Brexit update: future recruitment
The Government has released the long-awaited White Paper on its post-Brexit immigration policy. The White Paper sets out the proposed immigration regime that would apply from 1 January 2021, whether the UK leaves the EU with a deal or no deal. The starting point is that EU free movement rules will end and the same rules which apply to non-EU nationals will apply to EU nationals from January 2021. This will fundamentally mean businesses being required to employ EU nationals under the sponsored Tier 2 visa route for skilled work. However, there will be some significant changes to the rules and requirements for sponsorship, given their wider scope. Some of the key highlights for employers from the proposals are:
- the annual limit on the number of sponsored skilled work visas (Tier 2 General visas) will be removed
- employers would no longer be required to carry out a resident labour market test in order to obtain a sponsored skilled work visa (Tier 2 General visa)
- employers would require a sponsor licence to employ both EU and non-EU nationals on sponsored skilled work visas but the Government is considering a 'tiered' system of sponsorship to ease the burden on employers who only require a licence for a small number of vacancies
- the skill level required for sponsored skilled work visas (Tier 2 General visas) will be lowered - currently these are for degree level or managerial roles only (although there would be no lowering of the current skill level required for intra company transfers from linked offices outside the UK)
- the Government will consult with businesses about reducing the current minimum salary threshold of £30,000 for sponsored skilled work visas (Tier 2 General visas)
- the current two-year Tier 5 (Youth Mobility) visa route is to be expanded to allow for a new UK-EU Youth Mobility Scheme
- visitors from EU27 countries would not require a visit visa in advance of travel, including business travel, and would be able to use e-gates for quick entry
- international students would be granted a six-month period to stay and work in the UK on completion of a master's or bachelor's degree in the UK
- there will be no dedicated route for unskilled labour but, for a transitional period after Brexit, there will be a 12-month visa route for nationals of any skill level from specified low risk countries (with no option to extend, switch into other routes or bring dependants).
While the changes will be welcomed by many employers, the lack of any dedicated route for unskilled labour may present challenges for employers in sectors such as hospitality, agriculture and manufacturing.
Right to work checks
The Home Office has introduced a new online Right to Work Checking Service. From 28 January 2019, employers will be able to check right to work for some employees online, instead of relying on physical documents. The service can be used for non-EEA nationals who hold biometric residence permits and EEA nationals who have been granted settled status under the EU Settlement Scheme. However, it is not available for British citizens or EEA nationals without settled status, and employers will still be required to see physical documents for such individuals. From 28 January 2019, British citizens without a passport will be able to produce a short birth or adoption certificate, along with proof of their national insurance number. Previously, the employer could only accept a full birth or adoption certificate, which could only be obtained at a cost, whereas the short birth or adoption certificate is free of charge.
Immigration Health Surcharge increase
Since 6 April 2015 UK visa applicants have been required to pay an Immigration Health Surcharge (IHS) fee as part of their applications to give them access to the NHS during their stay in the UK. The fee is paid online at the time the visa application is submitted and is mandatory for applicants applying to come to the UK for six months or more. On 8 January 2019, the IHS fee level was doubled to £400 for each year of the visa sought for individuals coming to work or join family members in the UK. The discounted rate for students and those on the Youth Mobility Scheme has also doubled to £300 for each year of the visa.
New company reporting requirements
A number of new requirements to report about employees and pay take effect in 2019. The changes apply to financial years beginning on or after 1 January 2019, so the first reports will be published in 2020.
- CEO pay ratios: Quoted companies (i.e. those listed on the London Stock Exchange, an EEA exchange, the New York Stock Exchange or NASDAQ) with more than 250 UK employees will be required to report pay ratio information in their annual directors' remuneration reports. The pay ratio information will need to compare the total remuneration of the company's CEO with the
remuneration of employees at the 25th, 50th and 75th percentiles of the workforce, and provide an explanation of the ratios. Going forward, it is intended that the ratio information should cover a ten-year period.
- Corporate governance for private companies: Large private companies will be required to include a statement about their approach to corporate governance in their directors' reports, including which corporate governance code the company has applied (if any), how it did so and the reasons for any departure from that code. The Financial Reporting Council has published the Wates Corporate Governance Principles for Large Private Companies which can be used for this purpose. The requirement will apply to companies that have either more than 2,000 employees or a turnover of more than £200 million and a balance sheet of more than £2 billion.
- Employee engagement: All companies with at least 250 UK employees will be required to report on employee engagement as part of their annual directors' reports. The report will need to describe what measures were taken during the financial year to introduce or develop arrangements for providing information to employees and consulting with them about decisions likely to affect them. Directors will also need to explain how they engaged with employees and had regard to their interests, and how this has impacted on key decisions of the company.