Brexit: new rules for UK firms which employ EU citizens

9 min read  |   14 December, 2020   By Nick Hardy

An image of the EU flag waving in the sky.

Following Brexit, employment law is changing. We explore the implications for UK businesses.

A recent poll carried out by EY canvassed the views of 1,700 businesses – both UK and international headquartered – to gauge how they believe they will be impacted by Brexit and the extent to which they have put plans in place to mitigate the risks of trading in a post-Brexit world.

Just one in five said they have a good understanding of the risks of not being prepared and have mitigations in place. However, the implications for businesses who employ EU citizens are potentially serious with the risk of fines if they are found to be employing people illegally.

It’s essential that business owners who already employ EU citizens or are planning to do so following the end of the transition period are aware of their responsibilities and the new legislation announced by the Home office in their Statement of Changes to the Immigration Rules.

Brexit and employment law

Increased recruitment and employee retention costs 

Rules for existing employees from the EU

Employing new EU citizens – the points system explained 

Level of English requirements 

Health and care visas 

Managing employee information 

Webinar invitation

Brexit and employment law

The end of the Brexit transition period and the introduction of restrictions to the free movement for European national in the UK takes place at 11 PM on the 31st December 2020. From the 1st January 2021, there will be a new points-based immigration system. EU citizens arriving in the UK from 1 January will need to comply with the same visa requirements as other non-UK citizens.

The government has advised that in many cases, UK employers will need to sponsor European citizens and this means many businesses will be required to apply for a sponsor license. Given the high number of businesses which rely on EU citizens, the government is recommending that applications for licenses are submitted as soon as possible.

There will be no provision for low-skilled workers.  Employers which rely heavily on lower-skilled European workers are likely to struggle to fill roles from 2021 onwards.

Increased recruitment and employee retention costs

The new rules also include the introduction of a points-based system which will see job applications from EU citizens being treated the same was as those from the rest of the world.

The new rules are likely to have an impact on businesses’ recruitment overheads as it costs thousands of pounds to sponsor an individual for five years. At a time when so many small businesses are struggling and under pressure to reduce overheads, these additional costs are a particularly unwelcome burden.

And the cost of ignoring the new rules is even higher.

There will be civil penalties of up to £20,000 for employers who do not follow the correct procedures and fail to carry out the correct right to work checks where it is later discovered that an individual is working in the UK illegally.

Rules for existing employees from the EU

There are strict new rules about who can stay in the UK after Brexit.

Employers who already employ EU citizens should encourage them to apply for settled or pre-settled status, if they have not already done so.

European citizens already in the UK before the end of the transition period have a grace period until 30th June 2021 to apply under the settlement scheme.

There are also different schemes for some workers - for example, there is the Global Talent, Innovator and Start-Up visa. The government says this is designed to attract "those who have an exceptional talent or show exceptional promise in the fields of engineering, science, tech or culture".

The Home Office have created an EU Settlement Scheme toolkit to help employers support EU citizens apply to stay in the UK. This includes various resources, including:

  • Introduction
  • Template letters to EU citizen staff
  • Factsheets, leaflets and posters
  • Social media graphics and videos
  • Presentations
  • Translated materials

Employing new EU citizens – the points system explained

To qualify for a visa, migrant workers who want to move to the UK will have to qualify for 70 points.

Having a job offer from an approved employer for a skilled job will earn 40 points. Being able to speak English will give another 10 points.

The applicant can achieve the remaining 20 points if they are due to be paid at least £25,600 a year.

They can also gain extra points for having better qualifications (10 points for a relevant PhD, or 20 points for a PhD in science, technology, engineering or maths) or an offer of a job in which the UK has a shortage (20 points), even if it doesn't pay as much money.

Certain jobs in health or education still merit 20 points even if the salary is less than £25,600. The applicant must be paid at least £20,480, and in line with set amounts for particular jobs in the UK's four nations.

Level of English requirements

Applicants from EU countries must prove they can read, write, speak and understand English to at least level B1 on the Common European Framework of Reference for Languages (CEFR) scale.

Eu citizens can can prove their knowledge of English by:

  • passing a Secure English Language Test (SELT) from an approved provider
  • having a GCSE, A level, Scottish National Qualification level 4 or 5, Scottish Higher or Advanced Higher in English
  • having a degree-level academic qualification that was taught in English – if they studied abroad, they will need to apply for confirmation through UK NARIC that their qualification is equivalent to a UK bachelor’s degree, master’s degree or PhD

Health and care visas

The government has introduced a fast-track entry system for doctors, nurses and other healthcare professionals. Those who are eligible for this type of work visa will be supported through the applications process and pay reduced fees.

Applicants for these visas will still need to demonstrate that they have the requisite skill levels of and meet salary threshold requirements.

Again, all applicants from EU companies are required to prove their proficiency in written and spoken English.

Managing employee information

There is little doubt that the administrative burden of supporting existing employees from EU countries or employing new people from the region will increase.

With the onus on employers to prove the eligibility of their employees to settle in the UK, it’s important that they maintain an accurate audit trail of all communications and also take extra care to keep on top of paperwork.

Using a dedicated HR management software system like Breathe means you can maintain detailed employee records and also store all related documents electronically. Should you face a challenge from the Home Office, its vital that you can provide them with the information they need to audit your employment policies and ensure you have followed all procedures correctly.

Breath includes dedicated document management functionality which enables HR administrators to store all people related records centrally within a single online repository. This makes it easy to maintain and access documents which can help facilitate recruitment processes and procedures as well as help support compliancy with the new post-Brexit rules.

We also provide an applicant tracking system (ATS) as an add-on to our HR management software.

Webinar invitation

On 4th February 2021 (at 2:00 PM), we are co-hosting a webinar with Jemma Fairclough-Haynes, CEO, Orchard Employment law.

Our CEO, Jonathan Richards and Jemma will be exploring the legislative changes brought about by Brexit and discussing the steps that business owners need to take to ensure they are compliant with the new regulations.

They will cover:

- Work visa categories, including the new Skilled Worker visa
- Managing the tradeable points system
- Managing new and existing sponsor license applications
- Key compliance changes
- Recruitment in a post-Brexit UK

Please click here to register your place.

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Author: Nick Hardy

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