currency and HR support in your employees’ time zone.
Additionally, as a global payroll provider we support payroll administration—including payments, filings and other calculations—in more than 150 countries and can accommodate the payroll outsourcing needs of any size organization.
Whether you’re looking to hire as part of a strategic expansion or to meet specific talent needs, our global solutions advisors can walk you through your international hiring options so you can make the right choice for your organization. Contact us today.
The information provided on or through this website is for informational purposes only and does not constitute legal advice. Safeguard Global expressly disclaims any liability with respect to warranty or representation concerning the information contained herein, including the lost essence, interpretation, accuracy and/or completeness of the information in transit and language translation.
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