What is an employer?

Understanding what an employer is and the responsibilities that come with the role is important for anyone managing people, either remotely or in the office. Knowing where you stand and understanding some of your obligations can help you create a fair, compliant and productive workplace.

Who is an employer?

An employer is an individual or organisation that hires and pays people for their labour. They may be a sole trader with a small team or a large company with hundreds of employees.

The employer definition typically includes anyone who has the authority to recruit staff, set expectations and manage working relationships within a business.

In any employment relationship, the employer sets the terms of work and issues an employment contract according to their workplace policies. This includes defining where, when and how the employee will work, as well as outlining pay, duties and regulations.

In return, employees become part of the workforce and receive wages and other agreed compensation in line with the organisation’s policies and legal requirements.

What does the term ‘employer’ mean?

The concept comes from the idea of engaging one or more people to perform a job. It covers the full range of responsibilities involved in employing people, from offering work and paying staff to maintaining a safe, supportive and legally compliant working environment.

An employment contract usually states the relationship between the employer and their staff members and the necessary provisions for the start, duration and end of the period the employer employs their staff.

What does an employer do?

An employer shapes how their organisation operates, including establishing the company culture. They set communication standards, create workplace policies and develop reporting structures and management systems to ensure work is carried out effectively and consistently.

Types of employers

This section outlines the types of employers and how they are classified. There are different types but only two ways of classifying the type of employer you are. These include using the structure of your company and its size. Depending on your organisation’s structure, you could fall under any of the following categories of employers:

Public

This includes services funded by the state and some of the UK’s biggest employers, which are typically part of the government or government-funded organisations. Examples are the National Healthcare Service (NHS), the police and the civil service.

Private

This includes companies owned by individual citizens or collective groups ranging from huge corporations to small restaurants and shops.

Third sector or not-for-profit

This includes organisations established for humanitarian purposes, which are sometimes exempted from paying tax.

Types of companies

The size of a company can impact the number of jobs available as well as the overall workplace environment, influencing both employment opportunities and company culture.

Large organisations

Large organisations typically have over 250 employees and a formal structure that involves training and induction programmes. Employees in these companies enjoy higher starting salaries and perks such as company cars.

Their size often necessitates the use of complex, formalised human resources (HR) systems and specialised departments to manage their vast workforce. The HR department generally hires staff and looks after making monthly payments.

Small and medium enterprises (SMEs)

SMEs typically have between 10 and 250 employees and often operate with leaner structures than larger organisations. Because of this, they may not always have fully developed training, onboarding or HR programmes in place, relying instead on informal processes and close working relationships to manage day-to-day operations.

Employees in SMEs may also earn lower salaries compared to those in large organisations, although they often benefit from broader roles, greater flexibility and closer access to senior leadership.

Microbusinesses

Microbusinesses are organisations with fewer than 10 employees and often have tightly knit teams working closely together. Employers in these settings frequently work alongside their staff in the office, shop, restaurant or other business environment, sharing day-to-day responsibilities.

Because of their size, microbusinesses tend to have informal structures, with employees handling varied tasks and employers making decisions quickly. This often creates a collaborative atmosphere where communication is direct and roles can be highly adaptable.

Obligations of employers at the workplace

Employers are responsible for fulfilling their obligations, regardless of the type of employer they are or the business culture they adopt. Employer obligations are often defined by workplace regulations and rules that have to be followed to ensure compliance.

The following are some of the many obligations of employers:

Providing work tools

As an employer, you provide your employees with the necessary tools to accomplish their tasks. In some cases, employers may also provide accommodations such as a private room for live-in employees. This can include computers and software, sufficient workspace and specialised equipment, among others.

Paying salaries and benefits

It’s an employer’s duty to pay their employees the payments they’ve agreed on, especially if they report working and accomplish their responsibilities every day. Employee earnings are subject to income tax according to relevant legislation and it is important to ensure proper tax treatment of all payments.

Employers also need to facilitate sick leave and paid holidays to allow them to report back with more vigour to accomplish their tasks.

Ensuring workplace safety

Employers provide and maintain a safe working environment that poses no risk to their employees’ health. This includes ensuring that any equipment or chemicals they use are safe, as well as offering adequate facilities such as washrooms and first aid kits.

Sufficient training and proper supervision are also important so employees can carry out their work safely and confidently.

A safe workplace also means preventing external sources of risk and protecting employees from discrimination, bullying and harassment. Clear policies, fair procedures and a positive culture all play a role in maintaining a secure and supportive environment for everyone.

If you have lone workers in your business, it is worth conducting a lone worker risk assessment.

Remaining professional

Treating employees with respect and professionalism allows you to offer a great example of how they should conduct themselves. This includes respecting their non-work hours, communicating courteously and creating a workplace environment that fosters equality.

Mentoring employees

An employer trains their entry-level staff members and mentors them to help advance their professional goals. You can ensure that other workers understand how to assist recruits or invest in training resources.

Reporting and documenting incidents

This includes instances such as when there has been a case of discrimination or harassment. Standardised forms are often used to document incidents and ensure compliance with reporting requirements.

Remember to resolve the incident quickly and inform the relevant authorities of the matter.

Being honest

Employers remain honest as they discuss various issues relevant to their team. For example, you can give them details of how tax deductions work on their pay stubs. Also discuss their performance openly to help them discover the areas they can improve on and increase their chances of professional success.

Choosing leaders

Select appropriate supervisors and department managers who can capably oversee other team members. When such workers are competent, knowledgeable, ethical and fair people they can greatly contribute to your business’s success.