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What to consider when taking on your first employee?

| Nov 5, 2021 | Entrepreneurial Law |

However large you hope your company will become, you start at the bottom. The first employee you hire is, in many ways, the most important. 

If you get your employment policies correct when starting your business, you create a solid base to build on. If you get things wrong, it could come back to haunt you. Many employees have taken retroactive action against employers for breaching labor laws.

Hiring is more complicated than asking someone if they want a job

You might not have time to read up on employment law when you are busy launching the company, yet you need to make time. Here are some things to think about before you hire anyone:

  • How you structure wages: It takes time to get a company off the ground and establish routines. As an entrepreneur, you may be happy to put stay late and work weekends. Yet you cannot expect paid workers to do the same unless you pay them for it and they want to. Remember that most companies need to pay overtime at time and a half.
  • How you set expectations: No company can function without rules. You will need more as you grow, but you still need some from the outset. What happens if your only employee turns up late, for example?
  • How you protect intellectual property: Someone in at the start will spend more time with you than later employees. They will get access to a lot of critical information that future employees will not. If they take that information, they could put you out of business before you have started.
  • How employees can communicate a problem: You will never notice everything that happens in your company. Yet, you could be held responsible for much of it. If your supplier or co-founder is harassing your employee, you need to know. Think about how you can make it easy for people to report issues.

Remember, your first employee has the potential to be an ambassador for your company or someone that steers new employees in the wrong direction. Hiring someone involves a legal contract. Make sure you get it right now to avoid litigation later.