Posted: Thu 28th Feb 2019
Freedom of movement is set to end after March 2019 but what will this mean for small business owners employing staff from the EU? Rebecca Burn-Callander, business journalist and author of The Daily Telegraph Business Guide to Brexit (published in summer 2019) has the lowdown.
There are currently around 2.25m EU nationals working in the UK. This is a substantial labour pool and many company bosses fear that Brexit could lead to a mass exodus of workers, or prevent future immigration.
According to the Office for National Statistics, 132,000 EU nationals have already left the country since 2017. Here's a handy guide for any small business owner seeking to reassure existing staff, or ensure a steady pipeline of future EU talent.
How will existing staff be affected?
The good news is the government has already promised that EU nationals already working here in the UK are unlikely to be affected by upcoming changes to the system.
Despite this pledge, Gemma Jones, co-head of Immigration at SA Law, has been advising her small business clients to ensure that all their EU workers obtain their "right to remain" or permanent residency documentation to play it safe.
"It's still possible to apply for that now, and if you have that paperwork in place, it will be much easier to convert it to a 'settled status' document when that comes into force," she explains.
'Settled status' means that an EU national has been here for five years and intends to remain in the UK. The responsibility to acquire this document will ultimately lie with the EU national, but good bosses will encourage their European staff to get their paperwork in order for peace of mind.
What will the system look like post-Brexit?
The UK government is yet to give absolute clarity on this issue but the most likely scenario is that EU nationals will be treated in the same way as non-EU nationals. This means that everyone who comes to the UK will need to be sponsored by a company or institution.
The government has also made it clear that it intends to dramatically reduce immigration. "Comments at the last Conservative Party Conference made it clear that low-skilled migration is to be curbed," explains Jones. "This means that certain low-skilled roles are likely to be eliminated from the system."
There may be a few exceptions for industries that are heavily reliant on low-skilled workers from the EU. Trade bodies from the hospitality and food industries have warned of a major shortage of workers, for example, which may prompt the government to include roles such as restaurant managers and catering staff on the "want" list.
How much will it cost to sponsor workers?
There is likely to be a value threshold for sponsored roles. This means that skilled EU nationals will require a minimum salary of £30,000 a year, which could be more than many small firms are able to pay.
There are also fees associated with sponsoring staff: companies will need to secure a sponsorship licence, which involves a one-off application fee. This currently stands at £536 for small sponsors (a business is considered to be 'small' if its annual turnover is £10.2m or less, or if it has 50 employees or fewer).
There is also Certificate of Sponsorship fee of £199 for each new sponsored staff member. In addition, there is a government Application Fee, which ranges from £600 to around £1,200 depending on the length of the sponsorship.
There may be other costs to consider too, such as the immigration skills surcharge and the health surcharge. Jones warns that these fees are only theoretical at this stage, as a whole new system may be introduced.
She said: "I hope that this helps to demonstrate how expensive it can be to sponsor migrants under the current system. Without wishing to alarm businesses, they do need to plan for a post-Brexit world."