Brexit Guide: How to Minimize the Risks with a Global PEO
There is no doubt that the UK’s withdrawal from the European Union has upset the apple cart of international businesses. Brexit has brought about numerous changes on both sides of the English Channel, and businesses are scrambling to keep up. In particular, EU and EEA companies that are looking to expand, employ or retain employees in the UK will have to make some key adjustments.
Our Brexit Guide for Employers will bring you up to speed with the most important changes that need your immediate attention, and offer some solutions for making a smooth transition to the new rules of business engagement in the UK post-Brexit.
Business Challenges in Post-Brexit UK for Global Employers
On December 24, 2020, the EU and UK reached a trade agreement that outlines and details the terms of doing business between the two entities. On the European side, EU and EEA global businesses will be impacted in multiple areas:
New Travel Restrictions
Business personnel traveling between EU and EEA countries and the United Kingdom will now need a current government-issued visa to enter the UK and remain in-country.
Deadline for EEA and Swiss Nationals to Register for UK Immigration
EEA citizens and Swiss nationals who lived in the UK prior to December 31, 2020, now have until June 30, 2021, to register for immigration status if they wish to remain in the UK under the EU Settlement Scheme. To fully qualify for immigration, they must reside continuously in the UK for five years, after which they must submit an additional application. Failure to meet the June 30 deadline will result in expulsion from the UK.
Employers are now required to conduct right-to-work checks
As of June 30, 2021, businesses employing EEA or Swiss nationals will be required to run right-to-work (RTW) checks on those employees. In the past, simply viewing the EEA/Swiss employee’s passport or national ID was sufficient to establish RTW, but citizens of those countries are not issued hard documents that satisfy RTW requirements. Now, beginning July 1, 2021, employers will have to use the online RTW website provided by the UK government to verify EEA/Swiss right-to-work status. RTW verification is a complex multi-step process that puts the onus of RTW on the employer. Failure to comply can result in civil and/or criminal penalties for the employer.
New requirements for EU and EEA business registration and entity formation in the UK
Under the new trade agreement guidelines, certain EU entities will no longer be allowed to register in the UK, including Societas Europaea (SEs) – the European equivalent of an LLC – and European Economic Interest Groups (EEGs). In addition, EEA companies that were previously registered in the UK will now be treated like all other overseas companies and will be required to report additional information to the UK’s Companies House.
New regulations impacting the relocation and immigration of personnel
EU nationals living inside the UK face as yet unknown challenges concerning their employment status and contractual agreements, with the possibility of deportation. Employee misclassification can become a thorny subject for businesses, with no clear answers and potentially harsh consequences.
A new provision on workers’ rights
Both EU and UK business entities are required to implement similar rules concerning workers’ rights, such as those implemented in the Netherlands.
New provisions regarding social security
Under the new regulations, employers’ social security contributions for employees will be paid to the employees’ home state, in accordance with local requirements. For companies employing workers from multiple countries, compliance will likely pose an HR challenge. In some cases, employers may have to register with local authorities in the employee’s home country and make arrangements there for local payroll and social security contributions.
Considerations for EU and EEA Global Employers
In addition to complying with the many provisions of the new trade agreement, international companies employing workers in the EU, EEA and UK will have to sort out intricate details of new employment laws that affect the legal status of their workers, rules concerning the residency of employees’ family members, and the different rules applying to EU vs EEA workers. In addition, the agreement establishes a plethora of deadlines that must be met by businesses in a timely manner.
Needless to say, global businesses will be challenged to meet the requirements that apply to their permanent workforce and temporary contractors, or run compliance risks that can result in fines and penalties. But there is good news for EU and EEA businesses planning to operate in the UK and employ and retain their employees without undue headaches. Acumen International Global PEO solution offers an innovative approach to global hiring that paves the way for a smooth transition post-Brexit.
How a Global PEO Solution can Help EU Businesses Transition Post-Brexit
December 31, 2020 marked the end of Brexit’s implementation period, and the beginning of massive changes in how non-UK workers can continue to compliantly live and work in the UK.
EU Settlement Scheme
EEA/Swiss citizens and their family members already residing in the UK must apply for settled or pre-settled immigration status by June 30, 2021.
Individuals already working in the UK during the implementation period but living in the EEA will be granted frontier worker status, so long as their work is “genuine and effective,” and must return to their country of residence at least once every six months. After June 30 2021, frontier workers must present a digital confirmation of their status, which they must apply for prior to that date.
Immigration after the Implementation period
EEA and Swiss workers not eligible under the EU Settlement Scheme will have to apply for one of two types of work visas. The first is a skilled work visa. To qualify, the worker must have a minimum skill level of RFQ Level 3, and must meet the English language requirement. The second is an intra-company transfer visa for employees currently working for international employers at their branches in the UK.
In addition to regulations governing residency and work permits, the UK will implement an electronic travel authorization (ETA) system where individuals entering the UK from the EEA will have to apply online and pay a fee to gain entry to the UK.
To some, the UK’s exit from the EU on the heels of a global pandemic seems like an untimely move that only makes things more complicated for the global business community. But others see Brexit as the perfect opportunity to remodel their businesses to align with new trends toward remote work, telecommuting and technological innovation.
Acumen Global PEO offers the perfect solution for companies caught in the crosshairs of Brexit, allowing you to:
- Continue your global business projects without interruption or loss of talent.
- Scale your business and outpace your competitors by leveraging our innovative PEO solution.
- Compliantly recruit, employ, and compensate the world’s best global talent.
- Meet compliance requirements for EU and EEA workers residing in the UK.
- Meet the post-Brexit UK HR compliance demands of the trade agreement without fear of fines or penalties.
With Acumen’s Global PEO solution, you can confidently expand your global presence, knowing that your business interests in the UK will be protected post-Brexit and beyond.
Acumen International – Your Global PEO Provider
Whether you need global employment solutions for hiring and compensating your selected global workforce in the UK or an ex-pat hiring solution to onboard citizens from your home country, Acumen International Global PEO can help.
As an experienced and recognized leader in the global employment industry, Acumen has the tools and connections to make your post-Brexit transition go smoothly, so you can focus on your business. Acumen’s global infrastructure extends to 190 countries, giving you endless opportunities to make a global footprint, anywhere in the world.
Our solution can help you to rapidly expand into a new country since you will not have to wait until your business entity is legally established there before you begin hiring employees. For more information on the cost of hiring in the UK, visit our website to get Acumen’s Express quote now.