Post-Brexit Impact on UK and EU Employers

After being in place for most of 2020, the Withdrawal Agreement between the UK and EU, has now expired. Decided upon at the final hour, a trade agreement was finally reached and approved by the UK and EU- now, the EU-UK Trade and Cooperation Agreement is live as of January 1st, 2021. This new agreement is especially important for businesses employing workers in the UK and EU.

Here’s what employers need to know:

  • Free movement of people has ended – UK nationals wanting to live and work in any country member of the EU will now have to go through the same steps as a citizen from any other country for obtaining a visa or a work permit. The same applies for any EU Member State national coming to the UK. – Note: A visa/work permit only applies to those arriving to the UK or EU on or after 1/1/2021. Citizens who arrived in the EU and UK before 1/1/2021 will not be required to obtain a visa and have the right to work and reside there.
  • Trade in Services – Both parties have also achieved an agreement on trade in services which is better than the default rules of the World Trade Organization should there have been a no-deal Brexit. Some significant restrictions have been lifted but there is no longer the benefit from the absolute freedom of service supply between the EU and the UK as there used to be. It is important to note that the UK is a service-based economy, more than 80% of its GDP comes from the services sector.
  • Data Protection – From a data protection standpoint, fortunately, the agreement will allow the transmission of personal data between the UK and the EU without additional safeguards required for a period of 4 months (which can be extended for a further 2 months). During this period, a discretionary unilateral adequacy decision is expected to be made by the EU in relation to the status of the UK as a country with sufficient data protection standards, facilitating the exchange of personal data between EU members and the UK under GDPR.

Alternative Solutions for Employers

For some employers, these new Brexit requirements may prove challenging and the appeal of hiring independent contractors directly could become an enticing option due to a potential lack of talent in the market. However, it’s important to note that hiring independent contractors brings its own set of worker misclassification and employment compliance challenges which are likely to complicate the situation further.

Instead, a safer option may be to consider temporary resources such as an employer of record (EOR) and/or agent of record (AOR) solution. This type of arrangement would allow businesses to focus on managing the immediate impact of Brexit, overcome a potential shortfall of talent, and work towards a more long-term strategy in relation to the restriction of the free movement of people.

Ready to learn more? Discover how an EOR or AOR solution can help your business remain compliant and continue to engage talent despite Brexit, here. For organizations ready to consult with an expert, click here.

About iWorkGlobal

iWorkGlobal and its team of experienced industry experts are an authority in global workforce management. Providing its services in more than 170 countries, iWorkGlobal provides employer of record, independent contractor compliance and agent of record services both domestically and internationally—opening the globe to employers with services that make hiring, paying and managing remote employees and contractors faster and error free. These services are combined with iWorkGlobal’s proprietary and award-winning online platform, MyVista, which allows businesses to manage their contingent workforce all from one simple dashboard.

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