Brexit: Hospitality employers could face 'staggering' costs to recruit non-UK staff

04-Jul-2016 - Last updated on 26-Apr-2021 at 20:02 GMT

Immigration lawyers have seen an increase in queries from both hospitality employers and workers from Europe since the UK voted to leave the EU

Hospitality employers could be faced with 'staggering' costs to recruit and retain staff from outside the UK once it leaves the EU, an immigration lawyer has warned.

With almost a quarter of all hospitality staff currently working in the UK coming from outside it and 45 per cent of them coming from Europe, the results of the EU referendum on 23 June have left many hospitality business owners with major concerns for the future of their businesses.

Emma Brooksbank, head of immigration at national law firm Simpson Millar, said if the UK removed current exemptions for EEA nationals and opted not to allow free movement in the EU, companies would need to 'navigate' Tier 2 of the Points Based System in order to recruit staff from outside the UK, leading to a bill of at least £2,675 per employee.

“Under Tier 2, an employer needs a sponsor’s licence which carries a one-off cost of £1,476," she explained. "For each employee, they also need a Certificate of Sponsorship which carries a fee of £199. The employee needs to apply for their visa but often the employer meets this cost to which currently stands at £575 for entry clearance and £664 for leave to remain."

She added: “The Immigration Act 2016 imposes an Immigration Skills Charge which was due to be introduced in April 2017. I anticipate that this could now be brought forward. The proposal is for businesses that recruit from overseas to pay a charge of £1,000, or £364 for small business, for every employee when they apply for entry clearance or leave to remain. They would usually pay the charge twice in the lifetime of a person’s leave under Tier 2.

“When you add up the sums, the immediate cost of taking on an overseas worker could soon be a staggering £3,250 per employee or more – and that doesn’t even take into account the cost of recruitment, legal fees and regulatory administrative costs.”

Brooksbank said the UK's Leave vote in the EU referendum had led to panic among business owners and workers concerned for their future. Her law firm has seen a 1,100 per cent rise in calls from EU migrants for advice on securing permanent residency and a similar surge in enquiries from businesses employing foreign workers since the result was publicised.

Splendid Hospitality Group's Nadeem Boghani told the BHA's Hospitality and Tourism Summit last week of his European staff's concerns about jobs following the referendum.

"On Friday morning, all our European staff were waiting outside Hilton Bankside to see the general manager, waiting to know where they stood," he said.