Globalization Partners

Brexit: The Potential Employment Impact

by Globalization Partners
July 2016
Reading Time: 2 minutes

BREXITThe big question as Brexit sinks in is, “What happens to employees already working across borders?”

With the vote to leave the EU fresh on everyone’s mind, many organizations looking to expand to the UK or any of the other EU 27 countries have questions about the potential long term impact on their hiring practices.

The big question as Brexit sinks in is, “What happens to employees already working across borders?” In particular, the near seamless ability for UK and EU citizens to transit borders for work. The Oxford Migration Observatory estimates that there are approximately 1.9 million EU-born immigrants working in the UK. Many experts postulate that these people are at risk when the two-year exit period expires if they don’t have a Permanent Residence Card. The Permanent Residence Card has very strict qualifications (biometric, work and other documentation) and an 85-page application. The entire process can take six months or more to complete. For organizations looking to transition critical employees who are EU nationals, the UK immigration requirements as they stand today, could be a significant barrier.

In addition, there are 1.2 million UK immigrants working in EU countries, and as the UK exits the EU, their employment status will be up in the air. The most likely scenario would be that they would be subject to a more difficult transition and like their EU counterparts, a much more complex qualifying process to stay.

Adding to the complication of employee location are the issues of employment laws largely influenced or derived in the EU. Many of these govern pay, leave, bonus structures and the like. These laws will likely be revised and potentially repealed in an attempt to deregulate the UK labor market – reducing the talent pool and confusing hiring managers around the globe in the process.

Understandably, all of this uncertainty has caused a good deal of angst about hiring in the UK and EU. At Globalization Partners, we are assisting our clients with moving their hiring plans forward in a way that minimizes the risk and keeps their global hiring strategies intact. Many are finding that by utilizing a global PEO and having a lighter footprint in the UK and EU, they can still make the perfect hire without having to make too much of a commitment upfront.

Eventually, time will reveal how the UK and EU work together. As the exit process unfolds, the ensuing two years will be a chaotic time. Our focus is on remaining compliant with employment law and payroll taxes, and keeping up to date as the situation evolves. Our mission is still the same: continue to support our clients’ expansion plans worldwide in the EU and beyond.

Are you planning to make a near-term hire in the UK or EU? We can help.

Globalization Partners

Globalization Partners

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