The end of freedom of movement means you need to upskill your existing workforce, but how else is Brexit impacting work?

On 24 December 2020, UK and EU governments settled a trade deal called the Trade and Cooperation Agreement (TCA), helping to determine the future trading relationship between the two. This deal impacts organisations in many ways – affecting trade, supply chains and workforces as a result. Here we take you through the main impact that this deal has on organisations, and what this means for leaders and payroll teams.

 

What does Brexit mean for trade?

Now that the UK has left the EU, this has also meant leaving the customs union. However, the UK secured a trade deal that allows UK businesses to continue tariff-free trade with EU neighbours. For businesses that trade with others in the EU, this means there is no tax on goods (tariffs) or limits on the amount that can be traded (quotas) between the UK and the EU.

If organisations export or import goods, these goods must qualify for tariff-free trading or ‘preferential treatment’ under the terms set out in the TCA.

Businesses also need to be aware of new procedures at ports and the new paperwork they need to complete.

 

How is the workforce impacted?

When focusing on the impact of Brexit on the workforce, organisations need to be aware of the changes to freedom of movement.

On 1 January 2021, freedom of movement between the UK and EU ended. If EU citizens are already living in the UK but haven’t applied for settlement under the EU settlement scheme, they need to do so by 30 June 2021.

If your workforce is made up of EU citizens, take the time to check in with them and find out if they have applied for settlement – if they haven’t, make them aware of the deadline and what they need to do.

Under the post-Brexit immigration laws, both EU and non-EU migrants will be subject to a point-based system for visa eligibility. A large part of this will be based on a job offer from an approved employer sponsor. This provision accounts for fifty points. The other twenty (seventy points are needed for eligibility) will be determined by various factors such as level of education.

This change to visa eligibility means organisations have to look for different ways to create a skilled workforce (if they can’t hire skilled EU migrants) and could create a short-term shrinkage in the workforce. As a result, organisations should focus on upskilling existing employees or bringing in young apprentices in order to fill the skills gap.

 

What does this mean for payroll teams?

From the finance and payroll team to HR and senior leadership, many departments have to deal with the impact of Brexit.

Payroll teams in particular need to stay updated on all Brexit related news in case any changes to pay come about. It’s crucial to also work closely together with HR teams to identify any issues or upcoming issues for employees who are EU citizens and to support them during these periods of change.