Hiring temporary staff is a great short-term way to meet demands at busy times and is more cost effective than hiring permanent staff. Read our guides on how to hire temporary staff.
Hiring temporary staff offers lots of advantages for small businesses. Perfect to cover permanent staff absence, maternity leave or to meet seasonal demands, a temp can be hired quickly and easily. Many are skilled, experiences workers who prefer the flexibility of temporary work and can bring immediate value to your company.
It’s important for small business owners to understand UK legislation government when hiring temporary and agency workers. You can employ temporary staff with different contracts depending on what you want them to do and how long for. You’re legally obliged to issue temporary employees with a contract within 60 days of employing them.
Fixed term contracts
A fixed term contract means workers work until a specified end date when the contract is termination. Both the employer and employee must comply with this – the contract cannot be terminated ahead of this time unless there’s a valid reason and notice given.
Workers on fixed term contracts must not be treated less favorably than permanent workers, unless there’s a good reason to do so. Employers must ensure fixed-term workers are paid the same and have the same benefits as permanent staff and have protection from redundancy.
Regulations apply to the dismissal of fixed-term workers. If you decide not to renew a contract after a worker has completed a year of employment, you’ll need to provide in writing a list of reasons for your decision. If a worker has completed two years of work, you must demonstrate a just reason for not renewing the contract. Any employee on fixed-term contracts for four or more years automatically becomes a permanent employee, unless the employer can show there’s a good business reason as to why not.
A zero-hours contract describes a casual agreement between the employer and an individual. It generally refers to a situation where an employer doesn’t guarantee any hours of work. Instead, work is offered when it arises, often at short notice. However, the individual has the right to accept the work offered or decline on that occasion. Zero-hours contract workers must be paid at least National Minimum Wage and are entitled to holiday leave, rest breaks and other statutory employment rights.
Using an agency
You may choose to hire temporary workers through an agency that’s classed as an ‘employment businesses’. In this case, the agency is responsible for paying workers and ensuring their rights are maintained. You pay the agency the employee’s salary, National Insurance contributions (NICs) and Statutory Sick Pay (SSP) along with the relevant terms and conditions so they can ensure workers get the same treatment as permanent employees after 12 weeks in the job. This includes pay, working time, rest periods, breaks and annual leave. Hiring workers through an agency can be more expensive as you pay a commission on top but you avoid having to directly find, hire and then pay the worker yourself.
Freelancers, consultants and contractors
These temporary staff are usually self-employed or part of other companies. As such, they usually are responsible for their own tax and National Insurance contributions (NICs). Typically contracted to provide a service, freelancers, consultants and contractors may not have the same rights as workers hired under an employment contract.
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Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.