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How can businesses get ready for the new UK immigration system?

With free movement coming to an end, we look at the biggest change to the UK’s immigration system in over 40 years.

While COVID-19 has dominated the media landscape, government resources and the focus of many organisations this year, it’s no longer the single most pressing issue for many organisations. Attention is now turning back to Brexit, and in particular, the new immigration rules that come into effect on 1 January 2021.

Dealing with the economic and logistical fallout from the pandemic, organisations may have taken their eye off Brexit plans, rules and regulations. But with less than three months until these new immigration rules come into force, organisations must move from planning to action. For many, this is where the difficulty begins - where do they start?

The first thing to do? Check how prepared they are.

Time is ticking: bring in a specialist

All organisations need to start making preparations for the new system. Even those that are more prepared may still have significant knowledge gaps within their global mobility or HR teams. There are also additional challenges alongside the new immigration system to be aware of: frontier workers, social security, the Posted Workers Directive and potentially complex rules around business travellers.

Certain organisations may even need an understanding of what trade deals are happening as these will include separate immigration categories for countries, such as Japan, US, Canada and Australia.

“Organisations need to check if they and their legal team are ready. For organisations that only have generalist legal support, Brexit-related challenges can quickly become more challenging. Those businesses may need to look to a global mobility or immigration specialist.”

Lindsey Barras Partner, PwC UK

A new system means new challenges, but also new opportunities

From 1 January 2021, any new EU arrivals will need permission to live, work or study in the UK.

Organisations must understand how the new immigration regulations will affect their workforce and any steps they should take now. At the same time, it’s worth undertaking cost projections to identify the impact across the business.

An overhaul of recruitment and retention strategies needed?

Once free movement ends, EU nationals will have the same status as those outside the EU. This leaves a complex set of considerations for organisations: Do they try to continue with their current workforce? Do they look to recruit from the resident workforce only? Do they look at workers from territories not previously considered?

The answer could result in fundamental long-term changes to an organisation's people and recruitment strategies. For example, recruiting an EU national after the new rules are in force may lead to a significant cost for an organisation. But there will also be the same cost for any non-UK worker. While the most straightforward solution might appear to be to employ a UK national, ‘resident workers’ includes a whole range of individuals with the right to work in the UK, such as EU nationals here before 31 December 2020, dependants, and others. It is also unlawful to discriminate against an individual or group of individuals based on their nationality, including during the recruitment process.

While it might be possible to justify the discrimination in some instances, cost alone would not be a sufficient reason to reject a non-UK or non-resident worker. Because of this, it will be important to ensure any recruitment processes and procedures are not discriminatory.

“There is no one-size-fits-all solution. It depends on the individual characteristics of a given organisation, the industry it operates in and the makeup of its current workforce. But one thing is clear: those organisations that currently employ EU nationals would be best served sorting out their immigration status right now.”

Lyudmyla Davies Director, PwC UK

Sponsor Licences

Under the new rules, organisations that want to employ non-UK workers will need a Sponsor Licence. Currently, there are around 30,000 employers that hold these licences. Employers will need to assess how well they are meeting their current compliance requirements and with immigration authorities restarting compliance audits, now is a good time.

Organisations without a Sponsor Licence will need to think about whether they need to apply for one before the changes come into effect. Without one, they will not be able to support work permission going forward. A crucial part of the application process is ensuring that the relevant compliance structures are in place.

What about UK organisations operating in the EU?

There are also considerations for UK-based organisations that operate in the EU: in particular, how they move between the jurisdictions for work. UK nationals will need work permission for whichever EU country they will be working in, with each EU country having its own distinct rules.

Even short-term business visits for UK nationals (or EU nationals travelling to the UK) will require restricted activities to avoid compliance issues.

With travel much reduced at the moment, it’s an ideal time to review existing processes and systems, and work out future pre-travel assessments.

“In just a few months, UK nationals won’t be able to visit the EU without thinking ahead and planning the business purpose for travelling. And that will be the same for EU nationals visiting the UK. There’s a lot of potential here for significant financial and reputational risks that could be avoided by taking action now.”

Andrea Als Director, PwC UK

Communication is key

Whatever the organisation’s approach or solution, communicating with impacted stakeholders is key to minimising any disruption. As a minimum, organisations need to communicate with employees, recruitment and resourcing, and the wider business. Yet in a recent PwC survey of over 100 companies, 50% of respondents confirmed that they haven’t communicated potential changes to their affected workforce.

Individual employees will be affected differently by the new scheme and the organisation's response, so they must be clear about what’s happening. For example, some may need to apply under the Settlement Scheme, while others will need to understand what the business visitor rules mean for them.

For recruitment, it’s important to understand any practical implications, such as processes, costs and timeframes, to ensure business continuity and allocate training as needed. Similarly, for the wider business, key decision-makers should be informed about how the changes will enable additional costs to be incorporated into planning and facilitate new compliance structures.

Time to get ready

The new immigration rules are a generational change for organisations and individuals. They shouldn’t be viewed as challenging, but they do need to be considered with urgency. While every organisation will be impacted differently by these changes, they need to understand what that means for them and how they respond to it.

Those organisations that evaluate their progress and identify any further measures they must take will be best positioned to navigate this challenge, prioritise their actions and find future workforce opportunities.

To discuss any of the points raised in this article, please get in touch

Lindsey Barras

Partner, PwC United Kingdom

+44 (0)7525 926249


Lyudmyla Davies

Director, PwC United Kingdom

+44 (0)7803 456020


Andrea Als

Director, PwC United Kingdom

+44 (0)7590 352410


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