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Recruitment: New regulations on migrant labour

Motor industry employers using non-European Union immigrant labour face major changes to the law from October 1.

Businesses will have to pay a one-off licence fee of either £300 if they are a small company (based on turnover) or £1,000 for a larger company. Most dealers will be hit by the higher charge. 

In addition, for each migrant a sponsoring company must pay £170.

Traders could be fined heavily for licence breaches and failure to notify the UK border agency of any immigration law infractions.

The new legislation creates a points-based format, based on the Australian system.

It affects all immigrants from outside the EU and Switzerland. It replaces the work permit system.

Lloyd Davey, senior associate at law firm Osborne Clarke, said the new laws are “a double-edged sword” for employers.

“It gives employers more control over recruiting from outside the EU. On the other hand, they have to self-certify new work permit applications and comply with onerous monitoring and reporting obligations from the Home Office.”

This is likely to be a disincentive, added Davey.

Charlie Eve, partner at chartered accountants Spofforths, agreed: “The impact of all this may be that some company directors could believe they are better off with only European Union staff, for whom the rules are less onerous.”

Employers will need to be licensed to sponsor foreign applicants and will then be able to issue workers with a certificate of sponsorship.

Motor trade managers will have to apply for the licence online and file documentation for sponsor status. Current non-EU employees are unaffected by the changes.

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