The end of the Brexit transition period at 11pm on 31 December 2020 means that free movement for European nationals has ended. Virtually all UK employers are impacted but the construction industry is particularly affected given the numbers of EEA and Swiss workers employed within the sector.
The Office of National Statistics’ latest figures indicate that 10% of all workers within the industry are EU nationals. Within the London construction industry this proportion increases to a staggering 33%.
From 1 January 2021 European nationals coming to the UK for the first time will be treated in the same way as non-European nationals under the UK’s immigration rules. Businesses in the construction industry, which rely heavily on a European workforce, will need to prepare for what is ahead:
Check that you are protecting your current European workforce
Different rules apply to European nationals depending on whether the individual first arrived in the UK before or after 11pm on 31 December 2020. Employers should take steps to ensure their current European workforce will be able to continue working in the UK on a long-term basis.
European nationals and family members who first entered the UK before 11pm on 31 December 2020
Virtually all European nationals (and their family members) will need to apply under the EU Settlement Scheme (the Scheme) in order to continue living and working in the UK long term.
Only certain categories of people are exempt from having to apply under the Scheme, which are Irish nationals, those with dual EU/UK nationality and those who hold UK immigration leave called indefinite leave to remain or enter. It is important to note that those with permanent residence documents must still apply under the Scheme as well as family members of Irish nationals.
The application is an online process and there is no application fee to apply. The deadline to apply is 30 June 2021. Failure to apply by the deadline will mean that the individual will not have the right to live and work in the UK after 30 June 2021 and it is likely that it will be a criminal offence for an employer to employ them.
Individuals will be granted either settled status or pre-settled status under the Scheme. Those with five years' continuous residence in the UK should be eligible for settled status. Continuous residence is defined as having been present in the UK for at least six months in every 12-month period (subject to limited exceptions).
Those with less than five years continuous residence should be granted pre-settled status. Pre-settled status is granted for five years and it appears that this cannot be extended. Individuals must therefore be careful to safeguard their ability to apply for settled status after five years in the UK and ensure that they do not spend more than six months in any 12-month period outside of the UK. Employers must consider the impact that regular travel or time spent overseas, could have on their employee’s ability to apply for settled status.
Businesses should encourage their employees to apply under the Scheme and should check that everyone has obtained the relevant status by 1 July 2021 or they risk being unable to employ these individuals from 1 July 2021 onwards.
European nationals and family members who arrive in the UK for the first time after 11pm on 31 December 2020
These individuals will not be able to apply under the Scheme and to live and work in the UK they will need to apply under the new Immigration Rules, which came into effect from 1 January 2021.
In many cases, employers will need to sponsor European nationals under the new Skilled Worker category and the employer will require a sponsor licence to do so. If the business does not already hold a sponsor licence it should consider applying for one as soon as possible, after taking advice on the HR processes that need to be in place.
No low-skilled immigration route
It is only possible to sponsor individuals under the sponsorship system in medium-skilled or highly-skilled roles. For example, this means that employers in the construction industry could sponsor non-UK nationals in roles such as surveyors, construction project managers/supervisors, carpenters or electricians.
However, the sponsorship system will not allow employers to sponsor individuals to undertake lower-skilled roles such as general labourers or plant and machine operatives.
Even where it is possible to sponsor an individual, employers need to be aware that the sponsorship system involves:
- Hefty costs for the employer – Home Office immigration fees alone can reach £9,500 to sponsor one individual for five years
- Lead-in times - often weeks or months from starting the visa process
- The employer agreeing to take on onerous compliance obligations as the sponsor
Frontier worker permit scheme
Businesses should also consider how the changes will impact workers coming to the UK temporarily and whether the new frontier worker permit scheme may be appropriate.
Construction businesses may engage individuals who are primarily resident in a European country outside of the UK but who frequently travel to the UK to work. It may be possible for these individuals to apply for a frontier worker permit to enable them to continue to work in this way.
Only individuals who were frontier workers before 1 January 2021 and who continue to work as frontier workers until they submit their application will be able to apply under this scheme.
The rules are relatively complex but broadly individuals will be eligible to apply under the frontier worker permit scheme if they:
- Are an EEA national (including Swiss nationals)
- Are not primarily resident in the UK
- Are either a worker in the UK, self-employed in the UK or a person who has retained the status of being self-employed or a worker under the relevant legislation
Brexit Checklist
- Do you know who in your organisation needs to make an application under the EU Settlement Scheme? If not, carry out an audit as soon as possible.
- Encourage your European workforce to apply under the Scheme before 30 June 2021 – the gov.uk website has an employer toolkit to assist with this.
- Diarise to undertake right to work checks on all employees in May/June 2021 and record any pre-settled expiry dates to diarise for further right to work checks. Whilst you do not need to carry out these checks for any self-employed contractors, businesses should consider the reputational damage if it later transpires that the individual does not have the right to work in the UK.
- If the business does not yet hold a sponsor licence, consider applying for one now as this will be needed to sponsor European or non-European nationals from January 2021. Before doing so, the business should take advice on the sponsor obligations and HR processes that need to be in place.
- Employers should be considering their current recruitment models – especially for the roles where they rely on low-skilled European workers and also factor in the costs of sponsorship to sponsor non-UK nationals to undertake medium and highly skilled roles.
- Ensure any offer letters and employment contracts state that employment is conditional on the person having the right to work and the employee providing satisfactory evidence of that right to work.
- Consider how to handle European nationals who are resident overseas but who need to work in the UK on an ad hoc basis. They may qualify for the new Frontier Worker Permit in some cases.
The key changes that took effect at the end of the transition period mean that EEA and Swiss nationals will be treated in exactly the same way as non-European nationals under the UK’s immigration rules. This is a particular challenge to the construction industry with its reliance on European workers – employers and individuals alike need to be preparing for the changes.
Jackie Penlington