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What does Br-exit mean for you or your networks staff or franchise prospects from the EU or elsewhere?

Written by Fiona Boswell on Monday, 09 November 2020. Posted in Legal, International

In the second of our Brexit series we focus on the impact it has on immigration. Franchises in sectors such as care, hospitality and retail rely on staff and franchise prospects from the EU and elsewhere to facilitate the operation of their franchises.

What does Br-exit mean for you or your networks staff or franchise prospects from the EU or elsewhere?

What does Br-exit mean for you or your networks staff or franchise prospects  from the EU or elsewhere?             

In the second of our Brexit series we focus on the impact it has on immigration. Franchises in sectors such as care, hospitality and retail rely on staff and franchise prospects  from the EU and elsewhere to facilitate the operation of their franchises.

As many franchise businesses are dealing with the significant impact of COVID-19, Brexit is still very much on the Governments agenda with the controversial immigration bill voted through the House of Commons earlier this year. The UK will see a new immigration system come into effect in less than three months’ time at the start of January 2021 ending free movement and the end of the Brexit transition period.

Following the end of free movement, the immigration system will treat EU and non-EU citizens equally. Any franchise business planning on recruiting an individual from overseas after 1 January 2021, including an EU national should be considering the implications following the changes. 

What are the Key changes?

Some key changes will include:-

  • EU nationals will now require to be sponsored and obtain a visa to work in the UK
  • Skills level - reduced to ‘medium skilled’ RQF level 3 (currently RQF 6)
  • Salary - General salary threshold of £25,600 per annum or the going rate (whichever is higher) a reduction from the current rate of £30,000]
  • Applicants can earn less than £25,600 per annum but not less than £20,480. Points (20) can be traded against specific characteristics against a salary. For example, having a job offer in a shortage occupation role or a PhD relevant to the job
  • End of Resident Labour Market Test (RLMT)
  • The cap on Tier 2 (General) applications will be suspended

What if I already have a sponsor licence 

Currently employers only require a sponsor licence to employ skilled workers from outside the EU. However from January 2021 businesses will also require a sponsor licence before they can employ skilled workers from the European Economic Area (EEA).

After obtaining a sponsor licence an applicant will still need to ensure they have the relevant skills and requirements to obtain a visa.

What should you do now?

Processing times for a sponsor licence can be 2-3 months and it is strongly advised to apply for a sponsor licence ahead of the changes in January 2021.

- Connect regularly with EU nationals in your workforce - Under the new system lower skilled EEA nationals may not qualify for a visa. Businesses wishing to recruit and retain their EEA workers should encourage them to apply under the EU settlement scheme which will allow them to remain and work in the UK. Applications for EEA nationals in the UK by 31 December 2020 must be made by 30 June 2021

- Consider business recruitment needs from January - Consideration will need to be given to the time it will take for EU citizens to apply for visas before being able to work in the UK

- Consider additional business costs for hiring EEA nationals additional costs will include the Immigration Skills Charge (£1,000 per year) and Immigration Health Surcharge (£400 per year due to increase to £624)

- Consider applying for a Sponsor Licence to allow your business to recruit EEA nationals from 01 January 2021

It is important that the sponsor licence remains compliant. It is therefore a good idea to conduct a ‘health check’ on the licence to ensure processes and procedures are in place. Additionally it is important that key personnel are updated and the current Authorising Officer on the account is aware of his/her duties. 

Additional Certificate of Sponsorship allocations may be required and these should be requested ahead of implementation of the new system to ensure there are no delays in January.

About the Author

Fiona Boswell

Fiona Boswell

Fiona Boswell is a BFA Qualified Franchise Professional, partner and head of franchising and commercial services at Knights plc.

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