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2021: Brexit and the UK's New Immigration System

Posted on 11 June 2020

The UK's immigration system for workers is set to change from January 2021 to try to ease workforce shortages set to be caused by the UK's departure from the EU. While EU nationals and their family members who arrive in the UK before the end of the Brexit transitional period of 31 December 2020 may continue to enter the UK without a visa, EU nationals arriving in the UK to live and work from 1 January 2021 will require a visa to do so. 

EU nationals living the UK before 31 December 2020

EU nationals and their family members already living in the UK before 31 December 2020 must make applications under the EU Settlement Scheme by 30 June 2021, otherwise they will be illegally in the UK, regardless of the length of time they have been in the country. 

EU nationals and their family members in the UK before 31 December 2020 must make applications to the Home Office for either Pre-Settled Status or Settled Status:

  1. Pre-Settled Status – This is for those who have been in the UK for less than five years.  The Home Office will grant them Pre-Settled Status for a period of five years and they must apply for Settled status once they have been in the UK for five years or, in any event, before their Pre-Settled Status expires; or
  2. Settled Status – This is for those who have been in the UK for at least five years and is the equivalent of permanent residency. After holding Settled Status for one year, applicants may be eligible to apply for British citizenship if they meet the qualifying criteria for such an application.

EU nationals arriving in the UK from 1 January 2021

EU nationals and their family members arriving in the UK from 1 January 2021 will require a visa under the UK's immigration rules. 

Currently, to obtain a "work permit visa" – known technically as a Tier 2 (General) visa - non-EU nationals must be sponsored by a company which has been granted a Tier 2 Sponsor Licence by the Home Office and the role they undertake must be degree level and meet the minimum salary requirements. The sponsoring employer must also demonstrate that the role could not be filled by a worker from the UK's resident labour market who would not require a visa to work in the UK, by advertising the role for 28 days in a process known as the Resident Labour Market Test.

If a work-sponsored visa is required, EU nationals will need to apply for and be granted a Tier 2 (General) visa prior to arriving in the UK, in the same way that non-EU nationals must do now. 

The Home Office's policy paper detailing the main features of the new system indicates there will be a lowering of the current general minimum salary threshold from the current £30,000 per annum to £25,600 per annum.  It will be possible to earn less than the minimum required salary in limited exceptions if the worker will be filing a shortage occupation role or is undertaking a PhD level role. Additionally, the skill level of roles which can be undertaken by Tier 2 (General) visa holders will be lowered from degree level to A-level, and the time-consuming Resident Labour Market Test will no longer be required. 

The Home Office will also re-introduce the Post-Study Work visa which will allow graduates from UK universities who have held student visas – knowns as Tier 4 (General) visas – to live and work in the UK for a period of two years after the completion of their studies.

What do employers need to do?

The Government has stated that until 1 January 2021 employers will not need to differentiate between EU nationals who have entered the UK pre-Brexit or post-Brexit. 

However, it is important that employers are prepared for the January 2021 changes and the 30 June 2021 deadline, as anyone who does not hold the correct visa or Pre-Settled or Settled status may be illegally in the UK, exposing the employer to a potential fine for illegal working (currently of up to £20,000 per illegal worker) and potentially a criminal prosecution as well.

To strengthen their position in the post-Brexit immigration landscape, employers should consider the following:

Protect your business' position

Employers should conduct a full audit of their workers in the UK to identify employees who will need to obtain Pre-Settled or Settled Status under the EU Settlement Scheme between now and 30 June 2021.

Although employers cannot demand that their EU workforce make applications under the EU Settlement Scheme, employers can communicate the requirement to obtain the necessary status to their workforce and monitor when applications are being submitted.

Employers should ensure obtain evidence of any EU national worker's Pre-Settled or Settled Status once granted and that copies are taken to keep on the worker's HR file as evidence of their right to work in the UK. 

We recommend that employers keep a spreadsheet of who has obtained the correct documents and who has not.  In this way, should any employee fail to obtain the necessary paperwork, those who require a visa will be already known and the company will be well-placed to take immediate action to minimise any risk of illegal working.

If the business does not have a Tier 2 sponsor licence yet, consider applying for one

To work in the UK, employees may require sponsorship by employers as per the current UK immigration system for non-EU nationals. 

Due to the number of companies that will require a licence between now and 1 January 2021, the processing time for applications submitted to the Home Office may become protracted, leading to inevitable recruitment delays. As such, companies who do not currently have a Tier 2 Sponsor Licence should apply for one as soon as possible to ensure it is in place for the start of the new immigration system. 

What if the business already has a sponsor licence?

Businesses which already have a Tier 2 sponsor licence should consider their skilled labour needs in the medium-term. It may be that they need to apply for an increased certificate of sponsorship allowance to bring in foreign skilled labour.  It is only likely to get more difficult in the future as the system gets more congested, so acting early may save difficulties later.


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