European Union: Brexit And Immigration – What's The Latest For Employers?

Last Updated: 27 June 2018
Article by Moji Oyediran

Significant progress has been made on the rights of EU nationals in relation to Brexit and the government has just provided further details of the new "settled status" scheme for EU nationals already in the UK. However, the recent Windrush scandal has left many sceptical of the UK's ability to successfully introduce new immigration systems for EU nationals after Brexit. Many employers also remain concerned that the Government is yet to publish any details of the regime that will apply post-Brexit, once the transitional period has come to an end.

Where are we now?

Arrangements for EU nationals already living in the UK and those who arrive in the UK immediately after Brexit have been provisionally agreed (see: Brexit - Some clarity for EU nationals.pdf). This provisional agreement is, of course, subject to the caveat that "nothing is agreed until everything is agreed". However, the UK and the EU have agreed to a "transition period" until 31 December 2020, during which time EU nationals will continue to have access to much the same rights as they do currently, subject to new registration requirements.

The scope of the Government's task

As things stand, the Government will require all EU nationals currently living in the UK, and those who come to the UK for more than three months during the post-Brexit transition period, to register for a new form of immigration status document. EU nationals with at least five years residence in the UK as at Brexit will be required to apply for a new "settled status" document to reflect their indefinite right to live and work in the UK. EU nationals with less than five years residence at Brexit will apply under a new "pre-settled status" route to allow them to reach the five years necessary to apply for settled status.

With the numbers of EU nationals living in the UK estimated to be around three million, the logistics of implementing a new mandatory application process cannot be underestimated. The Government has promised a digital, "streamlined and user-friendly" application system with a target two-week processing time for applications. However, a recent Home Affairs Select Committee report on the Home Office's delivery of Brexit has questioned the Home Office's ability to implement the systems required for EU registration against a backdrop of the Windrush scandal and "a picture of Home Office teams struggling with a lack of resources, high turnover of staff and unrealistic workloads". On 16 May 2018, the Government responded, committing to provide further details of the new registration system for EU nationals in the coming weeks and to ensure lessons learned from the treatment of the Windrush generation are reflected in the system. More details have now been released today, (21 June 2018), including new draft Immigration Rules which will form the legal basis for the new scheme.  The draft Rules will now be subject to consultations with stakeholders before being brought into force later this year.

The "EU Settlement Scheme" – the system through which EU nationals currently in the UK will be able to obtain settled status or pre-settled status to remain in the UK is expected to be phased in later this year for early applications. It is expected to fully open to all applicants by 30 March 2019. Application fees are expected to be less than the price of a British passport, at around £65. EU nationals with permanent residence documentation issued under the existing regime will have to re-apply but will not have to pay a further fee. EU nationals are expected to have a grace period until 30 June 2021 to apply for the new status documents.

Post-transition – where are we going?

EU nationals arriving in the UK from 1 January 2021 onwards, after the agreed transition period ends, will be subject to a new immigration regime. However, the Government has not released any detail of what this new regime will look like. The Home Affairs Select Committee has called on the Government to provide some urgent clarity.

The Government was to publish a White Paper on its post-Brexit, post-transition proposals last summer but the report has been delayed. According to the Select Committee, the delay "has caused anxiety for EU citizens in the UK, uncertainty for businesses, and concern in Parliament". The Government says it is considering a "range of options" and will set out its plans "later this year".

The independent Migration Advisory Committee ("MAC") has been commissioned by the Government to report on the impact of Brexit and the future shape of the UK's immigration system. The MAC released its first interim report on 27 March 2018. Its final report is due in September 2018 and the UK government's Immigration White Paper on any new system is expected to take account of the MAC's recommendations.

One option is for EU nationals to become subject to the requirements currently applied to non-EU nationals. The significant impact of increased costs is a concern for many employers, as Home Office visa fees for recruiting non-EU employees run into several thousands of pounds per person. For many employers, such increased costs would be prohibitive based on their existing levels of EU recruitment. Employer sponsored visas for non-EU nationals are also subject to a numerical cap of 20,700 per annum. This cap has been hit over the last six months leading to rejections of applications and recruitment delays. Consideration will therefore need to be given to whether or not a similar cap should be applied to EU workers under any new system.

Moreover, the current system for non-EU work visas makes no provision for low-skilled work. The new system must address the need for lower skilled jobs, many of which are currently filled from the pool of EU workers. As some of these jobs will not meet the current minimum graduate skill level set for employer sponsored work visas under the current system, this remains an area of significant concern for employers who worry that there will be shortages following Brexit. Employers in certain sectors have already reported difficulties recruiting and retaining EU staff.

Watch this space

The agreed transition period provides employers with significant breathing space in terms of recruiting EU nationals in the short to medium term. However, longer term, employers will need to wait until later this year for details of the Government's post-transition immigration plans. In the meantime, many employers will be keeping an eye out over the coming weeks for details of the new registration scheme for existing EU staff and may wish to encourage staff to get applications in as early as possible to avoid bottlenecks.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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