An employer’s Brexit checklist: preparing for the end of the UK’s transition period
With the Brexit transition period ending in a matter of weeks and a new immigration system in place, HR teams will face significant changes ahead. Most critically, at 11pm on 31 December 2020 free movement for European nationals will end.
How will the end of free movement impact employers?
Depending on when they first arrived in the UK, there will be different immigration rules for European nationals. Therefore, HR teams will need to know when the person first came to the UK.
European nationals (and family members) who first entered the UK before 11pm on 31 December 2020 (and in some cases, those who have previously spent time in the UK and are currently overseas) will need to apply under the EU Settlement scheme (‘the Scheme’) to continue living and working in the UK long-term. It is an online application process with no application fee and has a deadline of 30 June 2021.
Importantly, only certain individuals are exempt from having to make an application – including those with indefinite leave to remain/enter or Irish nationals. Employers should therefore note that individuals holding a permanent residence document must still apply under the Scheme.
Failure to apply under the Scheme by the deadline will likely mean that the individual will no longer have the right to live and work in the UK after 30 June 2021. UK employers are also likely to be committing a criminal offence if they continue employing them in the UK. It is therefore critical that HR professionals take a proactive approach to this, or they risk key members of staff being left without the right to work in the UK.
Settled status
Individuals who have been resident in the UK for a 5-year continuous period should be eligible for settled status (i.e. permanent residency) under the Scheme. Continuous residence means that the individual has been in the UK for at least 6 months in any 12-month period over the 5 years. If the employee has spent more than 6 months out of the UK in any 12-month period, this will usually break continuity of residence and mean that they are not eligible for settled status.
Pre-settled status
Where the individual has been resident in the UK for less than a 5-year continuous period, they should be granted pre-settled status. This is granted for 5 years and it appears that it cannot be extended. As such, it is critical that, once they are granted pre-settled status, individuals safeguard their ability to apply for settled status by being present in the UK for at least 6 months in any 12-month period.
If their absences from the UK mean that they are not able to apply for settled status after 5 years, they will either need to leave the UK or apply to stay in the UK under a different immigration category (such as sponsorship).
HR teams must also ensure that they monitor their employees who obtain pre-settled status, so that any overseas secondments or regular business travel does not break continuity of residence and mean that those employees are unable to apply for settled status.
For European nationals (and family members) who first enter the UK after 11pm on 31 December 2020, there will no longer be any UK immigration advantage to holding a European passport. They will be treated in the same way as non-EEA nationals and will not be able to apply under the Scheme.
In most cases, employers will need to sponsor European nationals under the new Skilled Worker route and will need a sponsor licence to do so. However, it is only possible to sponsor individuals in medium-skilled or highly-skilled roles, so organisations currently reliant on a low-skilled European workforce (e.g. retail, hospitality, etc.) will not be able to sponsor individuals in the majority of these roles.
Even where the skill threshold is met, employers need to be aware that sponsorship involves significant costs for the employer (immigration fees alone can reach £9,500 to sponsor one individual for 5 years); and there are long lead-in times (often weeks or months from starting the visa process). The employer must also be conscious of the onerous compliance obligations they will have to take on thereafter.
Brexit Checklist
So what key actions should employers consider now?
- Do you know who in your organisation needs to make an application under the Scheme? If not, carry out an audit as soon as possible;
- Encourage your European workforce to apply under the Scheme before 30 June 2021 – the gov.uk website has an employer toolkit to assist with this;
- Consider how much support the business wants to provide to employees affected – e.g. immigration workshops, briefing notes;
- Diarise to undertake right to work checks on all employees in May/June 2021 and record any pre-settled expiry dates to diarise for further right to work checks;
- Take care when offering international secondments, allowing remote working overseas or regular business travel for employees holding pre-settled status. If they spend too long outside the UK, they may find themselves having to leave the UK after 5 years;
- If the business does not yet hold a sponsor licence, consider applying for one now as this will be needed to sponsor European or non-European nationals from January 2021. Before doing so, the business should take advice on the sponsor obligations and HR processes that need to be in place;
- Organisations that already hold a sponsor licence should ensure they are compliant with their sponsor obligations so they are prepared for any Home Office visit. Sponsors licences can be revoked for non-compliance. You may wish to consider an immigration audit;
- HR teams should review their current recruitment models – especially if they rely on low-skilled European workers and consider future recruitment budgets to factor in significant costs to sponsor European and non-European nationals;
- Review offer letters and employment contracts for all employees, which should state that employment is conditional on the person having the right to work and the employee providing satisfactory evidence of that right to work; and
- Consider how to handle European nationals who are resident overseas but who need to work in the UK on ad hoc basis. In some cases, they may qualify for the new Frontier Worker Permit.
Jackie Penlington is a Managing Associate at Stevens & Bolton LLP. She deals with a wide range of UK immigration and nationality matters from advising multinational corporates on their sponsor compliance duties to assisting individuals with their British nationality application.
Jackie is experienced in relation to business immigration, especially sponsor licence applications and Tier 2 sponsorship and assists clients with more complex sponsorship issues, including where there is a change of ownership to the business.
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