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Employing Foreign Workers (Guide for Employers)

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The end of EU freedom movement and the introduction of a new UK immigration system from 1 January 2021 will impact employers and recruitment in the UK. The reforms will see a new points-based system applicable both to EU and non-EU nationals looking to come to the UK.

EU citizens who are already in the UK by 31 December 2020 will not need to apply for a visa under the new system, provided they have registered under the EU settlement scheme by 30 June 2021.

Employers must continue to conduct Right to Work document checks on all new employees, and existing employees where relevant, regardless of nationality to avoid breaching the prevention of illegal working rules.

Employing foreign workers after 1 January 2021

To recruit non-UK resident workers from January 2021, you need to have a skilled worker licence.

This means applying to the Home Office for a sponsor licence. The Home Office recommends that employers start the application process for their licence now, if they wish to employ EU workers from January 2021.

The application requires considerable detail about your organisation, including showing that you are able to meet the compliance duties of hiring a sponsored employee in your workplace. Therefore, amongst other things, you have to be able to prove that you have a well-organised and efficient HR department.

Once you have the licence you still have to pay the Immigration Skills Charge, which currently costs £364 if you are a ‘small’ employer or £1000 if you are a medium or large employer per twelve-month visa per worker. The government has said that the Immigration Skills Charge will continue to apply under the new regime from January 2021.

Once you have obtained your licence from the Home Office you can start to advertise the role and potentially recruit from overseas. If you decide to hire an overseas candidate you must issue them with a Certificate of Sponsorship. This will set out the job role, salary and start date.


UK skilled worker visa 

The most common UK work visa is the skilled worker visa. This is granted to individuals who are sponsored by a UK employer and who meet certain criteria to attain points.

In order to be eligible to apply for a visa, your potential employee must score 70 points in the government’s points-based system. This is calculated as follows:

Characteristics Tradeable Points
Offer of job by approved sponsor No 20
Job at appropriate skill level No 20
Speaks English at required level No 10
Salary of £20,480 (minimum) – £23,039 Yes 0
Salary of £23,040 – £25,599 Yes 10
Salary of £25,600 or above Yes 20
Job in a shortage occupation (as designated by the MAC) Yes 20
Education qualification: PhD in subject relevant to the job Yes 10
Education qualification: PhD in a STEM subject relevant to the job Yes 20


In addition, some elements are ‘tradeable’. For example, if the employee is not going to earn enough to receive any points, they can trade this for a PhD in a relevant subject.

The visa is granted for up to five years – its length depends on for how long you wish to sponsor your employee, i.e. how long you expect to want the employee to remain in their post.

There will be, as now, a shortage occupation list published by the government. If a job is on that list then the applicant will receive 20 more points for that, which could also be used to trade against a lower salary. Currently, a large number of jobs in science, engineering and the NHS are on this list.

For the most highly skilled, providing they have the required number of points, it may be possible under the new arrangements for them to come to the UK without a job offer. Such people must be endorsed by a relevant or competent body. This has been extended for the so-called STEM subjects, but the government intends to keep it under review.

Alternative UK work visa options 

A number of work visa options are available but suitability will depend on a number of factors, including the individual’s reason for coming to the UK, intended duration of stay among other factors.

For example, the Home Office is creating a new Health & Social Care visa for healthcare professionals, while the intra-company transfer visa will continue under the new regime. The Tier 5 (Youth Mobility Scheme) Visa scheme is for 18-30 year olds from a number of non-EU countries to work in the UK on a short-term basis.

There will be no work visa for ‘lower skilled’ occupations.


What if you already employ EU workers? 

Employers of EU nationals are advised to support their workers in safeguarding their lawful status in the UK by registering for settled status before the final deadline of 30 June 2021. It is free to apply.

Provided the worker has started to live in the UK by the 31 December 2020, they will usually receive either settled or pre-settled status. With either settled or pre settled status, the worker is allowed to work in the UK free from immigration control.

Employers should also note that they continue to be subject to the prevention of illegal working regime, which requires them to verify a worker’s right to work in the UK.

There are civil and criminal penalties if you employ a person illegally, i.e. someone who does not have the right to live and work in the UK.

You will commit a criminal offence if you employ someone when you have reasonable cause to believe they are an illegal worker. If found guilty you could face an unlimited fine and up to two years in prison.

If you are prosecuted under the civil scheme for employing an illegal worker you could be fined up to £20,000 per illegal worker. Your business may also be shut down if you are found guilty of employing an illegal worker and have received penalties for the same offence already.

Employing foreign workers FAQs

How do I employ someone from outside the EU?

Yes, you can employ someone from outside the EU. However, you will have to have an employer’s sponsor licence from the Home Office to do so, and the job and the potential employee themselves will have to meet certain criteria under the UK’s points based immigration system. From January 2021, a new points based system will apply to all overseas workers, regardless of whether they are from the EU or outside the EU.

Can a UK company employ someone from abroad?

Yes, a UK company can employ someone from abroad. Until 31 December 2020, if that person is a citizen of the EU then there are no restrictions on their ability to come to the UK to work. If the person is from outside the EU then they will have to apply for a visa in order to work in the UK, and their employer will have to be licensed by the UK government in order to employ them. From 1 January 2021, all workers from overseas (both EU and non EU) will have to qualify for a visa under the UK government’s points based immigration system.

How do I pay a foreign employee?

You must pay a foreign employee working for you in the UK through the PAYE system and make National Insurance deductions for them in the usual way. This applies whether they are working for you on a temporary or permanent basis. Seconded employees must also be included in the PAYE system even if you do not actually pay them. They will receive a different tax code depending on, amongst other things, how long they intend to stay in the UK.

Do EU workers need a UK visa?

EU workers do not currently need a UK visa to work in the UK. However, from 1 January 2021 the rules are changing. After this date, all non-UK residents wanting to come to the UK to work will be subject to the new points based immigration system. If an EU worker was already living and working in the UK by 31 December 2020 they can apply for settled status. This should be granted provided that they have lived in the UK for a continuous five year period. If they have settled status then they will not need a visa.


Last updated: 22 July 2020

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