The Implications Of Brexit For The US-Based Companies Operating In The United Kingdom

According to the United States Census Bureau, UK is USA’s fifth largest export market and the seventh largest import partner. Owing to a shared cultural heritage, the United Kingdom and the United States of America have a strong history of employment outsourcing and a firm trade bond.

Inevitably, Brexit would have a riptide effect on the international workforce as it represents 4 % of the global workforce, with a GDP of $2.68 trillion. US employers who have business branches and workforces in the United Kingdom might want to keep an eye out for the changes in UK employment laws and immigration policies.

Brexit, Immigration Law and Employment Law: Potential Risks

While the UK does have customary trade practices independent of the EU, a major portion of the labor and employment policies in effect are rooted in the EU case laws. Some of such legislative examples include family rights laws, agency worker regulations, anti-discrimination laws and working time laws.

#1. Free Movement of Labor Restrictions Will Influence Global Talent

The British government has been clear on its decision to end the Freedom of Labor movement as soon as the country officially leaves EU. (Jo Faragher, 2018). This will have significant impact on multinational businesses in the country.

According to reports, 30% of the people working in the Visual Effects Industry and 25% of the entire population of Architects are UK immigrants. Businesses in the UK are heavily reliant on international talent to provide creative and technical work and with the restrictions imposed post-Brexit on the free movement of labor, global talent will not retain the same fluidity and ease that it had pre-Brexit.

The differences in the employment and labor laws between the UK and other EU-countries complicates the operations for the US-based companies, who will have to learn and comply to a completely different set of standards in both setups.

The Solution: Outsourcing to a reliable PEO service provider, who will not only update your company on important legislative changes, assist your company through the global talent hiring and management process, and ensure full global HR compliance but also sponsor work permits for US expats to work in the UK or anywhere else in the EU.

#2. EU-specific HR Contractual Terms and Policies Will Need to be Revamped:

While it is highly unlikely that the UK will completely change all the EU-based labor and employment laws that are completely immersed in their legislative practices, they are no longer binding on the UK. Contracts based on EU-originated laws, particularly those which are likely to change like the freedom of labor movement, do not have the same binding strength as before.

Consequentially, contractual disputes are more likely to occur owing to amendments in the clauses previously dependent upon EU policies. Parties may claim partial performance, or look to amend the existing contractual obligations.

The Solution:

Hiring a reliable global PEO service provider to help your companies revamp HR contractual terms and policies will save time and money, allowing you to focus completely on growing the business. All updates regarding legislation, risk compliance and HR will be handled under HR manager administration.

Recommendations:

  • With so many complications involved in the process of moving US as well as EU citizens for employment in the UK, a good alternative might be to hire UK and Europe citizens to work for US-based businesses remotely.
  • Business policies, employment entitlements, employee handbooks, and various other contractual provisions should be revisited by the employers and updated to the business’s benefit.
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