The United Kingdom of Great Britain and Northern Ireland, also known as the UK or Britain, is a sovereign country off the northwestern coast of the European mainland. The UK has the sixth-largest nominal gross domestic product (GDP) and the ninth-largest purchasing power parity economy worldwide. It ranks 14th in the world in terms of the human development index and has a high-income economy.
The United Kingdom has a fiercely autonomous, developed, and global trade economy at the forefront of the 19th-century Industrial Revolution.
Machinery, cars and other forms of transportation, electrical and electronic equipment (including computers), chemicals, and oil are among the leading British exports. Another significant export for Britain is services, notably financial services, which help to balance the country's trade. One-tenth of the nation's food supply and one-third of its industrial and transportation equipment are imported.
Why work in
The United Kingdom's economy has historically relied heavily on trade. The combined value of imports and exports accounts for almost half of the nation's GDP.
In terms of ease of doing business, the UK is ranked in the top ten markets worldwide. It is also one of the top ten countries for developing tech companies. One of the top worldwide centres for fintech startups and the capital of the United Kingdom, London, has received recognition for both of these accolades.
According to Yahoo! Finance, London is the home to at least 80 unicorns or tech companies with a value of one billion dollars or more. London also ranked high in terms of access to early-stage investment.
In addition, the UK provides international firms with access to a vast pool of young, brilliant workers who migrate there from all over the world to complete their degrees at one of the nation's many prestigious colleges and then enter the workforce.
Through the Gloroots’ Recrew platform, you can discover amazing talent in the UK.
Grow your team in
Growing a team means hiring the right employees at the right time and for the appropriate positions. Employers in the UK must have a local legal organization and use local resources to handle compliance, payroll, tax, and benefits management. The complexity of employment regulations in Belgium makes compliance with employment laws demanding.
With Gloroots’s global Employer of Record (EoR) service, you can let Gloroots do the heavy lifting of payroll, tax, benefits, and compliance and concentrate on what matters to you most: your employees and company growth.
Risks of misclassification
UK treats contractors, sole proprietors, self-employed individuals and full-time workers differently and there are significant risks associated with misclassification.
Employees in the United Kingdom are protected by basic employment rights enshrined in different Acts, Regulations, common law, and equity. The rights to minimum pay, paid holidays, time off from work, a cap on excessively long workdays, automatic enrollment in a basic occupational pension, and leave policies are all included in this.
It is required to give new hires a written statement detailing the fundamental terms of employment, which must include:
- Compensation (in GBP)
- Working hours
- Annual leave
- Sick pay
- Severance pay
- Notice period
However, negotiating a good employment contract is standard practice for employers and employees. Even though the majority of work contracts are long-term, fixed-term agreements are nevertheless an option.
It’s important for employers to understand the intricacies of these programs before making a hire.
This might sound overwhelming—but it doesn’t have to be. A solution like Gloroots eliminates the barriers for you. With Gloroots’ Employer of Record offering, hiring and managing employees globally is a piece of cake.
Get an overview of what you need to know when hiring in the UK.
Legal aspects of employing in
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Employment laws in the UK are informed by several Acts.
Employment Rights Act 1996: Covers dismissal, unfair dismissal, paternity leave, maternity leave and redundancy.
National Minimum Wage Act 1998: Informs minimum wages.
Employment Relations Act 1999: Covers rights at work for trade union recognition, derecognition, and industrial actions.
The Maternity and Parental Leave etc. Regulations 1999: Covers the rights of employees to time off work during and after pregnancy.
Part-Time Workers (Prevention of Less Favorable Treatment) Regulations 2000: Covers the rights and compliance for part-time workers
The Equality Act 2010: An act that prevents discrimination in the workplace and the recruitment process.
Agency Workers Regulations 2010: Statutory legislation that prevents discrimination against people who work for employment agencies. Treat them equally in pay and working time when compared to full-time counterparts who do the same work.
Employers are required to provide new employees with a written statement that outlines essential employment terms, including compensation, working hours, annual leave, sick pay, severance pay, and notice period. While this is a legal requirement, it is common for employees and employers to negotiate a more detailed employment contract. These contracts can be either for an indefinite period or a fixed-term, providing flexibility for both parties involved.
This might sound overwhelming, but it doesn't have to be. Gloroots eliminate these barriers for you. With Gloroots' Employer of Record offering, hiring and managing employees globally is a piece of cake.
Get an overview of what you need to know when hiring in the U K. Contact us.
The typical workweek comprises 40 hours and must not exceed an average of 48 hours over a period of 17 weeks. However, employers have the option to request workers to voluntarily opt out of the 48-hour limit.
In the UK, any work performed beyond the standard working hours per week is considered overtime and is subject to the terms outlined in the employment contract or collective agreements. In most cases, white-collar workers are requested to waive the 48-hour limit, allowing them to work additional hours without any restrictions or extra compensation. However, there are exceptions to this rule. Overtime payment may be required if the waiver is not signed, in industries governed by collective bargaining agreements, or if specific provisions for overtime pay are specified in the employment contract.
As of April 1, 2023, the national minimum wage in the UK varies based on the age of the employee. The minimum wage rates are as follows:
These rates ensure that employees receive fair and appropriate compensation based on their age and level of experience.
Maternity Leave and Paternity Leave
In the UK, female employees are entitled to a total of 52 weeks of statutory maternity leave. This consists of 26 weeks of ordinary leave and an additional 26 weeks of additional maternity leave.
While it is not mandatory for the employee to take the full 52 weeks of leave, a minimum of two weeks after the birth of the child is required. Please note that this requirement may vary depending on the specific sector in which the employee works.
During maternity leave, mothers are eligible for Statutory Maternity Pay (SMP). SMP provides compensation for up to 39 weeks, with the payment amount varying depending on the specific timeframe. For the first six weeks, the employee receives 90.00% of their average weekly earnings. For the remaining 33 weeks, the employee is entitled to either £156.66 or 90.00% of their average weekly earnings, whichever is lower.
Full-time employees in the UK are entitled to 20 working days of paid annual leave per year. Typically, this includes bank holidays. However, employers have the discretion to offer additional leave, often providing workers with 25 days in total. The specifics of the annual leave entitlement, including any additional days, should be clearly stated in the employment contract.
In response to the impact of COVID-19, employees who were unable to utilize their entitled holiday leave are permitted to carry it over to the following two years. This flexibility allows for the accommodation of unforeseen circumstances related to the pandemic.
Employees in the UK can receive up to 28 weeks of paid sick leave, known as Statutory Sick Pay (SSP). The minimum compensation for SSP is £109.40 per week. However, SSP is not payable for the first three days of any sickness absence. Many employers have their own sick pay schemes and may provide full salary during the initial three days.
If an employee's sick leave extends beyond seven days, including weekends and bank holidays, they must provide a medical certificate from a professional doctor.
In addition to SSP, employees may be entitled to contractual sick pay, which offers a higher rate of pay during sick leave, if their employer provides this benefit.
For employees who are sick with COVID-19 or live with someone who has the virus, there may be eligibility for statutory sick pay.
The majority of employees belong to category A in terms of income tax classification.
To know about further categories, please visit : National Insurance rates and categories: Contribution rates - GOV.UK (www.gov.uk)
Other Taxes and Social Security contribution:
Employer Payroll Contributions:
Employee Payroll Contributions:
The process of ending employment differs depending on the employment agreement and collective agreement in effect, and it is determined by the type of contract and the reason for termination. Whether a dismissal is considered fair or unfair depends on the justification and behavior associated with the termination.
It is important to note that pregnant employees or those on maternity leave are protected from termination.
In the UK, the duration of notice periods is determined by either the employment contract or the minimum requirements set by law, whichever is longer.
Regarding redundancy, the legally mandated notice period is a minimum of one week's notice for employees who have worked between one month and 2 years. For each additional year of service beyond 2 years, an employee is entitled to one week's notice, up to a maximum of 12 weeks' notice.
In instances of serious misconduct, it is possible for an employee to be dismissed without any notice.
Employers also have the option to provide payment in place of the notice period.
Severance pay is obligatory solely in situations of redundancy. The precise sum of severance pay relies on the employee's age and their minimum two years of service:
Note: The weekly pay used for calculation is capped at £571.
The maximum period of service considered for severance pay calculation is 20 years.
Severance pay is not required for regular termination cases.
The United Kingdom does not have specific legal regulations regarding probation periods. However, probationary periods usually range from three to six months.
The terms and conditions of the probationary period are typically specified in the employee's employment contract.