The impact of Brexit on your workforce. Seven practical steps to help you prepare for upcoming changes to immigration rules
As the Brexit transition period ended on 11pm 31st December 2020, it is now more important than ever to consider the potential impact of Brexit on your workforce. There are key immigration changes which have come into place, and in this article we set out some practical steps you can take now to manage the needs of existing and future European Economic Area (EEA)* nationals employed in your work force post-Brexit.
The current situation
At present, EEA nationals and their family members living in the UK are required to apply for pre-settled or settled status, via the EU settlement scheme. This scheme is mandatory for those EEA nationals who wish to continue living in the UK past 30th June 2021, even if they hold a permanent right to work visa, or have a permanent residence document.
Pre-settled status is valid for 5 years. After this time, EEA nationals will then have to apply for settled status. With settled status, they will have the right to live and work in the UK indefinitely, unless absent for a continuous period of 5 years.
Applications under the settlement scheme can be made from overseas, although pre-settled applicants must have returned to the UK before the transition period ended on 31 December 2020.
Employing EEA nationals after the transition period
Significantly, from 1 January 2021, all overseas employees (whether EEA nationals or not) are now treated the same for the purposes of working in the UK.
There will be two main routes for EEA nationals to work for your UK business, either as skilled workers or as intra-company transfers. These routes are explained below. For both routes, the employer must have a sponsor licence. Once a business is a licenced organisation to sponsor workers, it can issue certificates of sponsorship. The Home Office is encouraging employers to apply now for their sponsor licence even if they are not certain that the business will necessarily need it. The sponsor licence is valid for 4 years and the application process takes between 8-12 weeks. The licence itself is relatively inexpensive, however the sponsorship certificates are costly, at upwards of £5,000 each.
Route 1: Skilled worker (the new Tier 2 scheme)
EEA nationals will now need to secure work permission, although the reduction in salary and skill thresholds open up possibilities to those non EEA nationals who may not have been eligible to work in the UK before.
Individuals will need:
- A job offer.
- To demonstrate they can speak English.
- A salary of over £25,600 in most cases (previously £30,000). It may be lower for applicants with relevant PhD qualifications and those with shortage occupancy roles. Around 40 new roles being added to the current shortage occupation list, including roles in manufacturing, construction, care provision and nursing.
Route 2: Intra-company transfers
There are few changes for intra-company transfers, as both the current salary threshold and graduate skill level are being retained. The EU-UK Trade & Cooperation Agreement (Free Trade Agreement) supports intra-company transfers, including for spouses and dependents.
There are also new categories for start-ups and innovators. These operate in a similar way to the sponsorship route, whereby individuals and their businesses have to seek endorsement from a suitable body, before they can qualify for the visa. This has replaced the old tier 1 entrepreneur route.
A new global talent route is also being introduced, replacing the previous exceptional talent route.
There will be a further three key routes available , although the specifics have not yet been finalised. These are:
- A post-study work visa giving overseas students graduating in the UK (at degree level and above) two years post-graduation to live and work in the UK.
- A route for seasonal workers.
- A highly skilled unsponsored route. This will be a points based system similar to the Australian system.
Short term business trips
The Free Trade Agreement provides for visa-free travel for short term business trips, permitted for 90 days in any 180 period. The Free Trade agreement provides a definitive list of activities permissible under the short term business visitor category, such as attending conferences, seminars and meetings. These temporary mobility rights afforded by the recent Free Trade Agreement may only be beneficial where businesses require employees to be temporarily based in the UK for a short period of time. Where an employee is required to work in the UK for longer, or fulfil a UK based role, a visa under the UK immigration system may be a better but more costly option.
Seven practical steps to prepare your business
- Check if your business has any plans to recruit EEA nationals in 2021. In most cases, you will need to sponsor EEA nationals under the new skilled worker route and require a sponsor licence to do so. Ensure you ask EEA nationals when they first arrived in the UK to see whether this was before or after 31 December 2020.
- Inform and support your existing EEA nationals to apply under the EU settlement scheme where appropriate. Encourage your workforce to apply under the scheme before 30 June 2021. Make a note in May/June 2021 to check that everyone who needs to has applied by the deadline.
- Review your workflow planning and recruitment needs. Determine if there will be a need to sponsor individuals and the cost of this to the business. Consider how else the business could fill these roles if the business cannot afford, or is unwilling to pay the £5,000 per individual.
- Identify if your business has roles currently filled by low skilled EEA workers who may not meet the new Tier 2 sponsorship threshold. The effects of this could be mitigated by looking into incentives to attract local workers to fill these potential vacancies.
- Train your HR staff and managers to understand their obligations under the new immigration rules, such as the new online work checks.
- Update your business’s documents such as your offer letters, contracts and policies.
- Finally, consider your UK nationals working abroad. Each EEA country will have its own rules, so you will need to work with any HR staff and managers working outside of the UK to ensure they comply with the local immigration requirements as and when these are confirmed.
*We use the term EEA for short, but this includes Swiss nationals as they have the same rights as EEA nationals (EEA being the 27 EU member states plus Iceland, Liechtenstein and Norway).
If you would like any further information on this topic or any aspect of Employment Law, please contact Rhona Darbyshire.