Employers face quandaries over taking on workers from EU

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Employers are accelerating recruitment plans to bring foreign hires into the UK by 31 December to avoid sponsorship fees and being entangled in confusing guidance, say immigration lawyers.

From 1 January 2021, free movement will end and the new immigration system will treat EU and non-nationals the same. EU nationals may need to be sponsored by an employer, which will need a sponsor licence. Small businesses pay £536, with the fee rising to up to £1,476 for medium and large businesses – prices that have been in place since 1 December.

EU nationals who arrive in the UK by 11pm on 31 December 31 then have six months in which to apply for residency under the EU settlement scheme, which does not cost anything.

Skilled worker route

The Home Office states that from 1 January 2021, anyone recruited from outside the UK for the skilled worker route will need to demonstrate that:

they have a job offer from a Home Office-licensed sponsor
they speak English at the required level
the job offer is at the required skill level of RQF3 or above (equivalent to A level)
they’ll be paid at least £25,600 or the ‘going rate’ for the job offer, whichever is higher.
if the job will pay less than this – but no less than £20,480 – the applicant may still be able to apply by ‘trading’ points on specific characteristics against their salary. For example, if they have a job offer in a shortage occupation or have a PhD relevant to the job.

According to immigration specialists at Bates Wells, there are fears that smaller businesses may be priced out of the new immigration system and could suffer from skills shortages as a consequence.

Some businesses may decide to pass on the cost of sponsorship to their employees. For those earning just over the threshold of the minimum earnings requirement, or people with families to support, this could put them under considerable financial stress or make it impossible for them to move to the UK.

Some of the sectors that have traditionally been most reliant on EU labour include hospitality and social care. These industries have been among the hardest hit by the coronavirus pandemic and could struggle to afford sponsorship costs.

Chetal Patel, partner at Bates Wells said: “Following Covid-related hiring freezes, businesses are now rushing against the clock to bring new hires into the UK ahead of the December 31 deadline.”

“All of this is compounded by the Covid-related problems over travel, such as quarantine restrictions and the understandable reluctance to move country during the crisis.”

“This has come at the worst possible time for the many businesses that have had to put recruitment on hold due to coronavirus. Businesses are under enormous pressure already and shouldn’t have to incur extra costs just to have access to skilled labour.”

In addition to the extra costs incurred with sponsorship, Bates Wells said that businesses that go down this route would need to be careful that they carried out due diligence, as they could face criminal charges if it transpired that they knew or had reasonable cause to believe that they were employing an illegal worker.

Patel said: “Businesses could potentially lose their licence to sponsor employees, or in the most serious cases, face criminal sanctions including a prison sentence of up to five years and/or an unlimited fine.”

“The net is cast wide for these criminal sanctions and it could extend to directors, managers, people in the recruitment team and secretaries.”

She said that employer were only realising now some of the implications of the new arrangements.

Among these, she said, was a quandary for employers arising from the Home Office insisting that employers “have a duty not to discriminate against EU, EEA or Swiss citizens. You cannot require them to show you their status under the EU settlement scheme until after 30 June 2021.”

From 1 January to 30 June employers can still accept European passports and e-cards but can’t directly ask whether they have status under the EU settlement scheme. So employing them without knowing their status means the employer risks losing them or even being prosecuted after 30 June if it transpired they did not have settled status.

Patel said: “Businesses shouldn’t have to judge the arrival dates of EU nationals so some may take a risk-based approach as to whether to go down the sponsorship route or simply rely on a European passport or national ID card as evidence of someone’s right to work in the UK until 30 June 2021, in the hope that they will have obtained status under the EU settlement scheme.”

Immigration lawyers argue that further guidance is needed to address the question of when employers can ask their EU staff about their status. This needs to happen soon, they say, because if it is only found on 1 July 2021 that the employee hasn’t applied for settled or pre-settled status before that date, they are likely to be working illegally and employers would have to act very quickly to investigate, dismiss them and avoid penalties.

People from EU countries working in the UK will usually get settled status if they’ve started living in the UK by 31 December 2020.