By Ben Chernoff, a Director at Davis Grant
As the UK enters a new era entirely outside of the EU and the free movement agreement, recruiters need to be aware of the impact that this may have on their operations and finances.
The UK’s departure from the EU means that certain aspects of employment and immigration law have changed, which has had an immediate impact on the industry, especially when it comes to retaining and recruiting employees from the EU and EEA (European Economic Area).
Before the end of the free movement agreement on 1 January 2021, citizens from the EU, Iceland, Liechtenstein and Norway (EEA countries) could live and work in the UK without a visa or work permit.
Now that the Brexit transition period has ended, EU, EEA and Swiss citizens arriving in the UK will need to gain permission to work in the UK by following the new visa regulations, which applies to all overseas citizens intending to work in the UK.
Employers and recruitment agencies have a legal duty to prevent illegal working and they could face fines if they fail to ensure the person being hired has the legal right to work in the UK.
Impact on existing EU citizens
EU citizens who are currently working for you need to take action to gain permission to remain in the UK. This is done via the EU Settlement Scheme, which gives EU workers the right to continue living and working in the UK indefinitely.
Employees have until 30 June 2021 to apply and they must have been resident in the UK by 31 December 2020 to be eligible. Anyone arriving after 1 January 2021 is not eligible and will need to rely on the new visa arrangements.
A person is eligible for settled status if they have lived in the UK for a continuous five-year period or intend to do so. Five years’ continuous residence means that for five years in a row they have been in the UK, the Channel Islands or the Isle of Man for at least six months in any 12-month period.
If they do not have five years’ continuous residence at the time that an application is made, they will usually be granted pre-settled status. However, they must have started living in the UK by 31 December 2020 to acquire this and intend to stay in the UK for a further five years.
They can then apply to change this to settled status once they have completed five years’ continuous residence.
Some EU citizens may be able to stay in the UK without applying – for example, Irish citizens or those with indefinite leave to remain. Applications for the Scheme are made on the GOV.UK website by clicking here.
Applicants need to provide a valid passport or valid national identity card, and a digital photograph of their face. However, in certain situations, alternative evidence may be acceptable.
Proof of identity will be requested again when individuals apply to change their status from ‘pre-settled’ to ‘settled’.
Individuals can also provide their national insurance number for an automated check of their residence based on tax and certain benefit records. Where they are successful no additional documentation will be required.
New EU or overseas workers
If you intend to recruit new EU citizens you will need to apply for permission and obtain the necessary visas by becoming a visa sponsor.
To become a Home Office licensed sponsor, you must apply online and do the following:
- Check that your business is eligible;
- Choose the type of licence you wish to apply for, which will depend on what type of work you want to sponsor;
- Decide who will manage the sponsorship within the business; and
- Pay a fee.
You will be given a licence rating and be able to issue certificates of sponsorship if you have jobs that are suitable for sponsorship.
This will remain valid for four years as long as you check that your foreign workers have the necessary skills, qualifications or professional accreditations to do their job and keep copies of documents showing this.
You must only assign certificates of sponsorship to workers when the job is suitable for sponsorship and tell the UK Visas and Immigration (UKVI) service if your sponsored workers are not complying with the conditions of their visa.
Workers can rely on several different visa routes, but most commonly they will have to use the new points-based skilled worker visa.
To recruit workers from outside of the UK via this visa, employers and visa applicants will need to demonstrate that:
- They speak English at the required level;
- They have a job offer from a Home Office licensed sponsor;
- The job offer is at the required skill level of RQF3 or above (equivalent to A level); and
- They’ll be paid at least £25,600 or the ‘going rate’ for the job offer, whichever is higher.
If the job pays less than £25,600 (but no less than £20,480), the applicant may still be able to apply for permission by ‘trading’ points on specific characteristics against their salary. The visa rules are not straightforward and it is strongly advised that you seek professional advice.
Right to Work Fines
Agencies should be aware that they face a fine (civil penalty) of up to £20,000 for every worker who does not have permission to carry out the work in the UK.
With this being the case, employers and recruiters must conduct a ‘right to work’ checks in accordance with the Home Office process.
Under this process, employers and agencies are recommended to only offer employment on the condition that the candidate successfully passes the right to work checks.
You will be deemed to have committed a criminal offence if you employ an individual and you have ‘reasonable cause to believe’ they do not have the right to work in the UK.
If you are unsure of whether a person has the right to work in the UK you can use the Home Office right to work checking service by clicking here.
Impact on recruiters’ finances
The recruitment sector already faces many tough challenges in 2021, as they deal with the requirements of IR35 and the difficulties of the COVID-19 pandemic.
The new work and visa requirements that come as a result of the end of the free movement agreement with the EU will be particularly challenging for certain sectors that are reliant on overseas workers, such as care, agriculture, construction, IT and many other skilled fields.
For years many of these sectors have relied on skilled and hard-working EU citizens to fill gaps in the UK labour market.
The new rules add complexity to the hiring of new workers, including a significant bureaucratic burden, which may create new administrative costs.
However, a decline in the available workforce may also lead to higher wages for the most in-demand positions, which may push up the amount of money that recruiters make from new contracts.
Recruiters need to carefully assess the situation and see what costs they will need to absorb and what new opportunities they can take advantage of.
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