Brexit: What You Need to Know

February 20, 2020

After 1,300 days, three prime ministers and two elections since the first Brexit vote, on January 31, 2020, midnight in Brussels, the United Kingdom (U.K.) marked Brexit Day and began its transition out of the EU (European Union). This move formally ends phase 1, “the divorce,” and moves the U.K. into a 11-month transition period.

What’s Next?

Leaders will focus on the economic relationship between the EU, the U.K., the U.S. and other countries, which includes discussion about future trade negotiations and arrangements. In the short term, during the transition period, expect little change. But in the future, there will be implications for work councils, data and privacy arrangements, immigration, and travel for U.K. citizens living and working in the EU, EU citizens living and working in the U.K. and EU citizens visiting the U.K.

Big Ben, London

How Can Employers Best Prepare?

1 | Check your employee’s immigration status. Although essentially there is no change during the transition phase, it’s good idea to find out if you have employees in the U.K. that will need to apply for settled or pre-settled status as soon as possible. By having this information in advance, you can prevent any last-minute problems or delays. Keep your eye on your geographically fluid population. To prepare, check arrangements, documentation and the immigration status of your employees.
Lastly, think through your employee demographics, especially if you have a significant portion of employees who are casually skilled, in light of the new immigration point system. The new point threshold has yet to be introduced, but it is expected to impact the availability of lower- cost labour.
2 | Be aware of data transfers. Due to the upcoming decision on adequacy, conduct an audit of where your data is flowing. For example, if you have U.K., EU and U.S. entities, examine the type of data you are transferring in and out. It is highly likely that human resource data will in some way be flowing back to each U.S., U.K. or EU entity from your company. By knowing where exactly your data is flowing, you’ll be better prepared to respond to questions about your data system. A decision about adequacy is probably inevitable however, it is currently very political and being used as a negotiation tool for a future trade deal.
3 | Practice good employee relations. Reassure employees about their employment status and explain that, particularly during the transition period, many things will look very similar to what they are used to. Prepare and make available a FAQ document to address common questions you anticipate.
4 | Understand the impact for business travelers. For now, during the transition period, business travel is not impacted by Brexit. However, as of January 1, 2021, outbound U.K. and inbound EU travelers will need a visa or waiver to travel in and out of the EU. The EU is looking to introduce an electronic system entitled ETIAS, or “EU Travel Information & Authorization System.” ETIAS would be effective for 3 years at a low cost and good for short stays in some 60 eligible countries, including the U.K.

Although the U.K. has left the EU, the impact of Brexit is far from over. It’s important to be prepared for the ongoing negotiations to come, as they may generate other modifications.