Brexit and mobile workers

Fri 24 Jun 2016

Following the vote for the UK to leave the European Union today we are aware that many, particularly the employers of European nationals, will be questioning what this means for them and their employees going forward.

Firstly it is important to reiterate that it is clear nothing is going to change overnight, with confirmation that the UK is likely to remain within the EU for at least the next two years whilst exit negotiations take place. It is quite possible that any changes that are eventually brought in to place will only affect those wishing to come to the UK after that point, not those that are already here.

However, given that speakers in both camps and many commentators are saying that immigration was the biggest factor in the leave vote, it is likely that the subject might be fairly high up on the agenda once negotiations begin.

A Points Based System for EU nationals?

Currently, under EU law, members of the European Economic Area can come to the UK to live, study, seek or take up work without requiring any kind of visa or work permission. It is difficult to say in these early stages what the future landscape for UK immigration may look like, but it was clear during the leave campaign that the introduction of a Points Based System for EU nationals is a possibility.  Indeed, this system has been in place for nationals outside of the EU since 2008 so this is not a new idea, but the application of it to nationals of the EU would be a substantial change.  It is also important to note that as it stands, the Points Based System does not impact on individuals who wish to visit the UK for either tourism or business and the likelihood is that nationals of the EU will still be able to travel for business or tourism outside of such a process.  (Whether visa regimes for certain European countries will be introduced is another question upon which it is difficult to speculate at the current time).

So what will it mean if the Points Based System as it stands is rolled out to cover nationals of the EU looking to come to work in the UK? There are a number of key factors to consider.

• The current Points Based System has 5 tiers to cover various categories of worker in the UK:
• Tier 1 – investors and entrepreneurs
• Tier 2 – skilled workers
• Tier 3 – low skilled workers (to date this tier has never beeen active)
• Tier 4 – students
• Tier 5 – temporary workers such as charity workers, interns and the youth mobility scheme
• It operates by requiring migrants who wish to come to the UK to score a certain number of points in order to qualify for their visa.
• Under Tier 2, certain criteria must be met with regards to the skill level of the role (at least Bachelor degree level) and the salary levels paid to the individual.  It also requires the individual to have a UK sponsor (i.e. a UK company) willing to sponsor them and issue them a work permit, known as a certificate of sponsorship.
• A huge amount of responsibility is placed upon the employer to ensure that they are administering the system correctly and in compliance with current UK immigration rules and regulations, which are already complex and change on a frequent basis.
• In an attempt to control the numbers coming into the UK under Tier 2, a cap is also in place for migrants coming into permanent roles with UK companies from outside the UK, currently set at £20,600 per annum.
• Substantial costs apply with each migrant that is sponsored under Tier 2 General in the region of £1,300 per worker for a 3 year visa and with the introduction of the immigration skills charge next April, this will increase to £4,300.

Managing a low skilled migrant workforce

Since many workers from the EU who are currently here working in the UK are in lower-paid, less skilled roles it will be interesting to see how the system would be applied going forward. It is very possible that for the first time since the introduction of the PBS back in 2008 we will see Tier 3 come into effect, although how and when would remain to be seen.  Undoubtedly, the system would also involve a set of points scoring criteria and would perhaps only apply to certain sectors or industries where we experience shortages following Brexit. A cap on numbers is also a very strong possibility given the current climate. The other certainty is that there will be costs involved unfortunately, both for the UK employer and the migrant themselves.

On the flip side, many are speculating that the UK will aim to negotiate relaxed freedom of movement deals in both directions in order to try to reduce the impact on trade and the economy.

However, it is difficult to ignore the fact that today’s news could have a much more wide reaching impact as other countries and businesses around the world, both in and outside of the EU, consider the new state of play. If we can no longer play our ‘gateway to Europe’ card we could see changes to our immigration landscape that no one can fully comprehend as yet.  Needless to say, the Mazars Immigration team will remain close to developments as and when they occur and will continue to provide news and up-dates in this respect.

In the meantime, if you have any questions or wish to discuss in more detail, please do not hesitate to contact:

Alison Hutton, Director – T: 020 7063 4682 E: Alison.hutton@mazars.co.uk