Employers are accelerating recruitment plans to bring foreign hires into the UK by December 31 in order to avoid having to pay hefty sponsorship fees, says Bates Wells, the City law firm. However, Covid related travel issues, are adding to the challenges employers face.
From 1st January 2021, free movement will end and the new immigration system will treat EU and non-nationals the same. EU nationals may need to be sponsored by an employer. Businesses first need to become registered sponsors, small businesses will have to pay £536, with the fee rising to up to £1,476 for medium and large businesses. EU nationals who arrive in the UK by 11pm on December 31 have six months in which to apply for residency under the EU Settlement Scheme, which does not cost anything.
Bates Wells says there are fears that smaller businesses may be priced out of the new immigration system and could suffer from skills shortages as a consequence.
Some businesses may decide to pass on the cost of sponsorship to their employees. For those earning just over the threshold of the minimum earnings requirement, or people with families to support, this could put them under considerable financial stress or make it impossible for them to move to the UK.
Some of the sectors that have traditionally been most reliant on EU labour include hospitality and social care. These industries have been amongst the hardest hit by the coronavirus pandemic and could struggle to afford sponsorship costs.
Chetal Patel, Partner at Bates Wells says: “Following Covid-related hiring freezes, businesses are now rushing against the clock to bring new hires into the UK ahead of the December 31 deadline.”
“All of this compounded by the Covid-related problems over travel such as quarantine restrictions and the understandable reluctance to move country during the crisis.”
“This has come at the worst possible time for the many businesses that have had to put recruitment on hold due to coronavirus. Businesses are under enormous pressure already and shouldn’t have to incur extra costs just to have access to skilled labour.”
“Businesses shouldn’t have to judge the arrival dates of EU nationals so some may take a risk based approach as to whether to go down the sponsorship route or simply rely on a European passport or national ID card as evidence of someone’s right to work in the UK until 30 June 2021, in the hope that they will have obtained status under the EUSS.”
In addition to the extra costs incurred with sponsorship, Bates Wells says that businesses that go down this route need to be careful that they carry out due diligence, as they could face criminal charges if it transpires that they know or have reasonable cause to believe that they are employing an illegal worker.
Chetal Patel says: “Businesses could potentially lose their licence to sponsor employees, or in the most serious cases, face criminal sanctions including a prison sentence of up to five years and/or an unlimited fine.”
“The net is cast wide for these criminal sanctions and it could extend to directors, managers or secretaries which on the face of it, could mean people involved in the recruitment of staff.”