Hiring your first employee: an HR checklist for startups

Taking on your first employee is a big milestone, and an exciting one. It also comes with legal responsibilities that are easy to miss when you're doing it for the first time. Use this checklist to make sure you've covered the essentials before, during and after your new starter's first day.

1. Before you recruit

• Check you need an employee. Employees, workers, freelancers and contractors have different rights. Make sure the arrangement you choose reflects how the person will really work.
• Work out the full cost. As well as salary, budget for employer's National Insurance, pension contributions, 5.6 weeks' paid holiday a year (including bank holidays, pro rata for part-time staff) and statutory sick and family-related pay.
• Pay at least the minimum wage. From April 2026, the National Living Wage for those aged 21 and over is £12.71 an hour (£10.85 for 18 to 20 year olds, and £8 for under 18s and apprentices).

2. Set up the legal essentials

• Register as an employer with HMRC and set up payroll (PAYE). You must register before your first payday, but no more than 2 months before you start paying people.
• Get Employers' Liability insurance as soon as you become an employer, with cover of at least £5 million. You can be fined £2,500 for every day you're not properly insured.
• Set up a workplace pension. Your duties start on your first employee's first day. Staff aged 22 to State Pension age who earn at least £10,000 a year must be automatically enrolled, with minimum contributions of 8% of qualifying earnings, of which at least 3% comes from you.
• Make your workplace safe. Carry out a health and safety risk assessment. Once you have five or more employees, you'll also need a written health and safety policy.

3. Recruit fairly

• Write a clear job description and person specification so you know exactly what you're looking for.
• Use inclusive wording in your advert, and avoid anything that could put off candidates with protected characteristics.
• Ask every candidate the same core questions, and score answers against the role's requirements.
• Never ask about age, health, pregnancy or family plans, which could lead to a discrimination claim.

4. Before day one

• Check their right to work in the UK before they start, using the Home Office online service or their original documents. Keep copies for the length of their employment plus two years. Getting this wrong can lead to a civil penalty of up to £60,000 per illegal worker.
• Prepare their written statement of employment particulars. This must be given on or before their first day, covering pay, hours, holiday, notice, probation and other key terms.
• Tell them how you'll use their personal data, and store employee records securely.

5. Day one and beyond

• Plan their onboarding: introductions, equipment, training and clear goals for their first weeks.
• Set up regular one-to-ones, for example weekly or fortnightly at first. They're a chance to check in on progress and wellbeing, give feedback both ways and resolve small issues early.
• Use your one-to-ones to review the probation period. Agree clear objectives at the start, track progress against them in each meeting, and keep brief notes. From January 2027, employees can claim unfair dismissal after six months' service, so honest, documented reviews early on are essential.
• Provide your disciplinary and grievance procedures within two months of their start date.
• Put key policies in place, including absence, holiday requests and preventing harassment.

Remember: day-one rights

Since April 2026, several rights apply from an employee's very first day. Statutory Sick Pay is now payable from the first day of sickness absence (with no waiting days), and paternity leave and unpaid parental leave are day-one rights. Make sure your contracts and processes reflect this from the start.

Get it right from the start

The way you set up your first hire becomes the foundation for every hire after it. I help startups and small businesses put the right HR basics in place, from contracts and offer letters to onboarding, policies and a first employee handbook. Get in touch for a free, confidential chat.

This article is general information, not legal advice. Figures apply to England, Scotland and Wales as of October 2026. Sources: gov.uk: employing staff for the first time, gov.uk: minimum wage rates, gov.uk: Employers' Liability insurance, gov.uk: workplace pensions, gov.uk: right to work checks.