Is your workforce Brexit-proof?

Jackie Penlington, Stevens & Bolton: employers must take practical steps now to secure the long-term workforce stability of their business

For the UK to maintain its position as the leading global hub for the fintech and banking industries, it is crucial that employers in this sector prepare their workforce for the realities of Brexit.

Around 42% of the UK’s fintech workforce is international with almost a third of the total workforce originating from Europe. Recent reports estimate that the UK’s fintech sector is worth £7 billion to the national economy – this could be at risk if the talent pipeline is blocked.

With the UK fintech sector relying so heavily on overseas talent, businesses cannot afford to bury their heads in the sand, despite all the uncertainty surrounding the Brexit process. It is instead vital that employers take practical steps now to safeguard their employees, retain key staff and secure the long-term workforce stability of their business.

EU Settlement scheme application must be made by all European nationals

The single most important issue, and also the one that is still commonly overlooked by employers, is that, regardless of whether there is a deal or not, all EEA nationals (other than Irish and dual UK/European nationals) must apply under the EU Settlement scheme to secure their long-term right to stay here.

Deadlines for applications have been published by the Government (italicised below) though it is expected that, with the delay to Brexit, these will be pushed back.

• If a deal is agreed

If the deal is agreed, free movement for EEA nationals continues until 31 December 2020. Any EEA national residing in the UK by then may stay here long-term provided they apply for settled or pre-settled status under the EU Settlement scheme by 30 June 2021.

Anyone residing in the UK for less than five continuous years must first apply for pre-settled status. After residing in the UK for the five-year period, they must then apply for settled status.

• If no deal is agreed

If we leave the EU without a deal, EEA nationals residing in the UK on the date we actually leave (Brexit date) can remain but must apply for settled or pre-settled status by 31 December 2020.

In the event of a no-deal, any EEA national coming to live in the UK after Brexit date but before 1 January 2021 would not need a visa but may only remain for three months. To remain longer, they must apply for temporary European leave, valid for three years. They would either need to leave the UK after three years or apply under the immigration rules at the time.

Understanding the EU Settlement scheme

EEA nationals residing in the UK for less than five years should be eligible for pre-settled status, while those who have been resident in the UK for five years or more should be eligible for settled status.

The application process is online, comprising of an online form and the uploading of documents, where required.

Applicants will not generally need to provide documentation to prove residency in the UK. Instead, they’ll be required to provide their NI number, and automated checks will be carried out to confirm residency.

Proof of identity is required and individuals will need to either use the ID Document Check app (only available for Android devices), send their passports in by post or attend an appointment to have their ID document uploaded.

The future for fintech’s highly skilled workers

Where Brexit will really bite is from 1 January 2021 when EEA nationals will no longer have preferential access to the labour market.

Deal or no deal, from 1 January 2021, EEA nationals arriving for the first time to live here will be treated in the same way as other overseas nationals – they will need to qualify under the new immigration rules.

It’s likely therefore that the fintech and banking sector will increasingly need to rely on Tier 2 sponsorship for future hires from overseas. The majority of roles filled by non-UK nationals in these sectors should qualify for sponsorship, given they are often highly-skilled roles. However, businesses will need to budget for the additional significant costs involved with sponsorship.

Furthermore, instead of simply arriving at the border with their current passport or ID card, European nationals and their employers will need to factor in additional time to obtain work visas before arriving here.

There will need to be a change in mindset – currently employers can offer a role to a European national in the same way as they can to a UK national. Looking ahead, they’ll instead need to consider whether that European national has, or could apply for, the right to work in the UK.

There’s also a real risk of a substantial skills shortage in the fintech sector. This is especially so given that a LinkedIn Workforce report states that recruiters have already witnessed a decrease in tech graduates moving to the UK since the Brexit vote.

Brexit-proofing your workforce

• The first step is to audit your current workforce to identify those affected by Brexit. Ensure you also consider family members of European nationals – for example, an Australian national may be here as the family member of a European national.
• Check that your current employment contracts clearly state that employment is subject to the right to work in the UK.
• Look out for updated guidance on immigration issues as the deadlines mentioned above are likely to change following delays to Brexit.
• Ensure that your workforce is aware about the need to apply under the EU Settlement scheme by the deadline – review the online EU Settlement scheme Toolkit.
• Decide what level of support the business wants to provide. Many employers are offering practical support and resources to their employees to guide them through the process (e.g. immigration workshops or briefing notes).
• Undertake full right to work checks on all employees shortly before the relevant deadline, as currently published (i.e. 30 June 2021 if there is a deal and 31 December 2020 if there is no deal) to ensure they still have the right to work in the UK.
• Consider applying for a Tier 2 sponsorship licence if the business does not already hold one to enable you to sponsor EEA and non-EEA nationals in the future.
• Urgently re-evaluate your talent pipeline to minimise the impact of a potentially reduced talent pool – it would be simpler to transfer any EEA nationals/family members to the UK sooner rather than later.

Continued access to overseas talent will be crucial if the UK wants to retain its leading global standing in the fintech and banking sectors. Fintech businesses would be wise to take necessary measures today: protecting your current workforce now and preparing for what lies ahead should mitigate risks and pay dividends in the future.

Jackie Penlington, managing associate, Stevens & Bolton LLP