October 5th, 2018 | Sterling

Brexit, Immigration and Its Impact on the Global Workforce

In the first quarter of this year, 2.29 million EU nationals were working in the UK. They continue to be an essential pool of talent for UK employers.  Meanwhile, many hiring organisations are turning to workers outside of the UK as they look to expand global reach with in-region expertise. Last week, Natasha Catterson of Fragomen LLP and Lucy Evans from Sterling led a timely discussion about this very topic in the very timely webinar, “Background Check Compliance: Brexit, Immigration and the Global Workforce.”

Immigration Rules and Hiring Compliance

Based on the webinar attendee poll, 84% of employers claim to have foreign nationals amongst their workforce, with almost 46% suggesting that they make up between 1% and 24% of their workforce. It’s clear that foreign nationals are continuing to make up a huge part of our workforce, but what do employers need to know when it comes to immigration rules?

Currently, the Immigration Program is set in tiers as a points-based system:

  • Tier 1: High-value migrants
  • Tier 2: Skilled migrants
  • Tier 3: low-skilled migrants (currently suspended)
  • Tier 4: Students
  • Tier 5: Temporary Workers and Cultural pundits

However, there are also alternatives to the points system which include:

  • EEA Nationals: (pre-Brexit)
  • Settled Status: Indefinite leave to remain (ILR)
  • Family Permit: Residence Card-Family member of EEA National
  • Spouse of British Citizen: N.B. Minimum salary/savings thresholds apply
  • Ancestry Visa: Work Visa for Commonwealth citizen who had a grandparent born in the UK

  Brexit: Where are We Now?

This past week brought about post-Brexit immigration recommendations from Teresa May based on a recently released independent report. According to the Financial Times, Prime Minister May will seek cabinet approval to approve a restrictive post-Brexit immigration regime calling for “sharp checks on low-skilled workers seeking to migrate into Britain in the future.” There will be more discussion on this policy as it goes through the cabinet.

Until the process is decided, nothing will have changed, but it’s worth noting that the UK and EU have provisionally agreed to a “reasonable deal” for Europeans living in the UK. People can continue to make applications under EU law for a registration certificate or a permanent residence card. They can also apply for British citizenship if they already have permanent residence and have held that for at least 12 months.

What is going to happen when Brexit Takes Place?

On 29 March 2019, the UK is set to officially leave the EU.  A Brexit transition period will run until 31 December 2020, during which time EU nationals will retain free movement rights in the UK. EU nationals living here before the end of the transition period will need to make an application for status to the Home Office, who has promised this will be online and straightforward. If an EU national has lived in the UK for five years, they could apply for a settled status. New arrivals to the UK would apply for a pre-settled status. The Home Office says it will look to grant applications and only serious criminals should expect to be refused. Last week’s webinar covered additional details, including specific information for those from Ireland, Switzerland and EEA nationals.

There is some worry for foreign-nationals who work in overseas assignments that they might lose their entitlement to settled status in the UK. People can take assignments without missing out on settled status, but only in certain circumstances. Settled status is available where people have five years of continuous residence in the UK. Continuous residence generally means that they have not been absent from the UK for more than six months in total in any 12-month period (there is no restriction on the number of absences permitted). Settled status is only lost where the holder spends over five years overseas without stepping foot in the UK. The Home Office is focusing on continuous residence, which means being physically present in the UK for at least 6 months in each of the last 5 years, except for one period of up to 12 months for an important reason (for example, childbirth, serious illness, study, vocational training or an overseas work posting). The plan is that applications can only be made from the UK, but the Home Office is considering the scope for overseas applications under the scheme and more information will be provided in due course.

Also, a person can be denied a permit to stay in the UK based on their past criminal record. According to the Home Office, only serious or persistent criminality will affect an application, one the might include a jail term or a record with multiple offences.

What Happens After the Brexit Transition Period Ends?

Since the final immigration laws post-Brexit are still being negotiated, it is still too early to say what will exactly happen after the Brexit transition period ends. There are still discussions in process for continued EU visa-free travel, business visitors and intracompany transfers. For EU nationals, the UK government has asked an independent committee to review the UK labour market after the Brexit transition ends on 31 December 2020. The UK government has set out some preliminary points in the interim, but it is likely to be some time before we know how exactly how things will work. For Non-EU nationals, changes will depend on the relationship and whether they are related before 31 December 2020. Close family members (spouses, civil and unmarried partners, children, grandchildren and dependent parents and grandparents) should be able to join the EU national. If they are not related, then they will be subject to UK law, which means they must meet certain strict requirements (e.g., earnings of £18,600 or over). However, Children born or legally adopted after 31 December 2020 will also be protected.

What happens if there is no Brexit deal? There are three deal options currently on the table:

  • Chequers Deal: Foreign-nationals will continue to have free movement until 1 January 2021
  • Hard Brexit Deal: The free movement for foreign-nationals ends 30 March 2019, but those living here can stay. The points-based system and other rules will apply to EEA and Swiss Nationals.
  • Very Hard Brexit Deal: The free movement for foreign-nationals ends 30 March 2019. EEA and Swiss nationals living here cannot stay and those entering need to apply under the points-based system and other rules.

What is a Right to Work Check and Your Obligations

All employers regardless of whether they hold a Sponsor Licence or not, are expected to carry out prescribed document checks on all employees before they start work. This is known as the Right to Work Check.

In our Background Checks 2018: UK Trends & Best Practices Report, we found that 88% of businesses regard right to work checks as important. This may seem a high percentage, but it’s a legal obligation to carry out these checks and could be considered alarming that it’s not 100%! It’s also worth noting that if hiring firms fail to follow those obligations they can be fined up to £20,000 for each illegal worker found in their employment. The check is required to be completed BEFORE employment.  Any follow-up check will be required for employees with time-limited permission to work in the UK. If a company recruits workers via a staffing agency, it is the agency’s legal responsibility to make relevant checks on their employee’s right to work status, not the employer. Employing agencies must ensure that all the pre-employment screening is satisfactorily completed and that workers are legally entitled to work in the UK. Where possible, check current passport or travel documents which have not expired. However, if a person does not have one, then you can accept evidence of their right to work in the UK in an expired passport or travel document.

Provided that an employer has carried out the appropriate checks, it will have a statutory excuse against liability for a civil penalty if it later comes to light that any worker has been working illegally in the UK. In other words, by carrying out that Right to Work Check employers have that Statutory Excuse.

There are three simple steps for a statutory excuse:

  • Obtain the person’s original documents
  • Check the validity of the documents in the presence of the holder
  • Make and retain a clear Copy and record the date of the check

Global Screening

Based on our webinar poll results, there is a need for global screening. However, these types of background checks can be complicated, which may be putting some companies off performing background checks on a regular basis. Sterling’s specialist team has global reach but expert local knowledge, meaning we understand the variety of regional compliance obligations, the types of checks you can carry out and have the processes in place to get the best possible turnaround times.

To find out more about Brexit, immigration and the importance of global screening, you can download an OnDemand version of this very timely webinar.

This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We expressly disclaim any warranty or responsibility for damages arising out this information. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.