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Before You Do This · Employment & HR
Written terms, statutory deductions, record keeping and the difference between an employee and a contractor - settled before the first payday, not after a dispute.
The situation: You are about to bring someone onto the payroll
The first hire is the point at which a business stops being only a commercial arrangement and becomes an employer. A set of duties attaches on that day - about written terms, about deductions, about records - and almost none of them are easier to satisfy later.
Most first-hire disputes are not about the law being unclear. They are about nothing having been written down: what the job was, what the pay was, how notice worked, and whether the person was an employee at all.
What the law is doing in this situation, and which instrument it sits under. These are general explanations, not an assessment of your circumstances.
Employee or contractor is not a label you choose
The classification follows the substance of the relationship - control over how the work is done, integration into the business, who supplies the tools, whether the person can send a substitute, and whether they carry their own commercial risk. Calling someone a consultant in the paperwork does not settle the question if the arrangement functions as employment.
Labour Act, Cap L1 LFN 2004
Written terms protect the employer too
A written statement of terms is what an employer relies on when a dispute arrives: the role, the pay, the hours, the place of work, the notice period, and what happens on termination. Where terms are unwritten, the gap is generally filled by what the parties actually did and by the general law - not by what the employer intended.
Labour Act, Cap L1 LFN 2004
Payroll carries statutory deductions
Employers are expected to deduct and remit tax under the pay-as-you-earn system, and contributory pension and employee-compensation schemes apply to employers meeting the criteria set out in their governing Acts. These are obligations of the business, not of the employee, and they begin with the employment - not at year end.
Personal Income Tax Act · Pension Reform Act 2014 · Employee's Compensation Act 2010
Records are the evidence
Contracts, payslips, leave records, disciplinary notes and remittance receipts are what an employer produces when a claim is made. A business that cannot show what it paid, when, and under what terms is arguing from memory against a documented account.
You need a disciplinary process before you need one
A written disciplinary and grievance procedure, applied consistently, is what separates a defensible dismissal from a contested one. The time to write it is before the first performance problem, while nobody's conduct is in question.
These are ordinary and usually well-intentioned. That is exactly why they are worth naming.
None of these is proof of bad faith on its own. Two or three together is a reason to slow down.
Work through these before you commit. They are educational prompts, not a compliance certification.
When to speak to a lawyer