How changing immigration laws affect licensed employers and their EU workforce

What changes must hospitality businesses employing EU staff be aware of ahead of post-Brexit immigration regulations taking effect from 1 July 2021?

2 June 2021

The hospitality trade has traditionally relied heavily on an EU workforce. By 30 June 2021, all EU nationals who moved to the UK before 31 December 2020, must have applied to the UK’s EU Settlement Scheme.

This article will look at the implications of the end of free movement between the UK and EU, and answer key questions from licence holders who might need support with immigration issues from 1 July 2021 onwards. It will also outline some of the potential consequences if licensed premises are found to be in breach of immigration regulations.

What do hospitality businesses need to know about new Right to Work requirements for EU nationals from 1 July?

The six-month post-Brexit grace period is ending on 30 June 2021, which means that from 1 July 2021 any new EU hires need more than just an EU passport or ID card to show that they have the right to work. For many, this will be in the form of limited or indefinite leave to remain under the EU Settlement Scheme, also referred to as pre-settled or settled status.

Any business employing EU nationals should encourage these staff members to make applications under the EU Settlement Scheme, as the window for making these applications ends on 30 June 2021.

The Home Office has been clear that it is not expecting employers to undertake fresh Right to Work (RTW) checks on staff from 1 July 2021, and while failing to conduct a RTW check is not a breach of the law, employing an illegal worker is.  An illegal worker is a foreign national who does not have the appropriate immigration permission to allow them to work in the UK. By employing an illegal worker, an employer can be faced with a civil penalty notice issued under Section 15 of the Immigration, Asylum and Nationality Act 2006, which can amount to up to £20,000 per illegal worker. Since 2016, employing an illegal worker is also a criminal offence.

Conducting a RTW check on all workers in compliance with Home Office guidance ensures a statutory excuse against a civil penalty if it later transpires that a worker was in the UK illegally, for example if they had shown a fraudulent document to their employer.

Conducting compliant RTW checks is also a requirement for all sponsor licence holders, and failing to do so can lead to revocation of a sponsor licence. A sponsor licence is a licence issued by the Home Office to enable employers to sponsor foreign workers to obtain work visas.

What do I need to know when recruiting EU nationals?

Many EU hospitality staff moved out of the UK during the pandemic, leaving lots of premises now looking to reopen understaffed. Employers looking to hire from the EU must now ensure they are adhering to the regulations implemented following Brexit.

Moving forwards, recruiting an EU national will be the same as recruiting a non-EU national. An EU passport is no longer enough: the only exception to this rule is Irish nationals, who have the same right to work as British citizens.

An employer needs to:

  • Check a prospective employee’s nationality. If they are neither British nor Irish, they will need to have an immigration status (ie a type of visa) that confers the right to work in the UK.
  • Check if the prospective employee has a valid visa – many EU nationals will have pre-settled or settled status which gives them the right to work. Alternatively, they could have another type of visa such as a spouse/partner visa.
  • Remember that pre-settled status and settled status are digital immigration statuses. The UK Government has chosen not to issue physical visa documents/papers. Employers will need to use the government’s digital RTW checking system to check these statuses.
  • If the prospective employee does not have immigration permission, the employer must not allow them to commence working. In such cases, the employer may wish to consider if the prospective employee would be suitable for sponsorship for a Skilled Worker Visa.

What is a Skilled Worker Visa?

A Skilled Worker Visa is a sponsored visa. The individual needs to apply for the visa but, in order to do so, their prospective employer must hold a sponsor licence. Not all roles in the licensing trade can be sponsored.

Roles a business can fill through sponsorship are:

  • catering and bar manager and steward (club);
  • chef and chef-manager; and
  • licensee, manager in wine bar and publican.

Roles that cannot be sponsored are:

  • waiters and waitresses (including head waiter); and
  • bar staff (including bar supervisor).

In addition, to qualify for a skilled worker visa, the role must fulfil the following requirements:

  • the role must comply with skills threshold;
  • the role must pay more than the salary threshold of £25,600 (applicable across the UK) or £20,480 if the applicant is under 26, and the threshold relating to particular roles (for a licensee the rate is £20,700 and for a chef it is £18,900);
  • the applicant must meet English language requirements at an intermediate level across reading, writing, listening and speaking; and
  • the applicant must have no adverse immigration or criminal history.

How difficult is it for businesses to obtain a sponsor licence?

Normally the process is quite straightforward, although it is potentially more difficult for hospitality sector businesses that the Home Office perceive as high risk due to the prevalence of illegal working in the industry (see for example the latest statistics on civil penalties for illegal working in Scotland and Northern Ireland – 100% of civil penalty notices for illegal working issued between 1 July and 30 September 2019 were to the hospitality industry).

How can a business apply for a sponsor licence?

An application is initiated via an online form and payment is made to the Home Office.

The business needs to provide evidence that it is a genuinely trading organisation and explain why it wants the licence.

Will my application for a sponsor licence be refused?

The Home Office usually grants sponsor licences if all of the required evidence has been provided and the Home Office is satisfied that the employer understands and will comply with all sponsor duties, but there have been instances where the Home Office refused to grant licences. Sometimes, the Home Office will only grant a licence after it has carried out a pre-licence visit to check that the business can meet its sponsor licence duties.  

If a licence application is refused, challenges to this are limited and, in the vast majority of cases, the business also faces a cooling-off period where it cannot re-apply for a further six months after the refusal.    

What does being a sponsor licence holder involve?

The underlying principle is that those who benefit from sponsorship should play a part in helping immigration control: essentially, employers are required to become immigration gate-keepers. The licence holder must:

  • comply with sponsor duties;
  • consider it an ongoing obligation;
  • report certain events in the employee lifecycle, such as role changes, absences, or departures;
  • keep meticulous records; and
  • have a genuine vacancy.

What are the costs and expected timescales of applying for a sponsor licence?

The process costs £1,436 or £536. The lower fee is available to companies that are considered to be small companies or charitable organisations.

Usually there is an eight-week turnaround when applying for a sponsor licence, but at peak times applications can take longer to process. Applicants can pay £500 for a fast track service.

After a licence is obtained, the employer must issue a Certificate of Sponsorship for the specific role that they wish to sponsor a worker for. This comes at a further cost, and the employer must pay something called the Immigration Skills Charge. There are also visa costs for the migrant worker. Some employers support their staff with their visa costs, others do not.

What happens if a business employs an illegal worker?

It is a criminal offence if an employer is found to have been employing an illegal worker.

This is relevant to those working in the hospitality industry who are also the holders of a premises (liquor) licence. That is because section 43 of the Licensing (Scotland) Act 2005 requires the holder of a premises licence to notify the Licensing Board of a relevant offence. An offence under the Immigration Act 1971 (illegal working) is a "relevant offence", as is aiding or procuring that offence. A licence holder must notify the Licensing Board of details of any relevant conviction within one month of the date of the conviction. A failure to do so is, of itself, a criminal offence!

Once a Licensing Board receives notice of a relevant conviction, it will give notice to the Chief Constable. 

If the Chief Constable (or the Licensing Board) considers that the details of the conviction are such as to disclose conduct that is inconsistent with the Licensing Objectives, then the Licensing Board may proceed to make a licensing board review proposal. This could lead to the licence holder’s premises licence being varied, suspended or revoked.

What do I need to know about Designated Premises Managers (DPM)?

  • No alcohol can be sold on a premises where there is no DPM or the DPM does not hold a valid personal licence.
  • Every sale of alcohol must be authorised by a DPM or a personal licence holder.
  • If a DPM has been working with a business for several years, he or she may be the holder of a personal licence that has not yet expired. However, the DPM may also now no longer have a right to work in the UK. It would be a criminal offence for that DPM to work, or for the employer to allow them to work. Since a premises licence requires there to be a DPM in position, and it is doubtful that an illegal worker could ever be competently appointed as the DPM, there is a risk any changed immigration status of the DPM would then place the licence and the licence holder in jeopardy of breaching the mandatory licensing conditions.

Key takeaways for employers in the hospitality sector

  1. Review Right to Work practices
  2. Apply for a sponsor licence if employing or considering employing EU nationals
  3. Review HR policies with regards to mobility
  4. Review the terms of your licence, in particular the Designated Premises Manager

This material is for general information only and does not constitute legal advice. Professional advice appropriate to a specific situation should always be sought.

For further information regarding immigration, please contact Jacqueline Moore or John Vassiliou. For licensing queries, please contact Kevin Clancy.