Although the U.K. has adopted hiring internationally, entrepreneurs surveyed in the U.S. have demonstrated more reluctance when it comes to accessing and hiring global talent, with 36.73% of U.S. entrepreneurs stating they do not hire anyone internationally and don't have current plans to. Remote work has opened the door to a new way of hiring and working, so now is the time for entrepreneurs to assess how the changes to the employment and working model could work for them. 

By recognizing the limitations of local-only hiring and embracing the possibilities of access to global talent, businesses are better able to compete in global markets.

88% of U.K. remote entrepreneurs believe a hybrid or remote company structure has positively impacted their company culture 

The permanent shift to more remote work has already begun to demonstrate its impact on company cultures around the world.

As new patterns emerge, employers must keep the mental health and wellbeing of their employees in mind. 88% of U.K. entrepreneurs believe having a hybrid/remote company structure has positively impacted their company culture, leading to improvements in employee retention, satisfaction, and productivity. 

Here are the top five areas that have benefited from remote/hybrid working (U.K.):

More than a quarter (27%) of entrepreneurs stated a more flexible and autonomous approach to work is a result of their hybrid/remote company structure. This is likely due to increased adoption of asynchronous working, an approach to work that allows employees to be more flexible in when and how they perform their duties.

Only 9% of entrepreneurs said hybrid/remote company structure has not positively impacted their company's culture. For the majority, the positive impacts greatly outweigh the negative.

In the U.S., businesses reported even more positive effects of the remote switch:

Both the U.K. and U.S. name flexibility as the area with the most positive impact, wIth 39% of entrepreneurs in agreement.

We also surveyed entrepreneurs on what they perceive to be the main benefits of hybrid/remote working. One in three entrepreneurs (30%) states that the main benefit of the remote/hybrid model is that it allows more freedom and flexibility. 

Here are the top five reported benefits of remote/hybrid working from U.K. respondents:

For remote entrepreneurs in the U.S., 48.11% also said that the main benefit of remote/hybrid working is freedom and flexibility. 

We discovered differences across gender as well, with 24% of male entrepreneurs saying a hybrid/remote company structure improves mental health and wellbeing, while a third of female business owners (33%) saying the main benefit of the remote/hybrid model is better life-work balance.

More than 1 in 4 (26%) entrepreneurs have invested in team-building events, in person and virtually

Remote team-building is the process of integrating individual workers into a cohesive team while workers are spread across multiple places. Investing in team-building helps build trust and allows people to feel linked to a shared objective, improving efficiency and performance alongside morale.

To establish a good company culture starts with defined values, then continues through communication and hiring with those values in mind. When everyone not only works toward the same goal, but shares the same commitment to excellence, transparency, and ownership, great things can happen.

When we asked about which tactics were best for establishing great culture, we got a wide range of responses. Transparency ranked at the top, alongside expression of gratitude and providing positive feedback.

Building culture is not easy though, nor does it happen by accident. 11% of entrepreneurs have not put any measures in place to establish a good company culture. Because remote teams do not enjoy the same natural culture development that happens in physical offices, leaders of these companies must be more deliberate.

Healthy communication is a critical piece of the puzzle. 28% of U.K. entrepreneurs said they use encouraging feedback to communicate more effectively, engage, and build trust. In addition, almost a quarter (24%) of entrepreneurs said showing appreciation is an effective way to build culture. 

Employee engagement, retention, productivity, and morale may all be improved by demonstrating appreciation. 41.32% of entrepreneurs in the U.S. said they have focused on showing more appreciation while also providing encouraging feedback (35.33%). No matter what the environment, people tend to seek interaction to feel valued and appreciated. 

Almost half of entrepreneurs (47%) have said their priorities have changed for the better since moving to a remote model 

Flexible work arrangements have brought into question traditional employee-employer relationships, work time and working hours, and work-life balance. 46% of entrepreneurs in the U.K. say their priorities have changed for the better since the shift to remote work, including better life-work balance and increased motivation to do the things that matter.

In the U.S., more entrepreneurs say they have seen a change in their priorities (51.26%) and agree those priorities have changed for the better, while 42.23% of U.S. entrepreneurs say priorities remain the same. 

39% of remote business owners have had to overcome financial challenges

For those looking to start their own businesses, we asked remote entrepreneurs what their biggest challenges were and what they believe to be the top benefits.

According to our research, 39% of entrepreneurs say the challenge they had to overcome at the beginning of their journey was financial in nature, e.g. securing funding. 

Another 35% of entrepreneurs say the challenge they had to overcome at the beginning of their journey was work-life balance challenges, e.g. a negative impact on their health. 

Unsurprisingly, many entrepreneurs also reported facing challenges related to coronavirus restrictions and lockdowns. 

Being your own boss is what entrepreneurs enjoy the most

There are several reasons people opt to start their own businesses. Some do it only for financial gain, while others do it to help the community. Owners frequently start businesses for one of the following reasons: expansion, increased profits, inheritance, independence, fulfillment, control, influence, or challenge. Over a third (35%) of entrepreneurs in our survey say the thing they enjoy the most about starting their own company is being their own boss. 

Entrepreneurs from the U.S. also highlight being their own boss as being the aspect of entrepreneurship they enjoy most. Starting your own business can also be a way to express yourself effectively or manage your time more to your convenience. 

Remote businesses will continue to claim a greater chunk of the global economy as more entrepreneurs recognize the value of location-independent growth. If you’re looking to take the plunge into entrepreneurship — or if you have already done so and you’re looking for an edge to grow — transitioning to a remote-first business model may be the key.

As part of that remote-first strategy, you’ll likely need access to talent in multiple locations. But knowing where to hire can be a challenge. Check out Remote’s Country Explorer for more information on where you can hire full-time remote employees and contractors all around the world.

Survey conducted by Remote on 1,505 workers across the U.K., U.S. and Canada.

Methodology

Remote entrepreneurship is a growing strategy in the era of distributed work, with more business owners now operating their companies without geographical constraints on hiring.

During the pandemic, business owners were forced to minimize expenses and decrease risk to survive. Our latest survey shows that of the U.K. companies that have moved to a remote or hybrid business model since 2020, 80% have made savings on their business costs. Because remote work allows for maintained (or even increased) levels of productivity, along with significant cost savings, running a remote business has become the preferred tactic for cost-conscious entrepreneurs.

To gain a better understanding of remote entrepreneurs, workers, and hiring, we surveyed 1,505 entrepreneurs who work remotely across the U.K., U.S., and Canada. This data reveals how founders in these markets run remote businesses and manage their distributed teams. Across our survey sample, 43.72% of business owners who work remotely report some of their staff as being located in another country.

Over half (56%) of U.K. remote entrepreneurs have hired international employees

Companies open to remote employees enjoy greater financial flexibility, a wider pool of accessible talent, and more interest from candidates looking for better life-work balance.

Hiring remote workers significantly increases the pool of available talent, allowing people from all over the world to work for the same company without meeting in an office.  

This survey asked 1,505 participants how many of their employees are based internationally to determine who is making full use of remote working opportunities. One in three (30%) of entrepreneurs in London stated that the majority of their team is based in another country. On a larger scale, more than half (56%) of U.K. remote entrepreneurs have hired at least one international employee. 

Canadian entrepreneurs have also embraced remote work, with 55% of Canadian remote entrepreneurs having hired international employees. 

See the table below regarding the state of hiring remotely across the U.K., U.S. and Canada:

Remote surveyed 1000+ remote entrepreneurs to find out how the remote/hybrid business model has impacted their success.

How has remote work affected entrepreneurs?

How does an SDS help companies comply with IR35 rules?

First, companies under IR35 must produce a Status Determination Statement (SDS) for each contractor. The SDS goes from the end user or end client (the company receiving the service) to the agency (if applicable), then through the PSC/limited company and finally to the individual contractor. The SDS must include information on the decision the company made regarding the contractor’s status as either inside or outside IR35, plus the reasoning for the decision and evidence of reasonable care in deciding.

If the contract changes, the company engaging the contractor’s services must create a new SDS to determine whether the relationship with the contractor changed under IR35.

What happens if the contractor disagrees with the SDS the company creates?

Contractors may appeal SDS decisions verbally or in writing within 45 days of receiving the notification. Once the company receives the complaint, the company has an additional 45 days to respond.

Companies in this situation have two options:

Uphold the decision and respond to the contractor in writing citing the reasons why.

If the company fails to comply with the 45-day limit, the company becomes responsible for taxes and NICs incurred by the contractor for the changed status.

What is ‘reasonable care’ in the eyes of IR35?

HMRC expects companies to collect relevant information via SDS to determine whether contractors lie inside or outside IR35. Due diligence can vary, but should include records like:

Does the contractor take financial risks, i.e. is the contractor legitimately represented through the PSC/limited company?

What actual work practices does the contractor perform? Are these practices different from those conducted by full employees at the company?

Answering questions like these demonstrates reasonable care that the company attempted to comply with IR35 rules. Companies must maintain these records and document their reasoning for determining contractor status. Under no circumstances should companies make a ‘blanket’ decision about all their contractors’ statuses.

What is the CEST (Check Employment Status for Tax)?

The CEST is an online tool created by HMRC that presents a series of questions to help businesses determine the status of contractors and employees for tax purposes. This tool can be used as part of “reasonable care.”

Businesses can access the CEST on the UK government’s website.

What Is IR35 & What Does It Mean For Your Business?

What is IR35 and what does it mean for your business?

If you employ workers in the UK (or if your UK company employs workers outside the country), Brexit could create headaches for you and your team.

Although the UK has already terminated its membership in the EU, the UK will not complete the Brexit process until January 1, 2021. At that point, changes related to immigration, visas, and other matters of employment will come into effect.

As of November, the UK still has not made a new deal with the EU. This no-deal Brexit could make life even more difficult for companies in a number of countries. Without a new deal, the UK would be subject to a variety of new tariffs on goods, as well as border checks for travelers, which officials expect to cause significant travel delays. In the event of a no-deal Brexit, many UK citizens could find it difficult to travel to other countries within the EU.

The European Economic Area, or EEA, is an agreement between European countries that allows its members to trade with one another in a single market. The EEA includes EU members and non-EU members.

In 2020, the UK has operated as a member state of the EEA. However, unless the country makes a new deal to regain membership, which appears unlikely, the UK will fully exit the EEA in January 2021.

How are visa requirements changing in the UK after Brexit?

Anyone who attempts to immigrate to the UK beginning in January 2021 must procure a visa in advance. This was always the case for some nations, but it is a new requirement for citizens of other EU countries. Irish citizens are unaffected, however, and may continue to enter and leave the UK for work without the need for extra documentation.

UK companies recruiting talent to come work inside the UK must observe several requirements. Candidates must have an offer from a licensed sponsor, speak English proficiently, and have a job of a minimum skill level of RQF3 on the UK’s scale. Candidates must also be paid at least £25,600 or the average pay for the position, whichever is higher. Salary can be lower for employees with extra visa points in other areas, but salary may not dip below £20,480. 

The UK uses a points-based system to issue work visas. Prospective immigrants, temporary and permanent, must fulfill specific criteria to receive work visas of different types. There are occasional exemptions regarding visa requirements, but these are rare. If you have an employee who wishes to move to the UK, contact Remote to learn what kind of visa you need.

How do UK companies check applicants’ right to work?

UK companies are required to ensure all applicants have the right to work in the country. This applies to international employers as well. If you are hiring in the UK from abroad, Remote verifies your employees’ eligibility to work in the country. 

Until June 30, 2021, applicants can continue to demonstrate their right to work in the UK with a passport or national ID (if in the EU, EEA, or Switzerland); with qualified immigration documents; or through an online portal. After June 30, 2021, new rules will go into effect, but those rules have not been finalized yet.

How can companies transfer a worker to the UK after Brexit?

Companies can transfer their international employees to their offices in the UK, provided those employees meet certain standards:

Employees must receive an Intra-Company Transfer sponsorship from a Home Office licensed sponsor.

Employees must have at least one year of tenure working for the sponsoring company in another country. Employees who earn more than £73,900 are exempt from this requirement.

Employees must earn a minimum salary of £41,500 or the average pay for the position, whichever is higher.

If a company does not have an office or legal entity in the UK but has an employee moving to the UK, the information in the next section applies.

How do EU companies pay their UK employees after Brexit?

Before Brexit, companies based in other EU nations had more flexibility regarding payment of UK employees. Now, companies inside and outside the EU must treat their UK employees as they would any other foreign employees.

In most cases, this means companies cannot employ and pay workers in the UK without an established legal entity within the country. This was true for permanent employees before Brexit, but now that movement between countries has become more restricted, companies should be cautious before sending employees to work in the UK on long assignments. Permanent reassignments or continued employment of UK employees always requires a legal entity, unless the employee is paid as a contractor.

Paying employees as contractors may expose companies to risks of misclassification, though, which can get expensive and lead to legal penalties. To stay compliant with labor laws in the UK, companies employing full-time workers in the country must use an employer of record. Remote’s global employment solutions include UK employer of record services.

How do UK companies pay employees in the EU after Brexit?

Companies in the UK with employees outside the UK must follow the same process as companies outside the UK with employees inside the UK. Unfortunately, the more countries where UK companies need to employ workers, the more complex paying those workers becomes.

To employ and pay EU workers legally, a UK employer must either set up a local legal entity in each country where those employees live or partner with an employer of record. Because Remote owns and operates local legal entities across the EU, we can help companies inside and outside the UK pay employees no matter where they work.

What happens when a company leaves the UK during or after Brexit?

Some companies have moved their headquarters to other EU countries to avoid difficulties with Brexit. These companies must go through the long and difficult process to open their own legal entities in their newly chosen homes. However, most companies moving their headquarters do not completely shut down their UK entities. 

If a company shuts down its UK entity, that company will need to work with a UK employer of record to continue to employ UK talent. If the company retains its legal entity, however, the company may continue to employ UK workers through that entity. Companies choosing this route must continue to maintain relationships with law firms, payroll providers, and benefits administrators within the UK to stay compliant with evolving UK employment laws.

Regardless of where your organization calls home, Remote makes it easy for companies of all sizes to employ international talent. Our local legal experts ensure you and your employers are compliant with all applicable labor laws and regulations in your region. No matter what deals and agreements the UK makes in the Brexit aftermath, Remote can keep your company in compliance while providing a first-class experience for your employees.

What Does Brexit Mean for Employers?

What does Brexit mean for employers?

Which employee benefits are common in the UK?

Workers in the UK are entitled to a minimum of 20 paid days off plus eight paid public holidays. Employers are required to pay employees for holiday leave but are not required to pay overtime for employees who choose to work on holidays. To attract top talent, many employers choose to offer more than the minimum 28 days.

Northern Ireland has two extra public holidays for a total of 10 paid holidays.

Employees in the UK may only roll over a maximum of eight PTO days per year in most circumstances. Employees forced to take another kind of leave (such as long-term sick leave) may roll over up to 20 days.

Employers are required to pay out unused PTO if an employee leaves during the middle of the year, up to the amount the employee has accrued during the current year.

Businesses with UK workers can offer unlimited PTO, but they must ensure their employees take enough time off. Employers who do not track PTO for workers in their home country must track PTO for workers in the UK to remain compliant with UK law.

The UK minimum wage depends on the age of the worker. Teenagers from 16-17 may work for a minimum of £4.15 per hour, while those older than 25 years old may not work for less than £8.72 per hour. This wage for workers aged 25 years and up is referred to as the National Living Wage.

Note that the UK government does not mandate overtime pay for workers. Companies often choose to include overtime pay in employment contracts if the job regularly requires overtime work.

UK employees may miss up to one week of work without needing to provide a doctor’s note, also called a “fit note.” After one week, however, the sick employee must provide the employer with a document from a doctor verifying the illness.

Statutory sick pay, also known as long-term sick pay, provides workers with £95.85 per week and is paid by the employer. If the employee remains ill, the employer must pay statutory sick pay for a duration of up to 28 weeks. Employment contracts can extend this time period but cannot shorten it.

Although a worker on long-term sick leave cannot be forced to work, workers continue to accrue PTO during their absence as if they were at work. If an employee chooses to quit after several weeks of sick leave, the employer must pay out unused PTO accrued up to the day of departure, not up to the day the illness began.

Maternity leave in the UK is split into two parts: ordinary maternity leave and additional maternity leave. Ordinary maternity leave in the UK lasts for the first 26 weeks, while additional maternity leave adds another 26 possible weeks, for a total of 52 weeks of leave. Expecting mothers may begin to take their leave 11 weeks prior to the due date. Mothers are required by UK law to take at least two weeks of leave after the birth of the child.

Employers are required to pay 90% of the mother’s average wages for the first six weeks of maternity leave. For the next 33 weeks, employers must pay the lesser of 90% of average earnings or £148.68 per week. Employers do not have to pay for the final 13 weeks of maternity leave, but mothers are still entitled to that leave if they do not need to return to work.

A mother wishing to change the return-to-work date must provide at least eight weeks’ notice to the employer.

Mothers do not need to work for any minimum period of time to be eligible to take the full amount of maternity leave allowed by law.

Paternity leave in the UK is much shorter than maternity leave at just two weeks. Paternity leave may not begin before the birth of the child, but employees may use paternity leave any time during the child’s first year of birth, provided the leave is taken consecutively.

Partners of pregnant employees are eligible for paternity leave regardless of gender. To qualify for paternity leave, the employee must be one or more of:

The legal partner of the person giving birth

The child’s intended parent, if planning to care for the child after surrogacy

While mothers taking maternity leave are not required to work for a minimum length of time before becoming eligible, paternity leave requirements enforce a minimum of at least 26 consecutive weeks of employment before eligibility begins. 

Shared parental leave does not stack on top of maternity and paternity leave, but many families choose to share leave after the birth of a child. Shared parental leave can extend up to 50 weeks with up to 37 weeks paid. Parents do not have to take shared parental leave at the same time, or even consecutively, but must use the time within the first year after the birth.

Employers of UK workers are required by law to contribute a minimum of 3% of every worker’s salary toward a pension plan. Employees must contribute a minimum of 5% of their salary toward the plan. Employment contracts can increase these contributions but not decrease them.

Plans vary, but most fall into two categories: defined contribution schemes and defined benefit schemes. In defined contribution schemes, the amount of future payments increases based on how much the employee puts in. These operate similarly to 401(k) plans in the US. In defined benefit schemes, employees still contribute a set amount, but the amount paid does not depend on the amount contributed. Instead, the payments upon retirement are based on other factors, like how long the employee worked for the company and their highest level of seniority achieved.

In most cases, employers automatically enroll employees in pension contributions, provided the employees are between the ages of 22 and 66 and earn at least £10,000 per year. Employers can postpone pension enrollment for up to three months, but to do so, they must notify the worker of the postponement in writing and have a legally valid reason to postpone.

The UK government provides health insurance for all citizens through the NHS. However, some companies attract top talent by offering premium private health insurance as part of the total compensation package. Private health insurance may provide access to clinics with shorter wait times or cover more elective procedures. Employers often give employees a cash stipend to use to find their own private plans.

Because the NHS and private health plans do not cover a few specific types of care, some employers offer additional insurance as part of employees’ compensation. These insurance offerings can include dental insurance, vision insurance, fertility support, specialized disability support, and others outside the coverage zone of standard health care.

Offer your UK employees better benefits with Remote

Remote is the expert on all things global employment. We can help you provide your team in the UK with a superior benefits package to ensure your company can attract and retain the top talent in your field. Contact us today at sales@remote.com to learn more about our UK employer of record and contractor management solutions.

Companies in the UK must offer a specific set of employee benefits to remain compliant with UK labor laws. This is especially important for foreign employers of remote UK workers who may not be familiar with common benefits in the UK.

To compete for top UK talent, businesses should offer a more competitive benefits package that goes beyond the basic requirements. Remote’s guide on hiring remote workers in the UK covers a variety of topics on UK employment, payroll, benefits, and labor laws. In this article, we will examine a variety of statutory, standard, and premium benefits in the UK.

Employees and workers (two distinct terms) are entitled to statutory benefits in the UK. Employees meet the traditional definition of full-time workers and sign employment contracts with their employers. Workers operate in a gray area between contractors and employees. Some companies that have attempted to classify workers as contractors have run into trouble under UK laws.

For more information on employers and workers, view Remote’s introduction to UK labor laws. Remote helps businesses avoid classification troubles with an employer of record solution that guarantees full compliance with all UK labor laws.

Benefits to offer employees in the UK

Employers in the UK are not required by the government to pay overtime rates. However, employers may not require employees to average more than 48 hours of work per week in most cases. Workers in the UK are also not entitled to special wage rates for working on public holidays.

While overtime is not required by law, many employers in the UK do provide overtime pay for employees who work beyond 40 hours per week. Companies that choose to offer overtime pay must outline the rules and limitations of their overtime offerings within their employment contracts.

In some cases, workers may agree in writing to work more than 48 hours per week on average. If they choose to do so, they must be allowed to cancel that commitment by providing one week’s notice.

You can use Remote to onboard, manage, and pay contractors around the world in one click. Remote's Contractor Management product makes it easy for companies to pay contractors in the UK in your own local currency.

How do IR35 rules affect contractors in the UK?

IR35 rules prevent companies from taking advantage of a tax loophole to classify workers operating in an employment-like relationship as contractors.

In the UK, contractors sometimes work through personal service companies, or PVCs. PVCs are third parties that hire contractors then sell those contractors' services to companies. The UK government recently identified a loophole through which companies were hiring contractors through PVCs when those contractors should have been classified as employees.

To remedy the situation, the UK government put new IR35 rules into effect. Where previously contractors were responsible for managing their classification status with PVCs, new rules now require companies hiring contractors to verify that any PVC intermediaries are valid and that the relationship between contractor and company would not constitute that of an employer-employee relationship in the absence of the PVC.

IR35 rules are a tricky area of UK employment law, even for experienced companies. Remote helps insulate companies from issues that could arise from misclassification and helps businesses remain compliant and protected under UK law.

What currencies can you use to pay UK employees?

UK employees must receive their pay in pounds. Companies in the US cannot pay their remote UK employees in dollars. To provide consistent payment, most companies set the employee salary in pounds in the employment contract, then absorb (or gain, depending on changes in currency values) the difference.

What is the difference between workers, contractors, and employees in the UK?

Workers and employees are distinct from one another in the UK, as we cover in our article on UK labor laws. Workers exist in a gray area between employees and contractors. Companies paying workers as contractors may run into legal trouble, as Uber and other gig-based companies have in the UK. Remote can help companies clarify worker and employee relationships in the UK and pay their teams appropriately.

What is included in UK employment contracts?

All full-time employees in the UK must sign employment contracts per the Employment Rights Act 1996. These contracts protect workers from unscrupulous employers, but they also protect employers by outlining every detail of the employment relationship. Mandatory contracts ensure employees cannot claim they did not receive a promised benefit or were hired into the wrong role.

Employment contracts include a variety of details, such as:

Pension contribution minimums (for both employee and employer)

Note that most details are mandatory, while some (such as performance expectations and company rules) may vary from one company to another.

Pay your remote employees in the UK with Remote

The UK has a thriving and diverse pool of talented workers in a variety of competitive industries. Remote helps businesses all over the world pay their UK employees in complete compliance with all UK laws while providing a first-class experience for their remote teams.

With our employer of record solution, we can help companies employ top talent in the UK without opening a local legal entity or paying a percentage of the employee’s salary to a third party. We offer a full EOR solution for a low flat rate — no hidden fees, no long-term commitments. To learn more about our employer of record and contractor payments solutions, reach out to sales@remote.com.

Remote’s guide on hiring employees in the UK provides a high-level overview of UK payment processes, benefits expectations, and UK labor laws. In this guide, we will cover how to pay remote workers in the UK in greater detail.

Paying remote workers in the UK is functionally straightforward, but the process does involve a few legal hurdles. To ensure your employees, workers, and contractors receive their pay without interruption, start here.

Can foreign businesses pay remote workers in the UK directly?

To pay employees in the UK, a company based outside the country must either set up a local legal entity or employ their foriegn workers through an employer of record, like Remote. Companies can also pay their workers as contractors: however, this approach is only valid if the relationship is legitimately a contractor relationship. Otherwise, the company could be subject to penalties and fines.

What payslip deductions are employers of UK workers required to make?

Employers of remote UK workers must deduct social contributions and taxes from employee payslips. Much like in the US, these contributions cover things like social security programs and unemployment benefits. Employers must also deduct a percentage of pay to help fund the NHS, the UK’s universal healthcare service, as well as mandatory contributions to pension schemes.

How much do companies and employees pay for pension schemes and retirement plans in the UK?

Employers must contribute a minimum of 3% of each individual employee’s pay to a pension scheme. Employees must contribute at least 5% of their own pay to a pension scheme, which employers must show on the employees’ payslips.

Employers in the UK are required by law to contribute at least the minimum amount to employee pension funds. Employees are usually enrolled automatically to contribute a percentage of their pay as well. While employees may opt out of contributions, companies are not allowed to encourage, intimidate, or otherwise convince employees to opt out of pension contributions.

What information is required on UK payslips?

Companies employing UK workers are required by law to provide payslips with itemized information regarding deductions, hourly rates, and other key information. Payslips should detail any deductions, including pension deductions; taxes; fees for social contributions; and payment information.

Payment information must include a complete and accurate assessment of the amount paid, hours worked, and hourly rate. When employees receive overtime pay, employers can either break down hours worked into regular hours and overtime hours or display all hours worked at the average hourly rate for the duration of the payment period.

How To Hire & Pay Remote Workers In The UK

How to pay remote workers in the UK

Labor laws in the UK, while similar to those in the US, maintain a few important distinctions international employers need to understand. Employers looking to hire employees in the UK should research UK labor laws before moving forward with a new hire, continuing to employ a worker who moves to the UK, or converting a UK contractor into an employee.

What is the difference between an employee and a worker in the UK?

UK labor laws differentiate between “employees” and “workers.” 

Employees in the UK meet all the standard qualifications traditionally associated with full-time workers. Under UK law, anyone who works hours set by an employer, in a location determined by an employer, using methods determined by an employer, or in an otherwise dependent relationship is considered an employee.

In the UK, full-time employees must sign an employment contract with their employers. These employment contracts outline the details of things like benefits, productivity expectations, pension contributions, and other important details. Anything not in the contract is not considered to be part of the agreement between the parties.

Workers are a little fuzzier. In the UK, the term “worker” does not include contractors, but it does include some people who fall between the definitions of employees and contractors. Gig economy companies like Uber are currently fighting against court rulings classifying their drivers as workers, for example.

Workers are entitled to many of the benefits employees receive, including paid holidays, a minimum wage, reasonable breaks, pension contributions, and other rights.

United Kingdom

How has remote work affected entrepreneurs?

What is IR35 and what does it mean for your business?

What does Brexit mean for employers?

Benefits to offer employees in the UK

How to pay remote workers in the UK

Written by • Vittoria Bilello

What are labor laws like in the UK?

Guide on hiring in the UK