Brexit impact

Food firms to pay ‘£2,675 for every foreign worker’

05-Jul-2016 - Last updated on 06-Jul-2016 at 11:32 GMT

Food firms could face a bill of at least £2,675 to recruit every foreign worker

Food businesses face a bill of at least £2,675 to recruit every foreign worker, after the UK leaves the EU, warns law firm Simpson Millar LLP.

The bill to recruit workers from mainland Europe – who currently account for 100,000 people or a quarter of the industry’s workforce – could, alone, total an extra £267.5M.

The firm’s head of immigration Emma Brooksbank said: “Brexit has prompted a surge in enquiries to immigration lawyers with businesses and workers concerned for their future one week on from the EU Referendum.”

Simpson Millar noted a 1,100% rise in calls from businesses enquiring about employing foreign workers, which faced significant new bills, as the UK exits the EU.

There was a similar rise in the number of enquiries from EU migrants hoping to secure permanent residence in the UK.

“If the UK removes the current exemptions for EEA [European Economic Area] nationals and ceases to be a signatory to 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,” said Brooksbank.

2,000,000

The number of non-UK nationals from EU countries working in Britain.

Office for National Statistics

‘Very expensive exercise’

“This can quickly become a very expensive exercise.”

Under Tier 2, an employer needs a sponsor’s 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, which currently stands at £575 for entry clearance and £664 for leave to remain.

Also the Immigration Act 2016 imposes an immigration skills charge which was due to be introduced in April 2017. The charge could now be brought forward, predicted Brooksbank.

Charge of £1,000

The plan is for businesses that recruit from overseas to pay a charge of £1,000, or £364 for small business (SMEs), for every employee when they apply for entry clearance or leave to remain. They would usually pay the charge twice in the lifetime of a person’s leave under Tier 2.

“When you add up the sums, the immediate cost of taking on an overseas worker could soon be a staggering £3,250 per employee or more – and that doesn’t even take into account the cost of recruitment, legal fees and regulatory administrative costs,” said Brooksbank.

Many people and businesses were concerned about the implications of Brexit, she added. “It is the law of inevitability. I suspect we will see a record number of residence card and permanent residence card applications this summer – many from people who never thought they would need it.”

The Office for National Statistics estimated the number of non-UK nationals from EU countries working in Britain at more than 2M.

Meanwhile, an EU insider told FoodManufacture.co.uk that east European nations could insist on the right of their nationals to work in Britain before agreeing to a trade deal between the UK and EU.