HR · 1 July 2016

Small firms fear hike in recruitment costs after Brexit

visa
Recruitment costs could rise for many business owners continuing to hire from EU states

The cost of recruiting could shoot up for many of Britain’s small business owners following the vote on Brexit, as the price of hiring a European worker may become vastly more expensive.

Enquiries to immigration lawyers from business owners and workers concerned over their future have surged in the week following the historic referendum, and employment law experts have warned company owners that the bill for recruiting an employee from outside the country could reach more than £3,000 in the future.

According to head of immigration at national law firm Simpson Millar, Emma Brooksbank, an increasing number of EU migrants have sought to secure permanent residence in the UK since the country voted to leave on 23 June, while more and more businesses – faced with potentially significantly higher tariffs – have voiced their concerns.

Explaining some of the changes that may occur, Brooksbank said: “If the UK removes the current exemptions for European Economic Area (EEA) nationals and ceases to be a signatory of the treaties which enshrine the rights of free movement in the EU, companies would likely need to navigate Tier 2 of the points based system to recruit from the EU, which can quickly become an expensive exercise.”

She went on the say: “Under Tier 2, an employer needs a sponsors’ licence which carries a one-off cost of £1,476. For each employee, they also need a certificate of sponsorship which carries a fee of £199. The employee needs to apply for their visa but often the employer meets this cost too which currently stands at £575 for entry clearance and £644 for leave to remain.

There are more than two million non-British nationals from other EU member states currently working in the UK, according to the ONS. A sharp rise in the costs involved with hiring and retaining these workers could have drastic negative implications on the economy, and would stand to it smaller firms the hardest.

Why has Britain’s self-employed community pushed for an over-haul of the UK visa system?

Sign up to our newsletter to get the latest from Business Advice.


 
TAGS:

ABOUT THE EXPERT

Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.

Insurance