What will Brexit mean for recruiting and hiring in 2021?

The UK left the EU on 31 January 2020 and is now operating under a transition period in accordance with the Withdrawal Agreement, which remains in place through the end of the year. During the transition period, many pre-Brexit frameworks have remained, providing continuity between the UK and EU while new agreements are negotiated.

In addition to resolving cross-border issues, Brexit requires significant clean-up of the UK statutes book. Despite there being much to iron out before 1 January 2021, a lot of work has been done, including by the Parliament. In 2019, 580 separate pieces of legislation – known as statutory instruments in the UK – were issued regarding Brexit. Thus far in 2020, the count stands at 267 and is likely to accelerate as the cutover date nears.

A year ago, many employers may have planned to spend the final months of 2020 managing the impacts of Brexit on their organisations, as well as typical planning for the next calendar and tax year. But now COVID-19 is top of mind for employers as well. With so much happening at once, including temporary COVID-19 measures, it can be a challenge for organisations to keep up and prioritise their to-do lists. In this blog, we highlight what employers should be aware of throughout the transition period and beyond, specifically related to the following topics:

• Recruiting, hiring, and retaining EU citizens as employees
• Rights and entitlements of UK employees or those working within the UK
• Deduction from Earnings Orders

Recruiting and retaining your workforce

Many UK employers have benefited from the EU law on the free movement of EU citizens by being able to recruit and retain workers from throughout the EU. Throughout the transition period, this free movement regime has remained in place. For persons who have relocated to the UK for work prior to the cutover date, they may apply to remain in the UK beyond 1 January 2021. This means that EU citizens may take advantage of the existing rules and apply for work in the UK throughout the end of the year.

In addition, if an EU citizen arrives before the end of the transition period, they will be allowed to remain for at least six months, during which they may continue to look for work. Significantly, a new immigration regime will come into force from 1 January 2021, which will make it more difficult for EU citizens to relocate to the UK for work but may provide easier access for other individuals who have certain skills or degrees, such as medical workers.

It is important to note that EU citizens are given some protection under the Withdrawal Agreement if they are working for a British employer at the end of the transition period. They will still need to obtain a new residence status and there will be an optional pathway for settlement. But such persons are considered as having a "cross-border link" that continues for as long as they are in the UK working for a British employer, which provides them certain protections in the event their employment relationship ends, or they seek new employment in the UK.

Employers and individuals will need to familiarise themselves with the new points-based immigration system that will come into force on 1 January 2021. This new system will not apply to EEA or Swiss citizens that are already employed and living in the UK on or before 31 December 2020 – these individuals and their families have until 30 June 2021 to apply under the EU Settlement Scheme.

Further, Irish citizens will maintain their right to work in the UK and will not need to utilise the new points-based system. The Immigration Bill, which still needs to be enacted, will bring the new system into effect for all the of UK. The government believes that this new system will be fairer and better serve the interests of the UK. The scheme includes different routes or paths available for persons based on their education or skill/occupation. There are also options for international students. More than one path may be available to an individual, in which case they select just one. The new regime intentionally favors the most highly skilled workers and students but treats all non-UK persons equally.

What employers should be aware of

More details and guidance are expected about the new system in the lead-up to the new year. But that should not stop an employer from familiarising themselves with the details that have already been published because they will act as sponsors for individuals who are coming to work in the UK through the new system. Employers who plan on sponsoring many individuals should consider becoming an 'A-rated' sponsor, which will simplify the process (however, there are requirements the employer would need to meet and maintain). Employers should review the government's detailed guidance, in particular Annex E, which sets for the eligible occupations and wage requirements for the Skilled Worker route. This is a common feature in many immigration systems across the globe – employers who wish to employ a non-resident worker must pay a prevailing wage. Employers will want to carefully review the minimum wages and take them into account not only when deciding to extend a job offer, but throughout the course of that person’s employment. Employers should also note that the government sets the rates based on data it receives through the Annual Survey of Hours and Earnings report. This means that the minimum rates may be adjusted annually, as new data becomes available.

Employers with offices throughout the EU may want to note that the new system includes a route for intra-company transfers and graduate trainees to accommodate temporary moves for key personnel. This will help maintain some of the agility that exists under the current scheme for UK and EU employers to quickly relocate personnel when needed.

While there are EU-centric issues that require attention as the result of Brexit, employers should be aware that parliament is not necessarily limiting itself to just those issues. Brexit may continue to serve as a catalyst to make other relevant changes. Indeed, this has happened with respect to immigration. As part of the new system, there will be a Hong Kong Visa route available for British National Overseas citizens that provides a clear path to British citizenship.

While many employers will need to understand the new immigration system, they will need to be mindful of what they can share with applicants and employees. Employers need to be aware of that they are prohibited from providing immigration advice on a case-by-case basis to individuals. However, employers may disseminate general information and direct individuals to pertinent government resources. In addition, employers may encourage relevant workers to apply to remain in the UK but should not be inquiring about a person’s status until 30 June 2021 or the Home Office issues guidance permitting employers to do so earlier. Employers should use the remaining days before the new year to review their internal policies about communicating immigration-related information and may need to provide training to relevant personnel.

Importantly, just as is the case today, employers will still need to perform right to work checks under the new immigration system. There is still some uncertainty about what employers will need to do from 1 January 2021 to 30 June 2021, primarily for individuals who are already working in the UK. However, what we do know is that employers are currently following temporary COVID-19 rules. Then, starting on 1 January 2021, the new immigration system comes into force, which will apply to new hires or entrants.

Employers will be granted access to an online service that will simplify the process for non-UK persons and employers. The system will have real-time data and will eliminate the need to check physical documents. Employers will also enjoy the convenience of performing these checks remotely, such as during a video call. However, employers should note that under the temporary COVID-19 rules, rechecks need to be performed at some point, which could be in 2021. This could mean that employers may be performing rechecks on some employees using different guidelines than they would for a new hire in 2021. Employers will want to continue to keep up to date with Home Office guidance, as it is expected there will be further details issued, which could come on a rolling basis.

As employers think about what they need to do to continue recruiting and hiring persons from outside the UK, employers should think about what this means for their internal and external recruiting strategies. In addition, employers will want to provide training to key staff and review their application forms and other pre-hire processes to see what, if any, changes need to made so that the organisation can not only meet its new obligations, but provide a positive and seamless experience for applicants and new hires. Employers may also want to develop an internal communication strategy reminding their workforce of the coming changes and deadlines to apply under the EU Settlement Scheme.