The impact of Brexit on the recruitment sector: visas, right-to-work checks and more - 17/12/2020

Free movement is ending, and it will have a significant impact on the recruitment sector.

Whether you operate a recruitment agency, an employment business or an umbrella company, you have limited time to prepare for the UK’s new immigration regime and ensure compliance with all of the new requirements.

The end of free movement – what does it mean?

For the past 40 years, EU nationals have benefitted from free movement under the terms of the EU Treaties.  Loosely speaking, this meant they were able to exercise Treaty Rights to come and live and work in the UK with virtually no restrictions.  EU nationals could take up any role with any business at any level and on any terms – whether on a fixed term, temporary or permanent basis, whether as an employee or agency worker. They did not need to apply for any special documentation or permission to do this.

When Britain exited the EU on 31 January 2020, the Government agreed a transition period during which these free movement rights would remain effective.  That period lasts until 31 December 2020. After that date, free movement will no longer apply.

Applying for Settled/Pre-Settled Status

Any EU nationals entering the UK during the transition period i.e. before 31 December 2020 (or those who are already resident here), are eligible to apply for a new visa, namely Settled or Pre-Settled Status.

Broadly speaking, once obtained, this status preserves many of the “free movement” rights currently enjoyed by EU nationals, including the right to work for any employer in any role, to be self-employed etc.

Nearly all EU nationals (apart from Irish nationals and those who already have Indefinite Leave to Remain) who wish to stay living and working in the UK after the end of this year must apply for this visa regardless of how long they have been here, whether they have obtained permanent residence or even if they have married a UK national.  The deadline for making these applications is 30 June 2021.

Importantly, Settled Status is not something which is obtained automatically; and individuals must apply for it. 

Any EU nationals who are in the UK and miss the application deadline of 30 June 2021 will have no legal right to remain or work here. 

Many recruiters and umbrella companies have a significant number of EU workers on their books. If those individuals have not applied for Settled/Pre-Settled Status by 30 June 2021 or obtained some other relevant visa, you will no longer be able to engage or supply those individuals. Equally, if you undertake permanent recruitment, any EU national candidates whom you introduce to clients will not be able to take up work with the client.

The new immigration regime – 1 January 2021

After free movement ends, the new immigration regime will apply to all non-UK nationals seeking entry to the UK after 1 January 2021 (except for those who already have permission to live and work here, for example those who already have, or have applied for, Settled Status).

The key route of entry will be the Skilled Worker route, which will apply to any non-UK national wanting to come to the UK to take up employment here. This route will apply to EU nationals (apart from the Irish) and non-EU nationals alike.

The Skilled Worker route

Information about the Skilled Worker route is contained in the article here. In short, applicants will need to score 70 points under several different criteria in order to be eligible to make a visa application under this route.

Applicants will need to score mandatory points for being offered a skilled role (which must be at RQF Level 3 or above).  This is essentially a role judged to be at or above A-Level standard. The employer is not able to decide which roles meet this standard; instead, the Government publishes lists of approved roles and their skill levels, and employers will need to determine where their roles fit within these lists.

Applicants will also need to demonstrate the required level of English language capability in order to score the mandatory points in this area.  Again, this is an entirely new criteria for EU travellers coming to work in the UK.

In all cases, the absolute minimum threshold salary for entry to the UK will be £20,480 per year, or at least 80% of the “going rate” for the role (whichever is higher). The “going rate” is defined by the Office for National Statistics and is published by the Government. It will not be possible for migrants to enter the UK under the Skilled Worker route where they will be earning less than this amount, no matter what other points they may earn in other categories. (This includes those working on a part time basis, as the salary floor cannot be prorated based on part time hours.)

This route of entry will not be suitable for low skilled/paid workers. Any eligible EU nationals working in these roles who wish to remain in the UK after the end of the transition period, should therefore apply for Settled/Pre-Settled Status.

In order for an individual to apply for a visa under the Skilled Worker route, they will first need to have a job offer from a “registered sponsor”.  In other words, businesses looking to make use of this visa route will need to pre-apply to become registered with the Home Office in advance of next year.

If the business does not hold a sponsor licence, they will not be able to even consider sponsoring individuals which, in turn, means that they may not be able to employ non-UK nationals at all (or at least not until they have gone through the process of obtaining licence).

Employment businesses and umbrella companies will not be able to obtain a sponsor licence unless they will be employing the individual in their own business; individuals cannot generally be supplied to work for 3rd parties under the terms of a sponsor licence.

Employment business and umbrella companies should consider the extent to which the new immigration rules may affect their business model and get in touch with us if they would like to discuss this further.

Right-to-work checks

From 1 January 2021, employers will no longer be able to rely on, for example, an EU passport to establish an individual’s right to work in the UK.

The Government is due to release further guidance on the changes to right-to-work documentation and we will release a further article on this in due course. In the meantime, employment businesses and umbrella companies should be aware of these impending changes and keep their eye out for further guidance.

Agencies providing permanent recruitment services should check their terms of business with clients to identify whether they include any warranties or indemnities regarding only introducing individuals who have the right to work in the UK.

What next?

These changes represent the biggest upheaval in UK immigration law in a generation. Businesses need to get to grips with the new system quickly in advance of next year and should take urgent advice about the implications of these changes on their plans and compliance obligations.

Recruiters and agencies which understand the new visa requirements will be able to adapt their business models in advance of these changes.

For those who place candidates – whether on a temporary or permanent basis – an understanding of the new rules will be essential to ensure you can help clients with facilitating the placements of non-UK national candidates. This might include recommending clients hold sponsor licences (so that they can access this visa route), helping clients to understand which roles are potentially eligible under the new Skilled Worker route and/or facilitating candidates becoming “visa ready”.  These additional “value added” services will help your business stand out in a crowded marketplace, and may just give you the edge over your competition.


Brabners – L. Darnley & H. Morrison (02.09.2020)

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