With Brexit less than a year away, we provide a summary of the latest position on EU workers' rights and what employers should do now to prepare for the UK's departure from Europe.

Latest position on future status of EU nationals

EU citizens who arrive in the UK before 29 March 2019

On 8 December 2017, the UK Government reached an agreement with Europe on EU citizens’ rights, which related specifically to EU nationals who arrive (or who are already) in the UK prior to the Brexit date (ie 29 March 2019). We set out below a summary of the key points that have been agreed.

  • EU citizens who, by 29 March 2019, have been continuously and lawfully living in the UK for 5 years will be able to apply to stay indefinitely by getting ‘settled status’. That means they will be free to live in the UK, have access to public funds and services and go on to apply for British citizenship (once they are eligible to do so).
  • EU citizens who arrive by 29 March 2019 but have not been living in the UK lawfully for 5 years when the UK leaves the EU, will be able to apply to stay until they have reached the 5-year threshold. They can then also apply for settled status.
  • Family members who are living with, or join, EU citizens in the UK by 29 March 2019 will also be able to apply for settled status, usually after 5 years in the UK.
  • Close family members (ie spouses, civil and unmarried partners, dependent children and grandchildren, and dependent parents and grandparents) will be able to join EU citizens after the UK leaves the EU, where the relationship existed on 29 March 2019.

The Home Office has confirmed that there will be an online application process, which will be "streamlined, user-friendly and quick to use" and is likely to go live later this year. EU citizens will be required to provide an identity document and a photograph, and will be required to declare any criminal convictions. They will also be required to pay an application fee, which is likely to be the same as a UK passport (currently £75.50).

On 19 March 2018, the UK and the EU also reached agreement on a number of key points in the draft withdrawal agreement, one of which included an agreement on a transition period after the UK leaves the EU. The key points to note are:

  • A transition period of 21 months has been agreed, which will commence on 29 March 2019 and end on 31 December 2020.
  • During the transition period, EU nationals' rights will be protected and maintained and the free movement of workers between the UK and Europe will continue. This will also apply to EU nationals who arrive in the UK during the transition period and those individuals will be able to use that time to count towards settled status (ie the 5-year threshold).
  • All EU nationals who arrive in the UK during the transition period will have 6 months from the end of the transition period (ie until 30 June 2021) to apply for the relevant residence documentation.

After the transition period

Unhelpfully, the UK Government has not provided any clarity on EU citizens' rights after the transition period.

It was intended that the Government would issue an Immigration White Paper last summer, which would set out its proposals for post-Brexit immigration and would include key details of the new immigration policy. However, this is now unlikely to be published before October this year. The delay has attracted criticism and is, understandably, creating anxiety for EU nationals and uncertainty for UK businesses, and is preventing proper planning and recruitment. It also means that the new Immigration Bill, promised in the Queen’s Speech, is likely to be delayed.

Key action points for employers

The Home Office has stated on its website that EU citizens (and UK employers) do not have to do anything now and that they should wait for the new online application process to go live in the second half of 2018. However, to be prepared for Brexit we would suggest that the following steps are carried out by employers:

  1. Conduct an audit on the current workforce and assess the potential impact of Brexit.
  2. Encourage EU employees with at least 5 years residence to apply for permanent residence now.
  3. Reassure your EU employees that their rights will be protected.
  4. Consider any additional costs as a result of Brexit, such as a potential increase to salaries to address any skills and/or labour shortages within the business and/or any increased costs to upskill and train the current workforce.
  5. Review and update your harassment and anti-bullying policies and ensure that managers are fully trained on those policies. Brexit has given rise to an increased number of racial harassment incidents within the workplace and many EU nationals have reported claims of being bullied and harassed due to their EU status.
  6. Put together a Brexit team to carry out the above steps, to deal with any queries from EU employees regarding their status and to assist with applications when the online application process goes live later this year.

Summary

The Migration Advisory Committee published its interim report on 27 March 2018, which provides an initial assessment of the UK labour market following Brexit. The final report is expected in September 2018. The interim report highlights the concerns among many employers regarding how the UK might restrict EU workers after the transition period and how this could prevent them from recruiting low skilled EU workers into the UK, (eg if the new post-Brexit immigration policy is similar to the current system we have in place for Tier 2 migrants).

The uncertainty has already had an adverse impact on some sectors within the UK economy, such as healthcare, construction, hospitality, agriculture, retail and manufacturing, which are currently facing critical labour shortages. There is evidence to suggest that UK employers are now starting to recruit outside of the EU to fill those gaps. It has also caused concern among many EU nationals, as highlighted by the recent fall in net EU migration into the UK.

While the UK Government has provided some much needed clarity on the rights of EU workers pre-Brexit and during the transition period, there is still a great deal of uncertainty over EU workers' rights after the transition period and this is likely to continue until the Government publishes its White Paper on immigration.