The plans also include the introduction of a temporary work visa for lower skilled workers. Under the route, workers will be permitted to remain and work in the UK for a maximum of 12 months, after which they must leave the UK. A ‘cooling off' period of 12 months then applies.

In response, concerns have been raised across the economy that the limitations of the new route will render it unattractive to migrant workers. Sectors such as retail, construction, health and agriculture are predicting critical shortfalls in lower skilled labour under the new rules where the domestic labour market remains unable to satisfy industry recruitment needs.

As the government proceeds with formulating the new system ahead of the 2021 deadline, businesses are being urged to start planning now to prepare recruitment strategies, budgets and processes for the changes ahead.  

Brexit however, and in particular the prospect of a No Deal exit, creates a critical complicating factor for businesses looking ahead to the new system. With both the UK and the EU continuing to invest and make preparations for a No Deal scenario, employers are now being urged to do the same.

Deal or No Deal impact

The Deal scenario would of course be determined by the terms of any agreement that is approved, which, at the time of writing, remains an elusive prospect.

In preparation for a No Deal, the Government has published specific arrangements for EU migration. Under the plans, in the event of a No Deal Brexit, EU free movement will end with immediate effect. After Britain leaves the EU, non-UK EU citizens not already in the UK will be allowed to enter the country, but will only be permitted to stay for a maximum of 3 months.

To remain in the UK lawfully beyond this 3 month period, they will have to apply for the new ‘European Temporary Leave to Remain', which will allow the individual to work, live and study here for up to 3 years. At the end of this period, the individual must either leave the UK or apply to remain under a different visa route. It will not be possible to extend this leave, nor will it count towards EU settled status or indefinite leave to remain [3].

The eligibility requirements for European Leave to Remain are not yet known, making it extremely difficult to gauge the likely success rate of applications and as such the impact the new rules will ultimately have on the availability of EU workers in the UK.

Where EU citizens are granted temporary leave, at the end of the 3 years, the individual will have to leave the job and the country, unless they are granted leave under a different route. This will be a significant concern for businesses looking for longer-term workforce solutions.

It is also not clear whether EU citizens will be able to leave the UK at the end of the initial 3 months and return to ‘reset the clock', thereby negating the need to apply for leave to remain. 

What should employers be doing now?

The end of EU free movement and a no-deal Brexit will inevitably hit companies' recruitment and workforce planning. Employers should take advantage of the extended Brexit deadline - now 31st October - to carry out critical planning and preparation for both Deal and No Deal scenarios.  

Steps should be taken to reassure existing EU national workers through this period of change. With the new EU Settlement Scheme now fully open, employers are encouraged to ensure existing EU employees feel supported through the process, not least to minimise EU staff attrition. Measures could include offering settled status presentations and sharing guidance materials.

While the Government has stated that employers will not (as yet?) be required to perform document checks on EU workers, their right to work duties [4] under law - and the penalties for non-compliance - remain. Having immigration compliance in order will stand businesses in good stead to respond to updates in legislation that may follow to bring all of the rules into line.

The changes are also likely to create training needs for business owners, HR, line managers, supervisors and other personnel responsible for recruiting and onboarding, to avoid frontline breaches and unlawful practices.

Looking at the longer-term picture, recruitment strategies, budgets, timescales and policies should be reviewed in light of future restrictions on EU worker access and the immigration system overhaul to avoid disruption to employee supply and maintain competitive advantage when accessing international talent markets.