Employer of Record Guide in 

United Kingdom

Annual Leave

• Statutory minimum: 28 days (including bank holidays) for full-time employees
• Pro-rata calculation: Part-time employees receive proportional entitlement
• Accrual: Leave typically accrues monthly (2.33 days per month for full-time)
• Carry-over: Up to 8 days can be carried to next leave year (with employer agreement)

Sick Leave

• Statutory Sick Pay (SSP): £116.75 per week for up to 28 weeks
• Qualifying conditions:
  • Sick for 4+ consecutive days
  • Earn at least £123 per week
  • Give proper notice to employer
• Company sick pay: Many employers provide enhanced sick pay schemes

Maternity Leave

• Statutory Maternity Leave: Up to 52 weeks total
  • Ordinary Maternity Leave: First 26 weeks
  • Additional Maternity Leave: Further 26 weeks
• Statutory Maternity Pay:
  • First 6 weeks: 90% of average weekly earnings
  • Next 33 weeks: £184.03 per week or 90% of earnings (whichever is lower)
  • Final 13 weeks: Unpaid

Paternity Leave

• Statutory Paternity Leave: 1-2 weeks within 56 days of birth/adoption
• Statutory Paternity Pay: £184.03 per week or 90% of earnings (whichever is lower)
• Shared Parental Leave: Parents can share up to 50 weeks of leave and 37 weeks of pay

Bereavement Leave

• Parental Bereavement Leave: 2 weeks for parents who lose a child under 18
• Parental Bereavement Pay: £184.03 per week or 90% of earnings (whichever is lower)
• Other bereavement: No statutory entitlement, depends on company policy

Other Leave Types

• Time off for dependants: Reasonable unpaid time for family emergencies
• Jury service: Paid time off (employer can reclaim from court)
• Trade union duties: Reasonable paid time off for union representatives

Summary

Termination Types

Dismissal for Cause (Gross Misconduct):

• No notice period required
• Must follow fair procedure
• Examples: theft, violence, serious breach of contract

Dismissal Without Cause:

• Requires proper notice or payment in lieu
• Must follow fair procedure
• Includes redundancy, capability, and conduct issues

Notice Period Requirements

Statutory Minimum Notice:

Contractual Notice:

• Often longer than statutory minimum
• Must be clearly specified in employment contract
• Can be paid in lieu (PILON) if contract allows

Redundancy Pay

Statutory Redundancy Pay:

• Available after 2+ years of continuous employment
• Calculation based on age, length of service, and weekly pay (capped at £700)
• Maximum statutory payment: £21,000

Enhanced Redundancy:

• Many employers offer above statutory minimum
• Tax-free up to £30,000

Unfair Dismissal Protection

• Qualifying period: 2 years of continuous employment
• Compensation: Basic award plus compensatory award
• Maximum award: £115,115 (as of April 2025)
• Automatic unfair dismissal: Some reasons (pregnancy, whistleblowing) have no qualifying period

Final Pay Requirements

• Final salary: Must be paid by next normal payday
• Accrued holiday pay: Must be paid for unused annual leave
• Notice pay: If payment in lieu is given
• Other contractual payments: Bonuses, commission (if due)

TUPE Regulations

Transfer of Undertakings (Protection of Employment) Regulations protect employees when businesses transfer:

• Employment contracts transfer automatically
• Terms and conditions preserved
• Consultation requirements with employee representatives

Bank Holidays (England & Wales)

Regional Variations

Scotland:

• St. Andrew's Day (November 30)
• No Easter Monday bank holiday

Northern Ireland:

• St. Patrick's Day (March 17)
• Battle of the Boyne (July 14)

Bank Holiday Pay

• Employees: Entitled to paid time off or day in lieu
• Workers: May be entitled depending on contract
• Part-time employees: Pro-rata entitlement
• Working on bank holidays: No statutory premium, depends on contract

Additional Observances

• Coronation Day: May be declared as additional bank holiday
• Jubilee celebrations: Occasional additional holidays
• Local holidays: Some regions have traditional local holidays

Required Documentation

Employment Contract Must Include:

• Job title and description
• Start date and place of work
• Salary and payment frequency
• Working hours and holiday entitlement
• Notice periods and disciplinary procedures

Right to Work Verification:

• All employees must provide right to work documentation
• Acceptable documents include passport, visa, or combination of documents
• Digital right to work checks available for some visa types

Tax and National Insurance:

• P45 from previous employer (if applicable)
• Starter checklist if no P45 available
• National Insurance number verification

GDPR Compliance

Data Protection Requirements:

• Privacy notice explaining data processing
• Lawful basis for processing personal data
• Employee consent for non-essential processing
• Data retention and deletion policies

Sensitive Data:

• Criminal record checks (DBS) where legally required
• Health information for reasonable adjustments
• Explicit consent required for processing

Pension Auto-Enrolment

Automatic Enrolment Requirements:

• All eligible employees must be enrolled
• Minimum contributions: 8% total (3% employee, 5% employer)
• Qualifying earnings: £6,240 to £50,270 annually
• Opt-out period: 1 month from enrolment

Probationary Periods

• Typical duration: 3-6 months
• Reduced notice: Often 1 week during probation
• Performance monitoring: Regular reviews and feedback
• Extension: Possible with employee agreement

Onboarding Timeline

What the EOR Handles

Borderless AI manages:

• Employment contract creation and compliance
• Right to work verification
• PAYE and National Insurance registration
• Pension auto-enrolment
• GDPR compliance documentation
• Statutory payment calculations

Worker Classification

Employment Status Tests:

• Control: How much control does the employer have?
• Personal service: Must the individual do the work personally?
• Mutuality of obligation: Is there ongoing obligation to provide/accept work?

IR35 Regulations:

• Apply to contractors working through intermediaries
• Determine whether contractor would be employee if working directly
• Client responsible for status determination (off-payroll working rules)

Trade Unions and Collective Bargaining

Union Recognition:

• Voluntary recognition by employer
• Statutory recognition through Central Arbitration Committee
• Collective bargaining rights for recognised unions

Industrial Action:

• Legal requirements for strike ballots
• Notice periods for industrial action
• Protection for union members

Equality and Discrimination

Protected Characteristics:

• Age, disability, gender reassignment, marriage/civil partnership
• Pregnancy/maternity, race, religion/belief, sex, sexual orientation

Employer Duties:

• Prevent discrimination, harassment, and victimisation
• Make reasonable adjustments for disabled employees
• Gender pay gap reporting (250+ employees)

Flexible Working

Right to Request:

• Available to all employees from day one
• Can request changes to hours, times, or location
• Employer must consider reasonably
• One request per 12-month period

Types of Flexible Working:

• Part-time, flexitime, compressed hours
• Job sharing, remote working
• Term-time working

Health and Safety

Employer Responsibilities:

• Provide safe working environment
• Risk assessments and safety training
• Accident reporting (RIDDOR)
• Employers' liability insurance

Employee Rights:

• Right to refuse unsafe work
• Health and safety representatives
• Consultation on safety matters