Brexit and Employment – Key Things Employers Need to Know

With the first key date of 31st December 2020 approaching and the UK government now having issued its guidance on employing EU citizens post Brexit, now is the time to ensure that plans are in place if you wish to continue employing EU citizens, whether they be working for you already or potential hires in the future. This blog provides a timely reminder of what EU citizens need to be doing now if they wish to remain in the UK after 30th June 2021; what checks need to be done when hiring new employees from the EU after the 31st December 2020 and the important changes that come into effect on 1st January 2021 if you wish to employ an EU citizen under the revised Home Office’s points based system if they are not already residing in the UK at 31st December 2020. This article summarises the key points. We would recommend you read our HR Made Simple Guidance for Executives in our download section. Additional downloads are also available to provide practical guidance to managers HR Made Simple Guidance for Managers as well as a handy Employment Factsheet which can be shared with EU citizens currently working for you to remind them what they need to do.

Employment changes for EU workers and employers

  • Under the EU Settlement Scheme, EU citizens residing in the UK by 31st December 2020 can apply for status to continue residing in the UK after 30th June 2021.
  • EU citizens should have lodged their application to remain in the UK by 30th June 2021.
  • Under the EU Settlement Scheme, where the EU citizen has been a resident in the UK for five years (as at 31st December 2020), they will normally be allowed to stay indefinitely by being granted “Settled Status”, also referred to as “indefinite leave to remain”.
  • EU citizens who at the 31st December 2020 are already living in the UK but have not been resident in the UK for five years at 31st December 2020 will be eligible for “Pre-Settled Status”, also referred to as “limited leave to remain” enabling them to stay in the UK until they have resided in the UK for five years at which point they can apply for “Settled Status”.
  • Subject to identity and criminal record checks, EU citizens who have been granted pre-settled status will be given five years pre-settled status but will be eligible to apply for settled status on completion of five years continuous residence in the UK.
  • EU and EFTA citizens as well as family members of EU and EFTA citizens who are not themselves EU and EFTA citizens need to apply for settled or pre-settled status
  • To obtain settled or pre-settled status, the EU citizen will need to…
    • Prove their identity (normally using their passport)
    • Complete a short online application
    • Confirm their residency in the UK by providing their National Insurance Number (or alternative prescribed documents)
    • Declare any criminal convictions
  • An EU citizen who is entering the UK on or after 1st January 2021 will need to be sponsored by their employer under the UK’s points-based system. The current points-based system (for employing non-EU nationals) has been adapted and a summary of the key changes is provided in the HR Made Simple Guidance for Executives.
  • For UK employers wishing to employ EU citizens who have not been resident in the UK prior to 31st December 2020, employers will need to have gained Home Office approval to hold a sponsorship licence, paid the relevant fees and will be subject to the existing stringent audits by the UKVI to maintain their sponsorship licence.

What do employers need to action now?

To prepare for the changes we suggest the following steps are taken…
  • If you are considering employing EU citizens direct from the EU, from 1st January 2021
    • Where possible, ensure that any new EU citizen employed by you is resident in the UK before 31st December 2020
    • Decide whether it will be strategically necessary for your organisation to apply for a Sponsorship Management Licence and to have it in place prior to 31st December 2020, if the roles you are likely to need to resource meet the minimum requirements (in particular salary and skill levels). Consider the financial as well as operational impacts.
    • Obtaining a Sponsorship Management Licence requires in depth information to be provided and can take four to six weeks to obtain. This is likely to become extended if a large number of employers submit applications.
  • If you wish to ensure existing EU citizens working for you who are already residing in the UK have the right to work after 30th June 2021…
    • Continue to communicate with existing EU citizens about the need to apply for pre settled or settled status. Whilst the deadline to apply is 30th June 2021, EU citizens are strongly advised to submit their applications as soon as possible.
    • Employers must not require EU citizens to prove they have obtained either settled status or pre-settled status
  • If you wish to continue to employ EU citizens who are already residing in the UK but working elsewhere, from 1st January 2021…
    • Employers are advised by the Home Office to continue to undertake from 1st January 2021 the existing right to work checks until 30th June 2021.
    • Whilst employers will from 1st July 2021 need to ask applicants for roles if they have settled status or pre-settled status (or be prepared to sponsor them if they do not), the current advice is that they must not carry out retrospective checks on existing employees. This therefore raises a question whether employers will be required to check (leading up to the 30th June 2021) if applicants arrived in the UK before or after 31st December 2020. We await formal guidance on this point, but our understanding from the Home Office is that where an EU citizen starts work before 30th June 2021, employers will not be fined, providing the current right to work checks are completed by the employer.
Whilst we await further guidance on this point, our advice, where an employer knowingly employs someone who arrived in the UK from 1st January 2021 and does not have the right to work under the points scheme or under the EU Settlement Scheme, employers should not offer employment. For further information, download our free guides from our Knowledge Hub.

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