The legal take on recruitment post-Brexit

Jan 25, 2021

5 mins

The legal take on recruitment post-Brexit
Rose Costello


No one said it would be easy. Brexit was always intended to pull Britain out of the European Union and put up barriers to the free movement of people. After many years of discussion, the separation is underway. The trouble for recruiters is that in practice those barriers make life more complicated when looking to employ staff from the Continent. So what has changed? And how should these changes be handled?

British businesses have been feeling the effects of Brexit since 2016 when the referendum on leaving the EU was held. There’s even a word for it: Brexodus. As companies worried about the repercussions of Brexit, some sought to set up offices overseas. Paris, Amsterdam, and Dublin were all cited as the new London.

At the same time, uncertainty around the future meant that the numbers looking to move to the UK to work have been stagnant at best in recent years. This has been compounded by the Coronavirus effect. The government-funded Economic Statistics Centre of Excellence estimates that between the third quarter of 2019 and the same period in 2020, up to 1.3 million people who were born abroad left the UK. When the country opens up again, businesses will surely want to entice back some of those very same workers.

The new system: what has changed?

In preparation for leaving the trading bloc, Britain introduced the Immigration and Social Security Coordination (EU Withdrawal) Act 2020. The new rules here relate to the employment of citizens from the European Economic Area––which takes in the European Union, Norway, Liechtenstein, and Iceland––as well as Switzerland. One key modification is that the UK now operates a points-based immigration system that covers everyone, not just those from outside the EU.** The exception is Irish nationals who, thanks to the Common Travel Area, continue to be free to live or work in the UK, or just to visit without getting a visa.

The new rules are intended to simplify the process of recruiting from overseas but a lot of recruiters are unsure how to proceed, according to Thal Vasishta, the director of Paragon Law and a business immigration specialist based in Nottingham. “Many businesses have been left confused as to exactly what rights EU nationals arriving in the UK will have with regards to working here and the checks that they, as employers, need to carry out,” he said.

The process seems complicated and the rules will probably be modified over time, but for now the biggest change is the introduction of the “skilled worker” category and the increased level of paperwork.

What does this mean in practice?

If your company wants to recruit staff from overseas who do not already have the right to work in the UK, it will need to get a Skilled Worker sponsor license. If your business already holds a Tier 2 sponsor license, which is needed until this change to sponsor non-EU citizens, then it doesn’t need to do anything. This will automatically upgrade to the Skilled Worker sponsor license.

Staff who are already in the UK on a Tier 2 visa do not need to take action immediately either. They will be able to continue to work under this visa so long as it is in the same role and with the same employer. “Those who were already in the UK before December 31, 2020, will be able to continue to live and work in the UK,” he said, adding that to be allowed to do so they need to apply under the EU Settlement Scheme by June 30, 2021.

How can a business get a Skilled Worker sponsor license?

If it is time to get a Skilled Worker sponsor license, you need to apply online via the UK Visas and Immigration portal. Once you get online, the process takes about 30 minutes and the license is valid for four years. The Government advises choosing at least one person to take responsibility for the process. The website states: “You need to appoint people within your business to manage the sponsorship process when you apply for a license.”

That’s because, while it sounds simple, getting the paperwork in order before you make the application will take time. Within five working days of making an application online, you will need to provide documents to confirm the trading presence of the business. This can include, for example, registration with HM Revenue & Customs for VAT and National Insurance, Certificate of Liability Insurance, evidence of a UK bank account, annual accounts, and evidence of business premises such as a lease agreement.

So it’s worth taking it seriously. “Apply early, as it can take several months for the application to be approved,” said Vasishta. “Unless the business has internal know-how of the application process and requirements, seek professional help. If an application is refused there can be a cooling-off period of six months before it [the business] can apply again and so getting it right the first time is important.

Let the individual at your company who is taking charge of the process familiarize themselves with the duties and responsibilities involved. “Bring yourself up to speed with the relevant guidance and processes that should be in place, reporting and record-keeping obligations, before applying for a license,” said Vasishta. “The business may be subject to a pre-registration audit, the outcome of which will determine whether a license will be granted. It will also be subject to ongoing audits or investigation for non-compliance, which could result in the loss of the license.” This could cause problems for staff who have been sponsored by the business and make it difficult to recruit skilled workers in the future.

Why it’s not as bad as it looks

On the positive side, the new points-based system is more straightforward than previous ones. “The new Skilled Worker route is less onerous and has been simplified compared to its predecessor, the Tier 2 visa,” said Vasishta. The changes include:

  • The resident labor market test has been abolished. “This means that a business does not have to satisfy the Home Office that there are no suitable workers in the UK before being able to issue a certificate of sponsorship,” said Vasishta. However, businesses will still need to satisfy the Government that each role is genuine, meaning that evidence of how the person was recruited may need to be shown at a later date, such as during license dates.
  • There is no annual quota on the number of people who can enter the UK under a Skilled Worker visa.
  • The minimum skill level of jobs that can be sponsored has been reduced from graduate-level roles to A-level roles.
  • Minimum salary thresholds have also been reduced. For new entrants into the labor market, this has been dropped from £20,800 to £20,480, and for experienced workers from £30,000 to £25,600.
  • The cooling-off period has been abolished. “Previously, if someone had been in the UK on a Tier 2 visa, they were not allowed to enter the UK on another Tier 2 visa until after 12 months––the cooling-off period––had elapsed,” said Vasishta.
  • There is no maximum stay limit on a Skilled Worker visa. “As long as the sponsored worker meets the requirements, they can continue to extend their Skilled Worker visa indefinitely,” said Vasishta.
  • A Skilled Worker will be able to apply for settlement after five years provided that they satisfy the eligibility criteria.

Once a business has a Skilled Worker sponsor license, it can then recruit staff from overseas. The process of employing staff can be relatively speedy. It might take two to four weeks to bring a tech worker on board, for example, according to Vasishta.

Those potential employees also have to apply for a Skilled Worker visa. For that, the visa applicant will need to satisfy the Home Office that they meet the criteria.

Why preparation is everything

Given all the extra admin involved, it might be tempting to advertise a post and then hope to get the paperwork through on time, but Vasishta warns that there are consequences. “Employing illegal workers can result in civil penalties of up to £20,000 per worker and reputational loss for the business,” he said.

The best way to avoid this is to make sure that those involved in HR and recruitment are up to speed with the new immigration rules. “Decide which colleagues will take up the responsibility to manage the duties and reporting functions on the Skilled Worker license,” he said. “Ensure that they have access to good immigration law specialists as they build their know-how and become the immigration leads in the organization.”

Those initial hurdles may seem tiresome, but they will be worth it if you get the best person for the job.

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