After a tortuous path, Brexit was finally implemented when the United Kingdom left the European Union on January 31, 2020. As the transition period commenced, the COVID-19 pandemic and resulting economic uncertainty took everyone by surprise and dominated business leaders’ attention throughout 2020.
But with the Brexit transition period ending on December 31, 2020, it’s time to look carefully at the post-Brexit impact on U.K. businesses that employ EU citizens.
The rules differ for those residing in the U.K. prior to December 31, 2020, and those seeking to do so after January 1, 2021.
EU citizens currently living and working in the U.K.
If your U.K. organization currently employs EU nationals, the good news is that little will change. However, those EU citizens wishing to stay post-Brexit still need to apply for ”settled status” in order to maintain their employment and living arrangements in the U.K. after January 1, 2021.
Settled status grants EU nationals and their families the same working rights as British citizens, and to be eligible, they must have been a U.K. resident for five years. EU nationals in the U.K. who don’t have five years of continuous residence can apply for “pre-settled status,” which will allow them to remain until they reach the requirement for settled status.
U.K. businesses currently employing EU nationals have until June 30, 2021, to apply for settled or pre-settled status, even if the employees have previously shown evidence of their right to live and work in the U.K. Citizens of other EEA countries (Iceland, Norway, Liechtenstein) as well as Swiss nationals, can apply to be considered under the settlement scheme.
Employment of EU nationals in the U.K. in 2021 and beyond
Because of Brexit, the free movement rights enjoyed by EU nationals in the U.K. ends on January 1, 2021.
Effectively, EU citizens entering the U.K. in 2021 will face the same visa application process and fees as non-European migrants have. The U.K. government has put in place a points-based system to gain permission to work in the U.K. under two categories:
- A skilled worker visa for people with a job offer
- A highly skilled work visa for people without a job offer, potentially allowing for self-employment
Once applicants meet the basic criteria of a job offer from an approved sponsor, as well as English language ability, there is a range of “tradeable” criteria to achieve the required score of 70 points to be eligible for a U.K. visa. These include:
- Salary level (higher salary levels receive more points)
- Jobs in a “shortage” category
- Higher levels of education (such as a doctorate degree)
The bottom line? If you want to hire EU nationals to work in the U.K. in 2021, there will be a lot more paperwork, time and cost.
Alternative options for employing EU citizens post-Brexit
Some employers in the U.K. might consider alternative approaches to hiring while they come to terms with the Brexit requirements. The COVID-19 pandemic proved the remote work model successful for many employers around the world, so hiring remote independent contractors or even full-time employees from the EU could be an option to meet companies’ talent needs.
Of course, hiring and maintaining employment compliance for remote workers from Europe—whether they’re contractors or full-time employees—brings its own set of challenges if a company is based in the U.K.
But it is possible to overcome these challenges with help from an employment partner in the European countries where employees and potential employees are from. A global employer of record, sometimes called an international PEO, can legally hire EU citizens—in their home countries—on behalf of a U.K. company.
The employer of record takes care of all HR, payroll and tax withholding requirements in the EU country—and assumes responsibility for compliance—while the U.K. company manages the employees’ day-to-day work and benefits from their contributions and expertise. Because the U.K. company is not the legal employer, it is freed from risk of employment noncompliance—either in the European countries or with Brexit.
So, can EU citizens work in the U.K. after Brexit? The answer is yes—with complex stipulations. Perhaps the better question for U.K. employers is: How can we continue to employ valuable talent—not only from the EU but around the world—without the hurdles of post-Brexit requirements? The answer to that question is with a global employer of record.
Learn more about how an employer of record like Global Employment Outsourcing (GEO) can help U.K. employers continue to benefit from EU and global talent despite new Brexit requirements. Speak to a global solutions advisor today.