Employment Legislation Changes as of 1 July 2021
With effect from 1 July 2021, employers will have to check that workers from the European Economic Area (EEA) and Switzerland have the right to work in the UK.
The EU Settlement Scheme, which allows EEA nationals who were in the UK by the end of 2020 to continue living and working in the UK, closes to applications on 30 June 2021. Until 30 June, EEA nationals can simply present their passport or national ID card as evidence of their right to work in the UK. After that date, however, EEA citizens will need an immigration status in the UK and will no longer be able to rely on their EEA passport or national ID card.
Evidence of right to work in the UK
For UK nationals and Irish nationals, the process of checking individuals’ right to work in the UK remains straightforward: employers have to check an original official document, like a passport, and retain a copy on file.
In respect of other foreign nationals, excluding Irish citizens, proving a right to work in the UK will involve the following:
· The EU Settlement Scheme; or
· The points-based immigration system and employer sponsorship.
EU Settlement Scheme
The EU Settlement Scheme applies to EU nationals who started living in the UK prior to 31st December 2020. Eligible individuals had to make an application before 30th June 2021 in order to be given either settled or pre-settled status:
· Settled status is usually given to individuals who have lived in the UK for a continuous 5-year period. Settled status gives individuals the right to stay in the UK for as long as they wish.
· Pre-settled status is usually given to individuals who have not lived in the UK for a continuous 5-year period. Individuals can apply to switch to settled status as soon as they have had 5 years’ continuous residence.
Those EEA/Swiss nationals with a digital status under the EU Settlement Scheme will have to evidence this to a new employer through the online checking service: https://www.gov.uk/employee-immigration-employment-status . Employees and potential employees must give their permission for a check to be made.
Points-based immigration system
If a foreign national does not have settled or pre-settled status, the new points-based immigration system applies. Under this system, points are awarded for factors like education level, fluency of English and salary. A threshold of 70 points must be reached in order to qualify for a right to work.
There are fast-track schemes that run alongside this, including for students, graduates, skilled workers, seasonal workers and specialist occupations.
Employers will need a sponsor licence to employ individuals from outside the UK, including citizens of the EU, Iceland, Liechtenstein, Norway and Switzerland, who arrived in the UK after 31 December 2020.
A sponsor licence is not needed for employers who are seeking to employ:
· Irish citizens;
· those with settled or pre-settled status under the EU Settlement Scheme ; or
· those with indefinite leave to remain in the UK.
The cost of a sponsorship licence is £536 per employee for small companies and £1,476 for medium and large companies. According to the gov.uk site, most sponsor licence applications (8 out of 10) are dealt with in less than 8 weeks.
Changes to furlough
The Coronavirus Job Retention (furlough) Scheme has been extended until 30 September 2021. From 1 July, the level of grant is reduced to 70% and employers are required to contribute 10% (up to £312.50/month).
Employers are free to top up employees’ salaries to 100%, if they wish.
For August and September, the government contribution will reduce to 60% and the employment contribution will increase to 20% (up to £625/month).
The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.