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A guide for UK-based employers with staff in the EU

This article is aimed at UK-based businesses that employ staff in the EU, including UK citizens, but also EU citizens.

From January 2021, the UK’s free movement of workers arrangement with the EU will terminate and the EU (and EEA) states will introduce visa and work permit requirements regarding UK individuals working in these jurisdictions.

UK citizens resident in the EU before 1 January 2021 will have the right to remain and continue to work in the EU, if they apply for ‘Settled Status’ in their overseas EU home location in accordance with the EU / UK Withdrawal Agreement. However, UK citizens relocating to the EU from 1 January 2021 onwards will be subject to new immigration controls in the same way, and to the same degree, as other non-EU nationalities.

UK businesses with EU operations should therefore consider their talent and mobility requirements and be prepared for restricted rights to work, changes to rules on business travel and social security regarding their non-UK operations.

EU immigration arrangements after Brexit

While Blick Rothenberg doesn’t provide immigration and work permit services – though we can direct clients to lawyers in this regard, if required – the below provides a high-level summary of the work permit and visa issues that UK-based clients could face in the EU from 1 January 2021 onwards:

  • Short business trips to the EU by UK employees – e.g. to attend a trade fair or for training or to gather information for their job overseas – should typically continue to be available to UK nationals on a ‘visa-free’ basis.
  • UK nationals will continue to be able to live, work and study in the Republic of Ireland on a ‘visa-free’ basis, as the UK will retain a common travel area with the Republic of Ireland from January 2021, despite Brexit.
  • UK nationals will, however, from 1 January 2021 require a work permit to undertake meaningful work duties in the EU (though some easements may be available in particular situations on a country-by-country basis).
  • The definition of what is ‘meaningful work’ – and hence requiring a work permit to be undertaken – can differ on a country-by-country basis. UK companies should therefore understand the exact legal requirements which apply in this regard, when, for example, quoting for building and installation work in an EU state from January 2021 onwards.
  • UK-based employers will realistically require specialist legal (immigration) support, if they need to apply for work permits, etc. In some cases, they might also need to register a formal business presence in the relevant jurisdiction, before they are able to benefit from immigration quotas, etc. in that country.

Some key facts for UK employers with EU operations to consider

  1. Ensure that UK workers in the EU have complied with the applicable country-specific immigration registration and legal requirements, as authorised under the EU / UK Withdrawal Agreement.
  2. Inform your business units that sending people to the EU from 1 January 2021 will be vastly different regarding the personal and corporate risk, permitted activities and operational resilience, and speed to deployment and cost. For example, immigration costs in some cases could be in the £5,000+ range.
  3. UK businesses that need to employ or second UK nationals (or other foreign employees) in the EU, may need to establish a formal presence in the relevant jurisdiction before they can register with the local authorities as an employer for work permit applications and sponsorship licences.
  4. Identify those mobile employees amongst the current assignee population who are presently living and working in the EU, their nationalities and home countries, and that any A1 social security certificates extensions into 2021 are in place before 31 December 2020.
  5. UK businesses should continually review ongoing developments on social security cooperation between the UK and EU. It is possible that if there is no longer term agreement between the UK and the EU (or individual EU members), that workers from the UK to the EU could become liable to ‘double social security liabilities’ in due course.
  6. Strategic workforce and business planning, including:
  • Can you encourage existing UK employees to stay in the EU where possible – e.g. by assisting employees with the registration processes – as this may help reduce the need to transfer alternative UK employees to the EU?
  • Can you consider alternative workforce models (e.g. do you need to use more EU-based contract staff instead of workers posted from the UK?)
  • Should you consider whether you should bring forward the posting of staff internationally, so that they commence working in the other jurisdiction before 31/12/20
  • Is it appropriate to set up a branch or subsidiary company in the EU?
  • What are the budgetary implications of the changes?
  • If you already have business operations in the EU, can you consider transferring some of the activities presently undertaken by UK personal to staff in those locations?

How Blick Rothenberg can help

  • Reviewing workforce planning to improve where and how employees are deployed;
  • Brexit-proofing ‘work anywhere’ policies and assessing the issues associated with global remote workers;
  • Assessing the viability of travel and effective use of business travel;
  • Helping you understand the Social Security landscape and consider planning opportunities to minimize or avoid double social security liabilities;
  • Training your HR and business units re the new obligations that arise, to minimise corporate risks and encourage compliance;
  • Analysing whether any changes to your corporate structure and business model create wider tax implications for your business (e.g. regarding corporate taxes and transfer pricing requirements).

Would you like to know more?

If you would like to learn more about how Brexit may impact you, please visit our Practical Guidance: Brexit hub here.

And if you have any questions or would like to discuss your specific circumstances, please get in touch with your usual Blick Rothenberg contact or one of the partners on this page.