Employing EU nationals in the approach to Brexit

A guide to employing EU nationals in the approach to Brexit

Brexit: Where are we up to?

The date of the UK’s withdrawal from the EU was previously set as 29 March 2019. However, the UK and the EU agreed to a postponement. Currently, the UK is scheduled to leave the EU on 31 October 2019.

If no deal is reached between the UK and the EU by 31 October 2019 then the UK will leave the EU without a deal on that date (a no-deal Brexit). However, there is also a possibility that the UK and EU could agree to a further extension to the Brexit date. Of course, the date of the UK’s exit from the EU, and indeed whether exit takes place at all, may still be impacted by other political developments, for example, a second referendum or general election.

The current position

Up until the UK leaves the EU, the principle of ‘free movement’ which allows EEA citizens and their dependants to live, work and study within any country in the EEA will remain in force. As a reminder, the EEA comprises all EU27 countries as well as Norway, Iceland and Liechtenstein. Swiss nationals have the same rights to live and work in the UK by virtue of Switzerland’s single market membership.

This means that, at the moment, you can continue to employ EEA and Swiss Nationals in the same way you did prior to the referendum. When you are conducting your standard ‘right to work’ checks, a valid EEA passport remains acceptable evidence of the right to work in the UK.

Remember that, while the current regime is still in force, it will be unlawful to refuse employment to an EEA passport holder because of Brexit uncertainty. Depending on the facts and circumstances of the case, this might be found to be race discrimination on the basis of the applicant’s nationality.

What happens next depends on whether or not a Brexit deal is agreed. If a deal is agreed, a transition period will apply until 31 December 2020 during which EEA nationals will still be able to exercise their ‘free movement’ rights. This will give employers more time to prepare for Brexit. However, if there is no deal, there will be no transition period. Free movement will end on the day the UK leaves the EU.

The EU Settlement Scheme

Following an initial pilot phase, the EU Settlement scheme has been fully open since 30 March 2019. Under the scheme, all EU nationals living in the UK must apply for ‘settled’ or ‘pre-settled’ status.

The UK has reached separate agreements with, Iceland, Norway, Liechtenstein and Switzerland which, in practice, mean that nationals of these countries can use the settlement scheme in the same way as nationals of the EU27 Member States.

Irish citizens, and individuals who already have indefinite leave to enter the UK or remain the UK, do not need to apply under the EU settlement scheme.

The Government has published a useful employer toolkit explaining the EU settlement scheme and including fact-sheets for employees.

Applications under the EU Settlement scheme are free of charge. Initially, a fee of £65 applied but this has since been waived by the Government with a promise that any fees already paid will be refunded. Applications are made online and it is currently estimated that a ‘straightforward’ application will take around 4 calendar days.

EEA nationals continuously living in the UK for a continuous period of 5 years at 31 December 2020 can apply for settled status with access to public funds and services. Settled status allows an EEA national to work in the UK indefinitely. You may also hear settled status referred to as “indefinite leave to remain under the EU settlement scheme”.

EEA nationals who arrived in the UK before 31 December 2020 but have not reached the 5 year residence mark by that date can apply for pre-settled status. An application can be made to convert pre-settled status to settled status at no cost once the individual has been resident in the UK for 5 years. An EEA National with pre-settled status is allowed to work in the UK and is entitled to stay in the UK for 5 years from the date pre-settled status is granted (regardless of whether they choose to go on and apply for settled status).

Applicants to the EU settlement scheme must:

  • Establish their identity by uploading appropriate documents.
  • Establish their eligibility by showing they have resided continuously in the UK. The online form will automatically draw information from HMRC and DWP databases, but the applicant may be required to fill any gaps.
  • Establish their suitability for settlement: Checks will be made to identify serious or persistent criminals. Minor offences will not be a barrier to settlement.

The deadline for applications for settled or pre-settled status is 30 June 2021 (provided that the UK leaves the EU with a deal and a transition period applies).

Family dependants who are living with or join EEA citizens before the UK’s exit will also be able to apply for settled status after 5 years in the UK. In these cases the cut-off date won’t apply.

It is not really clear what the position will be if EEA nationals fail to apply for the required settled or pre-settled status by the deadline. However, it appears that those individuals would be in the UK unlawfully. It would therefore be an offence for UK employers to continue to employ them.

Registration Certificates and Permanent residence cards

EEA Nationals who already hold a registration certificate or permanent residence document must still apply for settled or pre-settled status. While these documents are evidence of how long an EU national has lived and worked in the UK, they will not on their own be sufficient evidence of right to work in the UK after Brexit. These documents are not required to make an application under the EU settlement scheme but, for existing holders, they may potentially assist with the process.

Be aware that some employees may still wish to apply for a permanent residence document. This is because this document is essential for any application the individual may later wish to make for British Citizenship (i.e. to become a UK passport holder). Currently the processing time for a permanent residence document is around 6 months. Depending on how long the individual has lived in the UK, obtaining a permanent residence document may enable them to apply for British Citizenship straight away.

As an alternative, an individual might choose to apply for ‘settled status’ under the EU settlement scheme and then, if they wish, go on to make an application for British Citizenship 12 months after receiving it.

The advantage of British Citizenship is that it can never be lost, and can be automatically passed on to any children born outside the UK in future. However, EU nationals should be aware that applying for British Citizenship may affect their current citizenship and/or their tax position in the UK and should take appropriate advice before taking this step. Currently there is a fee of £1,330 to apply and a process time of around 6 months.

Time constraints may mean that, in any event, applying for British Citizenship is not a viable alternative to applying for settled status for many EU Nationals currently living in the UK.

What if Britain exits the EU with a deal?

If the UK leaves the EU with a deal on 31 October 2019, the EU Settlement Scheme will operate as above. The deadline for applying will be 30 June 2021.

Free movement will continue to apply until 31 December 2020 (the ‘transition period’).

EU nationals arriving in the UK after 31 December 2020 must apply for permission to remain in the UK after the UK leaves the EU under the new, yet to be confirmed, skills-based immigration system.

What if Britain exits the EU without a deal?

If the UK leaves the EU without a deal on 31 October 2019 there will be no transition period. Free movement will end on that date. 

EEA nationals must be living in the UK before exit day to apply for settled or pre-settled status under the EU Settlement Scheme. The deadline for applying will be 31 December 2020. The additional 6 month grace period to 30 June 2021 will not apply.

EEA nationals arriving in the UK after 31 October 2019, but before the new skills-based immigration system takes effect in on 1 January 2021, will need to apply for European Temporary Leave to Remain if they wish to stay in the UK for more than 3 months. The application will be online and must be made within 3 months of arriving in the UK. There will be a fee to apply but we do not yet know what that will be.

EEA nationals do not need to make an immigration status or visa application if they intend to stay in the UK for less than 3 months. It appears that this three month period is, in effect, a temporary extension to free movement and that EU nationals will be permitted to work during this period.

European Temporary Leave to Remain allows EEA Nationals to work in the UK. It is a temporary, non-extendable immigration status that enables an EEA national to remain in the UK for a period of 36 months from the date it is granted. If individuals wish to remain in the UK for more than 36 months will need to apply for an immigration status under the new skills-based immigration system when it comes into effect.

Irish citizens will not need to apply for European Temporary Leave to Remain.

UK Immigration Post-Brexit

The new immigration system that will apply from 1 January 2021 has not yet been finalised. However, the Government broadly outlined its proposals in December 2018 in a white paper. The white paper draws on the recommendations of the Migration Advisory Committee (MAC) and proposes to adopt most of the committee’s suggestions (see our September 2018 alert). The Government has promised to carry out “extensive engagement” with stakeholders over the next 12 months to finalise the new immigration rules.

Currently, the UK has a dual system” of immigration, generally admitting only highly skilled workers from outside the EU and workers of all skill levels from within the EU (under current ‘free movement’ rules). The new regime will be built around a single skills-based immigration route for intermediate to highly skilled workers from outside the UK (with no preferential treatment for EU citizens).

The necessary skills threshold for skilled migrants to enter the UK is currently very high (covering graduate and post-graduate level jobs only). However, under the new regime, this threshold will be lowered to include roles requiring intermediate skills (at A level or equivalent). The Government will consult on whether Tier 2 salary thresholds (currently £30,000 or £20,800 for new entrants) should be reduced given the extension of the skilled workers route to jobs requiring intermediate skill.   This will be important for many employers outside of London and the South East as this minimum salary threshold may significantly restrict the sorts of jobs which are eligible for sponsorship. The Government has also undertaken to review the ‘Shortage Occupation List’ (SOL) which sets out occupations where there is a proven skills shortage in the UK and for which these salary thresholds can be relaxed.

Workers entering under this route will need to be sponsored by an employer. This will mean that, to employ EEA nationals after Brexit, employers will require a sponsor licence (and will have to get to grips with the associated costs and compliance obligations). The Immigration Law Practitioners Association (ILPA) recently estimated the total cost of sponsoring a migrant worker for 5 years at £8,631. Together with high salary thresholds, this may mean sponsorship is not viable for some roles.

The white paper also proposes a "temporary, short term workers route" which will allow workers at all skills levels, including low skilled roles, to come to the UK for a maximum of 12 months (with a 'cooling-off' period of a further 12 months to prevent workers stringing together a number of short term stays and effectively working in the UK permanently). The white paper stresses that this will be a transitional arrangement only and will be kept under review (although, interestingly, the white paper does not close down the possibility of this route continuing or becoming permanent if successful). This route will only be open to applicants from specified, low-risk countries (likely to include EU countries) and employer sponsorship will not be required.

For more information on the immigration white paper, see our January 2019 alert.

Key employer actions

While uncertainty still prevails around Brexit it can feel difficult to plan. However, the following simple steps will help your organisation prepare for Brexit:

  • Remind and encourage EU nationals currently in your employment to apply for settled or pre-settled status
  • Consider how you will assist and support current EU staff with their applications (for example, providing information, training or access to legal advice)
  • Brief managers and recruitment teams on what we know so far about upcoming immigration changes.
  • Consider whether you need or want to apply for a sponsor license to employ EU nationals under the new skills-based immigration system

Mandy Higgins is a partner in the Employment, Pensions and Immigration Team at Weightmans LLP and is based in Liverpool. If you have any concerns or questions about the impact of Brexit on your organisation or require support with workforce planning please do not hesitate to contact Mandy at mandy.higgins@weightmans.com or speak to the Brexit team via the link below.

 

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