Can/should you hire an employee from a home-business?

[JDX_John]

My business runs from my home because it's pretty much all online - I work 100% remotely for my clients and I also currently hire subcontractors/freelancers who work 100% remotely.

I was wondering in this scenario if it makes sense to actually hire an employee rather than exclusively using subcontractors and freelancers. They would be 100% working from their own home but still I believe some H&S malarkey applies.

What are your thoughts on this - is there any point to it? I think that even after NI it would work out more cost-effective, especially if I want to train someone up at all, but is the hassle worth it?

 

[neoseal]

Weight the benefits for freelancers against employee. As an employer you will need to full fill PAYE and other employee benefits like pension, pay the employee even if there may not be any work, you will need to invest in training employee and what happens if he leaves after training, if something goes wrong there may be employment tribunal case, you may need some employment related insurances.

For freelance you are not liable for anything. You cannot train a freelancer, however you can always demand the work in a specific way you want. Less PAYE and tax hassle.

Lots of other thing you may want to think over before taking on an employee. Easy to hire, difficult to fire.

 

[JDX_John]

Good points but they are all general "employee VS contractor" issues, what about specifics in my case?

 

[Lilliput]

not sure but maybe you could employ a self-employed, responsibility would be on them for tax etc,

 

[JDX_John]

You can't employ a self-employed person because if you employ them they are not self-employed any more Hiring a self-employed person is just like hiring a freelancer/contractor, in fact many such people are self-employed (sole trader).

 

[HBB new business team]

A person can be in employment and self employed. If you have your own business and work for someone else it's completely feasible. You could always hire them at an hourly rate or on a zero hours contract if you wanted. That means you would be able to ask them to work more when needed, and less so when it isn't.

As they also have there own business they should still be able to make a living if you decide to part companies, the amount of work falls.

 

[JDX_John]

Hiring a skilled professional on a ZH contract seems a bit dodgy - why wouldn't I just hire a contractor in that case? I'm specifically talking about hiring a proper employee as a small home-based business, and any pitfalls this raises. I already hire contractors/freelancers which gives me great flexibility to only pay them when work needs doing, but they owe me no loyalty and it is not really sensible to invest in training them.

 

[HBB new business team]

Yeah that sounds fair enough but if you want to train a member of staff then the salary is the way to go. We train people in our office talking students from 6th from an guiding them through all there professional exams. Most stay but some qualify and move on.

Usually as they are training and you are paying for it they take a lower salary during their training so cost wise it can be just as beneficial. If you do it right the cost savings between them will be marginal, so it depends whether you want to "give something back" by hiring an employee to train up.

It may be good in the long run as a you could find a business partner to help expand the business, or someone to carry it on after you retire. It can be mutually beneficial and very rewarding, from our experiences.

 

[Newchodge]

If you employ someone the first thing you need is Employer liability insurance. You are responsible for the health and safety of your employee at work, even if their workplace is their own home, so you need to have a discussion with them about working conditions etc. You will also need some form of payroll, either by doing it yourself or by using a payroll provider.

The biggest difficulty, I would imagine, will be 'management'. Where will you meet in order to discuss progress, hold appraisals, set targets give training etc. It obviously needs to be somewhere private, but at the same time meeting in either of your homes may be psychologically difficult - either not professional enough or feelings of territorialism.

Good luck