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Fashion is an international business in an increasingly international world. As surely as trends and designs cross national boundaries, the people who generate them are ever more mobile; those with in-demand skills, ideas and business plans relocate to pursue opportunity. Yet legal challenges and expensive liabilities lie beneath this dynamic picture.
Immigration – The New Frontier
EEA Nationals enjoy free access to the UK labour market – except that Bulgarian and Romanian nationals are still subject to specific work permit or other permission to enter employment for the first 12 months and unless they have evidence of having acquired exemption. Croatia is set to join the EU and is expected to be subject to similar restrictions. For non-EEA nationals, though, things are getting tougher. Amid tightening economic conditions and a constricting labour market, the Coalition Government committed from the outset to reduce net non-EEA economic migration from hundreds to tens of thousands per year. As it pulled the levers to tighten New Labour’s flagship Points Based System, it choked off many well-worn routes for industry professionals.
There are stringent and costly penalties for ignoring the rules. Businesses employing non-EEA nationals without the right permission for the jobs they are in face civil penalties of up to £10,000 per worker and could lose their right to sponsor others; in cases of deliberate or negligent wrongdoing, criminal sanctions await. Checking original documents and status before employment begins, and at yearly intervals thereafter for those with time limited immigration permission is essential and practice and offers statutory protection against penalties. It is vital to get proper permission to employ all non EEA nationals, and to select the right category under which to make the application.
There are new and greater restrictions on switching between immigration categories, and paths to indefinite leave (permanent residence) are being closed; it is therefore essential that business and key individuals select the right category from the outset when planning for the longer term.
Here is a summary of the current landscape:
1. The Highly Skilled
Senior executives, designers and entrepreneurs wishing to establish or join creative businesses in the UK naturally gravitated to the stand-alone, sponsor-free status afforded by Tier 1 (General) – the successor to the Highly Skilled Migrant Programme. Tier 1 (General) was an early target for restrictions and closed completely to new applicants in April 2011. Now, only those already in the category can apply to extend. Yet would-be applicants with imaginative ideas, sponsorship or investment still have options:
2. Skilled Employees
UK employers, including the UK arms of international businesses, can apply for sponsorship licence to employ skilled non-EEA nationals under the sponsorship arrangements of the Points
Based System.
There is no numerical cap, but transfers are now time–limited, usually to no more than 5 years depending on the subcategory, after which options for alternative status are intentionally restricted.
3. Temporary Workers, Students and Interns
The UK Fashion industry is a magnet for young talent from across the world. Internships enable businesses to cope with the shows without busting the salary bill. The options here are:
3. Family and Ancestral routes
Conclusion
The rules are not as straightforward as most business would like to believe – or as the last Government led them to expect. Nasty pitfalls await the unwary. Careful due diligence, and taking legal advice in cases of doubt or concern, are highly recommended. The immigration and associated employment law risks can be severe otherwise; don’t be tempted to break the rules!
This article was written by Matthew Davies, Partner at Fox Williams and Head of its Business Immigration Practice. He can be contacted on mdavies@foxwilliams.com