The UK-EU trade deal. What does this mean for SME employers?

Three changes to employment law that you need to know.

1 January 2021 marked the end of the free movement of people, goods and services between the UK and the European Union.  If you currently employ or seek to employ EU nationals, we want to help you understand the new rules.  In this guide, you’ll find practical help on how to prepare for the changes.

1. Employees must check and apply for the EU settlement scheme before 30 June 2021.

The EU settlement scheme is designed to offer EU, EEA and Swiss citizens (and their families) the opportunity to protect their residence and access public services in the UK. 

Employees from the EU, EEA, and Switzerland must apply to the settlement scheme by 30 June 2021 to continue living and working in the UK.  Passports and National Insurance cards will be acceptable evidence of an EU citizen’s right to work until 30 June 2021. 

The settlement scheme applies to any EU, EEA and Swiss citizen that was a resident in the UK by 31 December 2020.  However, the Government has confirmed that individuals with ‘indefinite leave to remain’ or Irish citizens do not need to apply, although they can if they want.

Successful applicants of the scheme will get one of the following statuses:

  1. Settled status. This will be given to those who have lived continuously in the UK for five years.  It allows the employee to remain in the UK indefinitely.
  2. Pre-settled status. This will be given to those who have not yet lived in the UK continuously for five years. These people can apply for settled status once they have lived in the UK for five years in a row.

Important actions for you:

  • Speak to your employees who are EU citizens about applying to protect their residency.
  • Remind them that they need to apply before 30 June 2021 if they want to continue to live, work or study in the UK.
  • Let your employees know that they can get support with their application here:

Gov.uk - Apply to the EU Settlement Scheme

  • Do not provide immigration advice to your employees, unless of course you are qualified to do so.
  • Do not discriminate against employees that are EU citizens. Do not check if they have applied for to the scheme or make decisions based on whether they’ve applied.

More information can be found here: 

Gov.uk - EU Settlement Scheme guidance
Gov.uk - Employer toolkit page on GOV.UK

2. Employers will need a sponsor licence to hire people from outside the UK.

Starting January 2021, employers will need a license to employ workers from the EU, EEA and Switzerland.  You don’t need to be a sponsor to employ:

  • EU citizens with settled status.
  • EU citizens with pre-settled status.
  • Individual with indefinite leave to remain in the UK.

It’s important for you to note that sponsoring someone does not guarantee that they’ll be allowed to stay in the UK.

There are several other routes to employing EU nationals.  These are based on their activities.

  • The global talent route is designed to attract recognised global leaders and promising individuals in science, humanities, engineering, the arts and digital technology. It allows highly skilled EU and non-EU citizens to enter the UK without a job offer if they meet the points threshold and have been recommended by any of the following:

The Royal Society of Medicine
The Royal Academy of Engineering
The British Academy
UK Research and Innovation
Tech Nation
Arts Council England

  • The graduate route provides eligible international students with a graduate visa. It allows them to stay in the UK and work for two years (three years for PhD students) after they’ve completed their studies.
  • Intra-company transfers permit key employees of multinational businesses to move to the UK temporarily, subject to the eligibility criteria being met.
  • The health and care visa supports individuals in eligible occupations to work within the NHS, or an organisation providing a service to the NHS.
  • The creative route allows eligible individuals to complete short-term (up to 12 months) engagements in the UK.
  • Sporting routes allow international sports professionals to enter the UK if they have a confirmed job offer from a licensed employer and have been endorsed by the relevant governing body.
  • The youth mobility scheme allows young people from eight countries to work in the UK for up to two years.
  • There’s also a pilot seasonal workers route for agricultural roles. However, a decision has not been made as to whether this will continue into 2021.

More information can be found here:

Gov.uk - Applying for a settled status
Gov.uk - Covid-19 Right to work checks

Please note we’re not able to advise you further on applying to become a sponsor and you should direct any questions to the Home Office.

3. There’s no preferential treatment for EU citizens - a new points-based immigration system.

From 1 January 2021, a new points-based immigration system is being implemented.  It applies to anyone planning to come to the UK to work - except for Irish citizens. 

The aim of this system is to treat EU and non-EU citizens equally by reducing the overall levels of migration and prioritising highly skilled employees.  Those wanting to come into the UK to work, they will need to apply in advance for permission.  If they meet the specific criteria outlined below, points will be given, and a visa will be awarded.  

Applicant criteria:

  • They must have an offer of a job from a licensed sponsor.
  • They must speak English to an acceptable standard.
  • The job must be at or above the minimum skill level. That’s RQF3 level or equivalent (A level or equivalent qualification).
  • The job offer must have a salary of either £25,600 per year or the ‘going rate’ for the occupation, whichever is higher. A lower paid job offer may still be accepted if the salary is at least £20,480 per year and the job is in a ‘specific shortage occupation’ or the applicant has a PhD relevant to the role.

Applicants need to collect 70 points. Meeting these criteria will give them 50 points and they will need to get another 20 points through tradeable points.

This system does not apply to EU citizens that have been living in the UK by 31 December 2020.

Important actions for you:

  • Do you have a sponsor licence? If yes, check it’s valid. If not, you need to apply now.
  • If you want to recruit from outside of the UK, you’ll need to amend your recruitment policies to reflect this new system.
  • If you’re applying for a sponsor license you can expect a visit from a UK visa and immigration officer. They’ll check there’s a genuine need for a licence and make sure the correct systems are in place to manage sponsored workers.
  • You will be required to pay the immigration skills charge for every skilled migrant worker employed through the skilled worker and intra-company transfer routes. Currently, this is £1,000 per skilled worker for the first 12 months, then £500 for each six-month period afterwards.  Discounted rates may be available for some businesses.
  • Have a plan in place for the possibility of not being able to recruit EU candidates if your sponsor application is rejected.

If you’d like more information about what this could mean for you and your finances, we have a wide range of information detailing what might change and how it could affect you.  Let us help you prepare for the new rules.

Information available in this downloadable guide from HR expert AdviserPlus

Please note that this document is based on published information available at the time and this may be subject to change when further guidance is released by the Government.

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