A Guide to Employing Domestic Staff

The maze of UK law requirements for new employers (including those employing domestic staff such as housekeepers, nannies and gardeners) can feel daunting to navigate. However, it is important to consider the legal fundamentals as this will reduce the risk of any claim and help ensure that the new relationship works for both parties.

This overview will highlight the key concerns that a new domestic employer should be aware of and will give some pointers to help you start on the right footing.

Status

The first question to consider is how a staffing arrangement should be structured – should the individual be employed or engaged as a self-employed contractor?

‘Employees’ provide their services personally and are controlled by an employer in terms of working arrangements, hours, annual leave, etc. For example, a full-time housekeeper who is required to work Monday to Friday 9-5, would most likely be considered an employee. Employees (as opposed to ‘self-employed contractors’) receive the best employment protection and are entitled to paid annual leave, sick pay, national minimum wage and protections in relation to dismissal. Their salary should also be subject to deductions for tax and national insurance through a Pay As You Earn (PAYE) system.

‘Self-employed contractors’ have greater autonomy in their roles and their arrangements are normally more informal. For example, a gardener who provides services for five hours per week at times he/she chooses would most likely be considered a self-employed contractor. Self-employed contractors generally do not benefit from employment protections and are typically paid gross.

In our experience, an employment arrangement is the most common and the guidance below will assume an employer-employee arrangement.

Contracts

It is a legal requirement to deliver certain information to a new employee either on or before their first day of employment. Including details of their place of work, rate of pay and working hours, and is typically set out in a contract of employment. Well-drafted contracts go beyond this minimum level of information and contain bespoke clauses, for example, setting out the employer’s expectations of the employee in relation to confidentiality and restricting an employee’s ability to discuss matters relating to their employment on social media.

A comprehensive contract can also set out what happens at the end of the relationship, to ensure that all parties are fully informed and to help avoid an unfair dismissal claim.

Policies

There are certain policies that an employer must have in place, including a disciplinary and grievance policy and procedure. In addition, there are other policies which we always advise our clients to have in place, as they help both employers and employees to better understand what is expected of them, such as a sickness and absence policy and a discrimination and anti-harassment policy.

Getting the admin right: payroll, pension, insurances

We strongly advise our clients to seek the assistance of a payroll provider however big or small their workforce is. Payroll will help with ensuring that employees get paid the correct amount and in a timely manner. This is a task that can become more complex when instances of sick pay, family leave (for example, maternity or paternity leave) and overtime arise.

All employers must establish an autoenrollment pension scheme (which employees are entitled to opt-out of), which both employer and employee will pay contributions in to.

Employer’s liability insurance is also mandatory. This primarily provides insurance where an employee brings a personal injury claim against the employer in the course of their employment. Failure to have a valid policy in place can not only be costly but is also a criminal offence.

Right to work checks

It is important that clients check an employee's right to work in the UK before their employment starts (for example, by checking that they have a UK passport or other visa/work permit). Failure to do so could result in fines of up to £60,000 per employee.

Accommodation

It is not uncommon for domestic employees to live at their place of work, whether in a separate dwelling or in a dedicated space within the same house as their employer. These arrangements need to be clearly documented, normally in a service occupancy agreement. It is important that such agreements make clear that an employee’s right to reside is linked to their employment and that, in the event their employment ends, their right to reside also ends.

For advice on employing domestic staff in the UK, please contact Joe Beeston or Nina Gilroy.

Disclaimer

This note reflects the law as at November 2023. The circumstances of each case vary and this note should not be relied upon in place of specific legal advice.