The impact of Brexit on Employment in 2021

The impact of Brexit on Employment in 2021

It may have crept up on some of us, for others it may seems like you have heard little else but as of 1st January 2021, the United Kingdom was no longer part of the EU for the first time in most of our working lives!

This means there are changes to legislation around the retention of European workers in your organisation currently as well as the employment of them in the future. You will also need to consider what impact it may have on your business travel overseas or those coming to you.

We were fortunate to spend some time on a webinar hosted by Shoosmiths and their experts in immigration. We recommend you always seek expert legal advice on the detail when considering the impact on your business, but I hope the following article captures some of the headlines which were discussed and may give you some food for thought.

The UK Technology sector has always been a magnet for highly skilled tech professionals from abroad. Although the majority are non-EU, for a large chunk of the UK technology industry the loss of the current freedom of movement/work between EU countries is going to impede business at worst and cause inconvenience to others at best. For this reason, taking time understand the potential impact to your business needs to be on the board agenda now.

The good news is that although the 1st of January may have passed it is not too late to act and put correct processes in place if required.

A few key considerations are as follows.

Current European Workers

If you have individuals currently within your organisation who are categorised as European workers they have until the 1st June to obtain settled/pre-settled status allowing them to work compliantly going forward. In the case of workers who hold settled/pre settled status you as a business are not required to sponsor them either currently or going forward. Before the 1st June the business cannot ask for evidence of right to work from workers however you could be held liable if you are found to employ individuals without correct permissions.

It is advised that you communicate a message to your workforce that is positive that you want to retain them but encourage them to apply for settled or pre settled status before the 1st of June if they have not already. The application process is straight forward if they have worked here already but maybe more complicated if they have been students previously or occasionally worked in country.

Employment of New Entrants post 1st January

If as a business you wish to employ new entrants to the UK from the EU then you will be required to sponsor them as with non-EU workers currently. This means that your organisation must hold a sponsorship licence. Where previously the licence would enable companies to employ graduate level entrance to the market, a change to policy means this licence will now enable them to sponsor people from A level and above. Obtaining the licence is paperwork heavy and we would advise seeking legal support in the application process which may take between 4-6 weeks to receive from the Home Office.

Implications of holding a Sponsorship Licence

Organisations wishing to hold a licence need to recognise that there is an associated cost and reporting requirement which will impact even at a line manager level.

To begin with, to ensure compliance an individual should be appointed who has ownership of requesting and validating necessary documentation. The volume of work is very much dependent on the number of individuals within your organisation to which it applies. There is also an immigration skills charge of £1000 (depending on size of organisation) for each year which you sponsor an individual and this is a cost which you will incur on a per sponsorship basis. Information found at this link should prove a useful starting point to obtain sponsorship status.

Current holders of sponsorship licences

Even if you are already a holder of a licence it would be advised that firstly you check that European countries are detailed on this as previously it was not required. Whereas previously it would be simple for your organisation to employ individuals from overseas entities you will now need to ensure they also receive sponsorship and the countries where it is likely they will arrive from should be listed on your licence.

We have been advised that the licences may encounter heavier scrutiny so therefore it is an appropriate time to carry out an MOT on those you already have, ensuring evidence of documentation is in place if an audit is conducted.

Impact on Business Travel

Most of the impact on business travel will be minor inconveniences however they are worth considering. Due to the existence of a closed border between the UK and Europe it is realistic to expect more attention than previously. This cannot be removed entirely however it could be eased by issuing comfort letters to traveling European workers which state that you do employ them as this may be useful to remove or reduce hassle when returning to the UK in the future.

Anyone visiting your business from the 1st of January from Europe will need to make sure they are protected from breaching the new rules. As an example, they can attend board meetings and trade fairs but if they are seen to do any direct work within the business it will be considered a breach to active working regulation and in turn immigration policy if they do not hold sponsorship. It may be sensible to as a minimum ensure the global workforce is educated on this but also depending on volume also potentially consider placing it as a responsibility with a member of staff within your UK office.

Understand the changes to wider immigration rules and visa’s

With the arrival of Brexit The UK government has arguably made changes to the visa model which will open not only the access to talent in the EU but also the wider global market where so much technology expertise exists. It is advised that you seek to understand what changes have been made to ensure you are best placed to take advantage of them.

In conclusions the message to the European workforce should be that of a positive one as action now can ensure they feel you are motivated to retain them and significantly reduce impact on the business going forward. Most changes you encounter will be straight forward if you are proactive in your approach and seek expert legal advice where required.

Picture of Jon Martin
Jon Martin
Having spent most of his working life in the world of technology recruitment, Jon is passionate about building a company and sector which adds real value to the people and companies it supports.
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