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01. Hiring Practices
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United Kingdom

01. Hiring Practices

Requirement for Foreign Employees to Work

EU nationals have previously had the right to enter, remain in and work in the UK without a UK visa. This right ended on 31 December 2020, and EU nationals arriving in the UK after this date are subject to the same immigration requirements as non-EU nationals. Any EU nationals living and working in the UK before this date could have made an application under the EU Settlement Scheme by 30 June 2021, and could register for Settled Status (if they had been in the UK for 5 continuous years) or Pre-Settled Status (if they had been in the UK for less than 5 years).

From 1 January 2021 in most cases non-UK nationals seeking entry into or permission to remain in the UK for the purpose of employment must apply under the Sponsored Skilled Workers (“SSW“) framework of the Points Based System (“PBS”), which replaces the Tier 2 (General) route.

Applications under SSW can only be sponsored by Home Office approved UK-based employers on behalf of the person they wish to employ. Employers must ensure that the role for which they are recruiting is sufficiently skilled and meets the minimum salary threshold requirement, and that anyone coming to the UK meets the relevant English language requirements. All applicants must also meet the new Good Character requirements which means, for example, that they do not have a custodial sentence of at least 12 months.

The previously applicable Tier 2 (General) route could lead to Indefinite Leave to Remain (“ILR”) after five years’ lawful residence in the UK, and its successor, the SSW route is also a route that leads to ILR.  Alternatively, UK employers can use the Global Business Mobility: Senior or Specialist Worker route (“GBM”) (previously Intra Company Transfer (“ICT“) route) for temporary transfers of those already employed by a group company outside the UK.  Like its predecessor ICT, GBM visas do not lead to ILR.

An employer (and any individual found personally at fault) that employs workers illegally may face criminal and civil sanctions. Where the employer continues to employ someone having “reasonable cause to believe” that they have no right to work in the UK, they face a possible custodial sentence up to a maximum of 5 years and an unlimited fine. Where the employer is found to be employing someone illegally and fails to conduct the requisite “Right to Work” (“RTW”) checks, the employer may face a civil penalty up to a maximum of GBP 20,000 per illegal worker. There is a defence to a civil penalty if the employer can show it had carried out the appropriate RTW checks prior to the commencement of the worker’s employment.

Does a Foreign Employer need to Establish or Work through a Local Entity to Hire an Employee?

Foreign employers are not required to establish, or work through, a local entity in order to hire employees in the UK. How any tax and national insurance contributions will be dealt with will depend on the circumstances and advice should be sought in relation to this.  Care should also be taken that a permanent establishment is not inadvertently created that would mean that trading income derived from the employee’s activities would be subject to the UK tax regime.

Limitations on Background Checks

There are certain background checks that must be carried out before hiring an individual. Employers have a duty to prevent illegal working in the UK by carrying out prescribed document checks on candidates before employing them to ensure they have the right to work in the UK.

As regards criminal records checks, employers may seek information about an individual’s criminal records history by:

  • Voluntary disclosure – asking the individual directly about their criminal convictions history.
  • Official criminal records checks through the Disclosure and Barring Service (“DBS”) – carried out by the employer or through a registered body.

Most spent convictions do not need to be disclosed to an employer even where there is a direct request for that information or a contractual requirement to disclose it, except in relation to a number of excepted occupations, offices and professions.

The processing of data relating to criminal convictions and offences is restricted under the UK GDPR and Data Protection Act 2018. The guidance issued by the Information Commissioner’s Office provides that the legal bases for processing such data include consent, where the processing is necessary for performing obligations in relation to employment, or where the processing is necessary for the prevention or detection of unlawful acts. However, the onus will be on the controller to determine what is necessary in the specific circumstances and as consent needs to be freely given, and employers are in a position of power, they may not be able to rely on this, so another legal basis will likely be needed. The fact that consent is required for a DBS check does not mean that that consent will be a valid lawful basis for data privacy purposes. Many of the legal bases require the employer to have an “appropriate policy document” in place. This must be maintained for at least six months after the processing and must be kept under review.

Where the legal basis relied on is based around using the data for a specific purpose it is important that employers critically assess whether their use of the data is necessary and proportionate to that purpose. In addition, in most cases, employers will need to carry out a data protection impact assessment where they are processing criminal offence data.

It is a criminal offence for an employer to require an individual to obtain a copy of their criminal records by means of a subject access request as a condition of employment, or continued employment.

Restrictions on Application / Interview Questions

In recruitment, employers are prohibited from discriminating against actual and potential job applicants because of a “protected characteristic” (see V. Anti-discrimination Laws). Employers must ensure that discriminatory practices are not used during the recruitment process, which includes job advertisements and the interview and selection process.

It is generally unlawful for an employer to ask about the health of a job applicant, or about any disability they may have, before making an offer of employment.

There is no legislation that specifically deals with social media use in recruitment, but when using social media to assess the suitability of potential new recruits, employers need to take care not to discriminate unlawfully. Another area of risk for employers relates to data protection. Some information about an individual that is available through a social media site will constitute personal data and in some cases, it will amount to sensitive personal data under the UK GDPR. Employers will need to ensure that they are complying with their data protection obligations if using this information during the recruitment process.

Employers should keep clear and objective records of job applicants, focusing on the extent to which each candidate’s qualifications, skills and experience matched up to the requirements given in the job specification.

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