As the deadline for the UK’s exit from the European Union approaches, there is a real risk that the UK government will be unable to reach an agreement with the EU over the terms of its Oct. 31 departure.

With just over two weeks to go until that date, contingent workforce buyers should prepare for the impact that a “no-deal Brexit” will have on their ability to employ UK and EU nationals and avoid disruption to their supply chain.

Employing Workers

Employers will need to ensure that EU citizens currently residing in the UK apply to be allowed to remain in the UK under the EU Settlement Scheme. This will entitle them to work and receive healthcare and benefits for up to five years. The scheme is free, and the deadline for applying is June 30, 2021.

Settled status. EU nationals who have lived in the UK for five years by Dec. 31, 2020 (or by Oct. 31, 2019 if the UK leaves without a deal) will be granted settled status, unless they have serious criminal convictions or there is a security reason why they can’t stay.

An EU citizen who has been living in the UK for less than the five years that the scheme requires will be given something called “pre-settled status.” This will allow them to stay and work in the UK until they hit the five-year mark. Then, they will need to claim settled status.

Any new EU nationals wishing to work in the UK after Brexit must have the relevant right to work in the form of either pre-settled or settled status or a new temporary immigration status, European Temporary Leave to Remain (“Euro TLR”). EU workers will be able to apply at the border or after arrival in the UK for Euro TLR, which will allow them to work for up to three years.

Visa sponsorships. From Jan. 1, 2021, EU workers will need a visa under a new Australian-style points-based immigration system, which will likely be geared toward attracting skilled workers. The details of this are yet to be published by the government, but any employers that do not currently hold a visa sponsorship license should consider applying for one in preparation for this scheme.

For businesses employing UK workers in the EU, it is up to applicable member states — not the EU — to decide what rights to grant British citizens already residing in their countries.

Each of the remaining 27 EU member states has prepared or adopted national contingency measures to ensure that UK nationals and their non-EU family members could remain legally resident in their respective countries in the immediate period after a no-deal withdrawal. Employers should review the overview table and Q&A summary of the latest position for each member state published by the European Commission on UK nationals’ residency rights.

This information is provided by the relevant national authorities of the member states and therefore may be subject to change from time to time. The Citizens’ Rights page of the European Commission should also be checked regularly.

Data Transfers

If the UK leaves the EU on Oct. 31 without a deal, it will become a “third country” for the purposes of data protection, and any transfer of personal data relating to EU citizens from a European Economic Area country, or EEA, which includes Iceland, Liechtenstein and Norway in addition to the EU member states to the UK will be treated as a “restricted transfer.”

Any cross-border processing between the EU and UK will no longer be considered adequately protected under the GDPR, even though the UK has implemented the GDPR in full.

Such processing between data controllers and processors will therefore need to be authorized by the inclusion of “standard contractual clauses” as approved by the European Commission to guarantee a standard of protection for EU citizens’ data that is considered adequate.

Businesses entering into standard contractual clauses should have these in place by Oct. 31.

If data is collected directly from individuals in an EEA country and transferred to the UK, the individual must give their explicit consent to the precise details of the restricted transfer. The UK’s Information Commissioner provides guidance on how to get explicit valid consent.

Preparing for No-Deal

There are still intensive efforts on all sides to get a withdrawal agreement, but as the clock counts down to the end of October, businesses would be wise to prepare for the consequences of the UK leaving without a deal.

Scenario planning. The outcome of Brexit remains unpredictable but introducing workflow documents outlining different scenarios is an effective way to identify the most significant risks and mitigate these as far as possible.

Existing employees. Many EEA citizens may have queries about their ongoing status and ability to work as the end of October approaches. Employers will not be able to provide all the answers, but reassurance and providing proactive support with the EU Settlement Scheme to current employees can help allay fears.

Hiring EU workers. Employers should keep up to date with the immigration advice and information issued by the UK and EU member state governments. Continue checking right to work of prospective employees in the same way as now, but prepare for a new, points-based scheme to come into effect on  Jan. 1, 2021.

Data protection. Review your current processing of personal data and consider whether it is necessary to amend your contracts or obtain individual consent to transfers to the UK. Review all documents, including your privacy notices to amend the wording as it relates to the UK and the EU. If you are a US company doing business in the UK, you will need to amend your Privacy Shield commitments. UK-based businesses may also need to appoint an EU representative and identify a lead supervisory authority within the EU.

Commercial operations. Audit your existing contracts to assess whether the terms of the contract are flexible enough to protect you against price increases, additional charges and potential operating restrictions.

For further information on these issues and the steps businesses need to take to prepare for a no-deal Brexit: