Good employees can be your greatest asset, so recruiting and retaining the right people is very important to your business success.
There are important things to consider when employing and managing your staff, as well as an understanding of the legal obligations for you and your employees.
Design the job
The first step in hiring an employee is to think about the job that needs to be done.
- What functions need to be done?
- What level of responsibility and authority will the worker have? For example, will the employee manage staff, be able to sign contracts, or authorise payments?
- What skills, experience and/or qualifications will the employee need to have?
- How many hours a week will it take do the job?
- Is the job ongoing or do you only need someone for a set amount of time?
- Will the worker be an employee or a contractor?
Answering these questions will help you to work out what you are looking for in a worker and the type of employment you should offer. This will make it easier to recruit for the right person.
In addition, you will be able to identify the classification of the job and type of employment you need (i.e. ongoing or short-time; full-time, part-time or casual).
If you think you need a contract rather than an employee, you can check using the ATO’s employee/contractor decision tool. A simple check could save you time and money in the long run.
Pay and conditions
Modern Awards set the minimum wages and conditions for different industries and jobs in Australia. Where there is no Modern Award, the National Employment Standards apply. Modern Awards cover things like pay, hours of work, rosters, breaks, allowances, penalty rates and overtime.
With 123 Modern Awards it can be difficult to work out the correct award and classification. The Fair Work Ombudsman’s Pay and Conditions Tool makes this easier by stepping you through simple questions about your industry sector and the role and responsibilities of the employee. Based on your answers, the tool will identify the award, classification, pay, entitlements and allowances that apply.
If you are still unsure, you can contact the Fair Work Ombudsman’s Small Business Helpline on 13 13 94 (option 3).
Find the right person
Once you have a clear idea of the position you want to fill, the next step is to find the right person. This means making sure that suitable applicants hear about the opportunity, find the job appealing and match it with their expectations, skills and experience.
When preparing your job ad, list the skills and experience you are looking for and remember to let the applicant know what’s in it for them by including information about the location, salary and benefits of the job.
Where you advertise will depend on your industry and the type of job. Some suggestions include: online, in a newspaper or industry association publication, social media, notice boards or through a recruitment agency.
Depending on the number of applications you get, it might help to create a shortlist of people to interview. The interview process can be as formal or informal as you like. Ensure questions which focus on the skills and abilities which are relevant to the position.
Check out the Fair Work Ombudsman’s online learning course about hiring employees for practical information about interviewing skills.
Make an offer
Once you have chosen someone, contact them to offer them the job. It’s a good idea to follow this up in writing with a letter of offer.
This will help your new employee understand their conditions of employment. There are template letters of offer available on the Fair Work Ombudsman website.
It’s a good idea to also include:
- a copy of the Fair Work Ombudsman Information Statement
- copies of any relevant company policies such as a code of conduct, uniform or social media policies
- any forms you need completed such as a tax file declaration and superannuation choice.
Workplace Health and Safety
As a business owner you have a legal responsibility to make sure your workplace is safe for employees, customers and the public. Knowing and understanding your workplace health and safety requirements is critical.
You have a responsibility to provide a workplace that meets the physical and mental workplace health and safety requirements in your state or territory. For example, providing information and supervision, having an emergency plan, identifying and addressing potential issues, and having a return to work program.
Workers’ Compensation Insurance
If you have employees you need to maintain workers’ compensation insurance in the state or territory that employee is based in.
Each state and territory has a government agency responsible for workplace health and safety and workers’ compensation. Contact details are available on the business.gov.au website.
Tax and super
There are tax and superannuation requirements you must comply with when you have employees.
Employees & Tax
When you hire a new employee you must register them with the ATO and withhold payments for income tax purposes.
If you provide fringe benefits to your employees you will need to register and pay fringe benefits tax.
Employees & Super
Superannuation is money you set aside on behalf of your workers to provide for their retirement. You are required by law to make minimum super payments for all eligible workers.
Use the Superannuation guarantee eligibility decision tool to work out if you need to make a super contribution for a worker.
The Small Business Superannuation Clearing House is a free online service that helps small businesses to meet their superannuation requirements. Employers can pay super to all employees in one single electronic payment to the Clearing House, which then distributes the payments to employees.
Help and Information from Fair Work
- Fair Work Ombudsman Online Library
- Small business online information
- Hiring employees free online short course via the Online Learning Centre
- Small business guide to hiring new employees
- Small business helpline: 13 13 94 (option 3)
- Pay and Conditions Tool
- List of state contacts for workers compensation and workplace health and safety
Help and information from the ATO