Requirement for Foreign Employees to Work
With limited exceptions, any non‑British or Irish citizen, including EU nationals, wishing to work in the UK must hold valid immigration permission permitting work, and UK employers must verify this before employment begins.
Since 1 January 2021, the UK has applied a single points‑based immigration system to both EU and non‑EU nationals. EU nationals who were resident in the UK before 31 December 2020 may continue to work if they hold settled or pre‑settled status under the EU Settlement Scheme, while those arriving after that date generally require immigration permission under the points‑based system.
The Skilled Worker route is the main route for sponsored employment, requiring sponsorship by a Home Office‑approved employer and compliance with minimum skill, salary and English language requirements, and it can lead to Indefinite Leave to Remain after five years. Alternative routes are available for specific circumstances, including temporary intra‑group transfers under the Global Business Mobility: Senior or Specialist Worker route, which does not lead to settlement.
Employers that employ individuals without the right to work, or that fail to carry out compliant right‑to‑work checks, may face substantial sanctions, including civil penalties of up to £45,000 per worker for a first breach and up to £60,000 for subsequent breaches, and potential criminal liability (including imprisonment and unlimited fines) where the employer knowingly employs, or has reasonable cause to believe it is employing, an illegal worker. A statutory defence is available where compliant checks are carried out before employment commences.
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 check 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.
