Employing family members and voluntary staff

Family employees - minimising business risks

Typical risks to a family business from employing family members can arise because non-family members may feel alienated or excluded. Other risks can occur because of:

• failure to recruit and retain experienced outsiders who could contribute effectively to the business' plans
• business strategy and implementation of necessary change being jeopardised if senior management does not possess the right skills and experience
• claims of discrimination against non-family members - see our guide on how to prevent discrimination and value diversity
• succession planning not being adequately managed if non-family members or interests are excluded or inappropriate family members or interests are automatically included
• costs - waste of resources on paying the wrong person and through unjustified promotions/pay rises
• ineffective communications between family members or if business communications are not separated from family matters
• bullying or harassment of other staff by family members

Prevent risks
Avoid alienating staff - look out for damaging situations including preferential treatment of a family member over promotion or pay - you could face an equal pay claim. Avoid having senior positions held only by family members and not applying the appraisal system to them. And remember that if you don't require family members to bring outside experience to your business, you cannot expect non-family members to do so.

Subjects covered in this guide

• Introduction
• Family employees - consider your motives
• Family employees - minimising business risks
• Preventing communication breakdowns
• Employing your spouse
• Employing younger family members or volunteers
• Voluntary staff - points to consider
• Voluntary staff - contract rights, benefits and allowances
• Health and safety issues
• Tax reporting requirements - young, old or voluntary staff
• Here's how our business overcame the pitfalls of employing family members