# Does a small business need HR? What UK law expects you to cover

> Whether a UK small business needs an HR person: the duties the law puts on the employer (written statement, right to work, payroll and pensions, holiday and sick pay, health and safety, staff data, the Acas Code), when a founder or office manager can cover them, signs you need help, and the options from free Acas advice to an employment solicitor.

Source: https://forematter.com/guides/does-a-small-business-need-hr/
Updated: 2026-09-29
Author: Jack Stovell (https://jstov.uk/)

Most people asking this want to know one thing: do I have to hire someone, or buy something, before I take on staff? The short answer is that the law gives the jobs to the employer. It doesn't say who in the business has to do them. So the better question is who owns each job, and when you need help with one.

## Do small businesses have HR?

Plenty have nobody with HR in their title. What they do have is duties, because the law puts those on the employer, not on a department.

GOV.UK has a [step-by-step for employing someone for the first time](https://www.gov.uk/get-ready-to-employ-someone), and it's worth reading as a list of what's actually expected. Check the person is an employee and that you can afford them (minimum wage, National Insurance, sick pay, pension, maternity and paternity pay). Make the workplace safe and accessible. Register as an employer and set up PAYE. Check your workplace pension duties. Get Employers' Liability insurance. Then recruit. Hiring an HR person isn't one of the steps.

Health and safety makes the same point more directly. You must appoint a competent person to help you meet your duties, and the HSE lists ["yourself"](https://www.hse.gov.uk/simple-health-safety/gettinghelp/index.htm) as one of the options. It goes further: "Usually, managing health and safety isn't complicated and you can do it yourself with the help of your workers."

So HR at a small company is really a list of jobs with a name next to each one. Here's the list.

## What the law expects the employer to cover

Think of these as the jobs that land on your desk the moment you take someone on. Whoever does the work, the responsibility stays with you as the employer.

### Contracts and the written statement

You must give a [principal statement on the first day of employment and the wider written statement within 2 months](https://www.gov.uk/employment-contracts-and-conditions/written-statement-of-employment-particulars). The principal statement includes holiday entitlement. The wider one includes your disciplinary and grievance procedures. If anything in it changes, you tell people within one month of making the change.

That sounds like a lot of paper. It's really a handful of documents you write once and keep current. Our guide to the [written statement of employment particulars](/guides/written-statement-of-employment-particulars/) goes through what has to be in it.

### Right to work checks

You must check that a job applicant is [allowed to work for you in the UK before you employ them](https://www.gov.uk/check-job-applicant-right-to-work). Before, not in their first week. If you employ an illegal worker without having done a correct check, you could face a civil penalty. So this goes on the list for every hire, including people you already know. The [right to work checks guide](/guides/right-to-work-checks-employer-guide/) covers how to do it.

### Payroll, minimum wage and pensions

You have to [register with HMRC as an employer before the first payday](https://www.gov.uk/register-employer), and you can't register more than 2 months before you start paying people. Pay has to meet the [National Minimum Wage](https://www.gov.uk/national-minimum-wage), which is the minimum pay per hour almost all workers are entitled to, so check your rates whenever you set or change pay.

Pensions start earlier than people expect. Your [workplace pension duties begin on the day your first member of staff starts work](https://www.thepensionsregulator.gov.uk/en/employers/new-employers), and The Pensions Regulator is blunt about it: "Even if you think you won't need to put your staff into a scheme, you'll still have duties." You must [enrol and pay into a scheme](https://www.gov.uk/workplace-pensions-employers) for staff aged between 22 and State Pension age who earn at least £10,000 a year and normally work in the UK.

You can run payroll yourself with payroll software or have someone run it for you. Either way, someone has to own the dates.

### Holiday and sick pay

Almost all workers are legally entitled to [5.6 weeks' paid holiday a year](https://www.gov.uk/holiday-entitlement-rights). And since 6 April 2026, employers must [keep records of annual leave and holiday pay](https://www.acas.org.uk/employment-rights-act-2025) for at least 6 years. Six years is a long time to remember which spreadsheet it was in, so pick one place for these and stick to it.

Sick pay changed the same day. Statutory sick pay is now paid [from the first day of illness, instead of the fourth day](https://www.acas.org.uk/employment-rights-act-2025). If your payroll or your handbook still waits until day four, it's out of date. There's also a new Fair Work Agency, set up on 7 April 2026, which takes on enforcement of rights such as holiday pay and statutory sick pay.

### Health and safety, and insurance

Every business needs a policy for managing health and safety, and [if you have five or more employees, you must write it down](https://www.hse.gov.uk/simple-health-safety/policy/index.htm). You also need a competent person, which, as above, can be you.

Then insurance. You must get [Employers' Liability insurance](https://www.gov.uk/employers-liability-insurance) as soon as you become an employer, covering you for at least £5 million. You can be fined £2,500 every day you're not properly insured. Every day. Sort this before the first start date, not after.

### Staff records and data protection

You must tell workers what you do with their personal information, and give it to them at the time you collect it. The ICO calls this ["privacy information"](https://ico.org.uk/for-organisations/uk-gdpr-guidance-and-resources/employment/employment-practices-and-data-protection-keeping-employment-records/collecting-and-keeping-employment-records/). Separately, organisations that use personal information [need to pay a data protection fee, unless they are exempt](https://ico.org.uk/for-organisations/data-protection-fee/). Check which applies to you, rather than assuming.

### Discipline, grievance and dismissal

The reference point here is the [Acas Code of Practice on disciplinary and grievance procedures](https://www.acas.org.uk/acas-code-of-practice-on-disciplinary-and-grievance-procedures/html). Not following it doesn't, on its own, make you liable. But employment tribunals take it into account and can adjust awards by up to 25 per cent. The Code also says employers should allow employees to be accompanied at any formal disciplinary or grievance meeting.

Dismissal is where it matters most. Acas says a fair dismissal needs [a valid reason and a fair procedure](https://www.acas.org.uk/dismissals), usually in line with the Code. When you're annoyed or in a hurry, the procedure is the bit that gets skipped, so decide how you'll run it before you need it. Which policies have to exist in writing is covered in our guide to [HR policies for small businesses](/guides/hr-policies-small-business-uk/).

### The Employment Rights Act 2025 changes

Some of this is moving. The Employment Rights Act 2025 is bringing changes in phases, and three dates matter to a small employer this year and next. The time limit for most tribunal claims [rises to 6 months on 1 October 2026](https://www.acas.org.uk/employment-rights-act-2025). From 30 October 2026, employers must take "all reasonable steps" to prevent sexual harassment of their workers. And from 1 January 2027, employees can claim unfair dismissal after 6 months in a job, instead of 2 years.

That last one puts much more weight on the first six months. Probation itself isn't changing, but the [probation periods guide](/guides/probation-periods-uk/) explains why reviews and records matter more now. The full dated list, with sources, is on our [Employment Rights Act 2025 changes page](/changes/).

## When a founder or office manager can cover it

Quite often, honestly. Most of that list is admin, dates and documents. Day to day, it isn't judgement calls about people.

What makes it work is three things.

**One owner per job.** Not "the management team" and not "we all sort of look after it". One named person for payroll, one for pensions, one for health and safety, one for holiday records, and so on. In a small firm that might be the same person for most of them, and that's fine. What matters is that when something slips, everyone knows whose it was.

**Good documents.** Written statements ready to send, a health and safety policy, and a disciplinary and grievance procedure that follows the Acas Code. Write them once, keep them in one place people can find, and check them when the law changes. The [UK small business policy checklist](/templates/uk-small-business-policy-checklist/) is a reasonable way to see what you've got and what's missing.

**A calendar of dates.** Registering for PAYE before the first payday. The two-month deadline for each wider written statement. Pension duties from the first start date. Insurance renewal. The October 2026 and January 2027 changes. Put them in a shared calendar with reminders, because these are exactly the things that go missing when you're busy.

And a fourth, really: knowing when to ask. You don't need a title to do this well. You need a system, and some honesty about where your knowledge stops. There's a longer piece on the opinion side of this, [you are the HR department](/notes/you-are-the-hr-department/), if you want the case for writing answers down once.

## Signs you need more help

Some situations are beyond good documents and a calendar. If any of these turn up, stop improvising.

- **Several starters at once.** The admin multiplies, and so does the chance of missing a right to work check or a written statement. An [onboarding checklist](/guides/uk-employee-onboarding-checklist/) helps, but it may be time for more hands.
- **A first dismissal.** This is the one people underestimate. It's easy to be sure about the reason and still get the procedure wrong.
- **A grievance about a manager or about you.** You can't be neutral about yourself. Someone else should handle it, or at least advise on how it's handled.
- **Long-term sickness or disability adjustments.** These are rarely simple, and they're easy to get wrong.
- **A family leave case you haven't handled before.** Maternity, paternity and parental leave each have their own rules. Working it out as you go is a poor approach.
- **Anything that looks like a dispute.** If you can picture it ending up at a tribunal, treat it that way from the start.
- **A letter from a solicitor or from Acas.** Don't reply on instinct. Get advice first.

One of these is usually enough to justify getting help. Two at once definitely is.

## Your options, from free to paid

There's a rough ladder here, and you don't have to climb all of it.

**Do it yourself with good documents.** This covers the routine work: contracts, policies, records, payroll dates. It costs your time, and it works as long as you're honest about what you don't know.

**Free advice from Acas.** The [Acas helpline](https://www.acas.org.uk/contact/get-advice) is for employers and workers, and it's free and confidential. At the time of writing the number is 0300 123 1100, open Monday to Friday, 8am to 6pm, and the advice is free but your provider may charge for the call. Advisers can explain what the law says and how it relates to your organisation, and talk through your options. They can't take sides, tell you which choice to make, give a legal opinion or act on your behalf. Good for getting your bearings before you decide.

**An HR consultant or a paid advice line.** Outside help you call on when you need it, by the call, the day or the project. This suits the ongoing, practical questions: how to run a process, how to word a letter, whether you're about to make a mistake.

**An employment solicitor.** For disputes, dismissals that might be challenged, and anything heading for a tribunal. Acas explains that it [cannot give 'legal advice'](https://www.acas.org.uk/getting-legal-advice) because it is impartial, and points you to a solicitor who specialises in employment law. In England and Wales you can search the Law Society's [Find a Solicitor](https://solicitors.lawsociety.org.uk/). In Scotland, it's the Law Society of Scotland.

**HR software.** Useful for keeping records, holiday, sickness and documents in one place. But it organises, it doesn't decide. It won't tell you whether a dismissal is fair or whether a grievance was handled properly.

One more route sits alongside all of these. Acas early conciliation is where Acas talks to both sides to try to reach [an agreement without having to go to an employment tribunal](https://www.acas.org.uk/early-conciliation/how-early-conciliation-works), and as an employer [you can ask for it](https://www.acas.org.uk/early-conciliation/requesting-early-conciliation-as-an-employer) if you think a dispute with a worker could lead to a claim. Worth knowing about before things get formal.

Whichever you choose, the legal duty stays with the employer. You can hand off the work, not the responsibility. So match the help to the job, keep one name against each duty, and don't wait for the letter to arrive.

This is general information, not legal advice, so check ACAS or GOV.UK for your own situation.

## Questions people ask

### Do small businesses have to have an HR department?

The duties in employment law sit with the employer, not with an HR department. GOV.UK's step-by-step for employing someone for the first time covers PAYE, pensions, insurance and pay, and hiring an HR person isn't one of the steps. What you do need is someone who owns each duty.

### What are the HR requirements for a small business in the UK?

The main ones are a written statement from day one, right to work checks before employment, registering for PAYE before the first payday, minimum wage, workplace pension enrolment, paid holiday and statutory sick pay from the first day of illness, a health and safety policy (written down at five or more employees), Employers' Liability insurance and privacy information for staff. For discipline and grievance, follow the Acas Code.

### Can the owner do the HR in a small business?

Yes. For health and safety, the HSE says you can appoint yourself as the competent person, and that you can usually manage it yourself with the help of your workers. The rest is mostly documents, dates and knowing when to ask for advice.

### Where can a small business get free HR advice in the UK?

The Acas helpline gives free, confidential advice to employers as well as workers. Advisers explain the law and your options, but they can't give a legal opinion or act for you. Check the Acas website for the current number and opening hours.

### When should a small business get an HR consultant or an employment solicitor?

When something goes beyond routine admin: several starters at once, a first dismissal, a grievance about a manager or the owner, long-term sickness, a family leave case you haven't handled, or anything that looks like a dispute. For legal advice on a dispute, Acas points you to a solicitor who specialises in employment law.

### Does HR software cover my legal duties?

No. It can keep records, holiday and documents organised, but the legal duties stay with you as the employer, and it won't tell you whether a decision is fair.