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Establishing a successful recruitment process and clear written employment contracts for new employees can have a major impact on your business.

Every business needs to be aware of its obligations under minimum wage and equal pay laws, as well as recent pensions auto-enrolment changes.

You must comply with legal restrictions on employees' working hours and time off, or risk claims, enforcement action and even prosecution.

The right employment policies are an essential part of effective staff management. Make sure any policy is clear and well communicated to employees.

While sick employees need to be treated fairly, you need to ensure that 'sickness' is not being used as cover for unauthorised absence.

Most pregnant employees are entitled to maternity leave and maternity pay, while new fathers are entitled to paternity leave and paternity pay.

As well as undermining morale, illegal discrimination can lead to workplace grievances. Employee discrimination is covered by the Equality Act 2010.

Home, remote and lone workers are becoming increasingly commonplace. Key issues include communication and how to manage and motivate people remotely.

The right approach to consulting with and providing information to your employees can improve employee motivation and performance.

Disciplinary and grievance issues can be a major burden to employers. Putting in place and following the right procedures is essential.

Following the right dismissal and redundancy procedures helps protect your business and minimise the risk of a legal dispute at tribunal.

Employment tribunal claims are a worrying prospect for any employer. A tribunal case is a no-win situation – even if the claim is unjustified.

IoD calls on government to scrap National Insurance rise

1 February 2022

The Institute of Directors has written to the chancellor of the exchequer Rishi Sunak urging him to rethink April's planned rise in National Insurance contributions - which it dubs a "jobs tax".

Jonathan Geldart, director general of the Institute of Directors (IoD), has written to chancellor of the exchequer Rishi Sunak to make the case for scrapping the tax rise. The IoD has also launched a #ScrapTheJobsTax online petition.

Under government plans, employees, employers and the self-employed will pay 1.25p more in the pound in National Insurance contributions (NICs) from 6 April 2022. Both Rishi Sunak and prime minister Boris Johnson have insisted that the rise will go ahead, despite the concerns of business groups including the IoD, the Federation of Small Businesses and the CBI.

In his letter, Geldart set out five key impacts that the National Insurance rise will have:

  • It will reduce take-home pay, during a cost-of-living crisis;
  • It will lead to job losses;
  • It will damage the economy;
  • It will cause inflation to rise even further;
  • It will hit hardest those firms that have already suffered the most from the pandemic.

Both the Institute for Fiscal Studies and the National Institute for Economic and Social Research have recently advised that the UK's fiscal position provides more room for manoeuvre than expected. Now the IoD is calling on the Treasury to conduct its own assessment of the impact of the proposed NI rise on the economy and on business.

Geldart said: "The forthcoming rise in National Insurance will have a negative and significant impact on our members and on the wider macroeconomy. In the last few months, the case against the tax rise has, to my mind, only become stronger. That's why we are urging the chancellor to think again about raising National Insurance contributions and are asking for the opportunity to discuss the matter as soon as possible."

Research by the IoD has found that nearly four in ten business leaders said that they would "raise prices because of the tax rise". The key findings show that:

  • 38% will raise prices to offset some, or all, of the cost;
  • 19% of business leaders say they will employ less people;
  • 15% will reduce investment.

However, 20% say it won't affect their business and 29% say they will absorb the cost increase.

Kitty Ussher, IoD chief economist, said: "The forthcoming rise in employers' National Insurance contributions is of real and genuine concern to business leaders, particularly those running small and medium-sized businesses that are the growth engine of our economy.

"Our data shows that the tax rise is also of itself adding further inflationary pressure at a time when prices are already rising fast. Faced with the forthcoming increase in the cost of employing their teams, many businesses are planning to raise prices to offset the cost and/or rein in on their hiring plans."

Written by Rachel Miller.

Image: HM Treasury on Flickr.

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