The clock is now ticking on EU Settlement Scheme applications – what do employers need to know?

1st June 2021

When free movement ended for EEA and Swiss (“EEA”) nationals at the end of the Brexit transition period on 31 December 2020, EEA citizens who had entered the UK by this date were given a 6 month “grace period” until 30 June 2021 to secure their longer term residency rights by making an application under the EU Settlement Scheme (“EUSS”).  The end of the grace period is now less than a month away and, not surprisingly, many employers are wondering what they can do to ensure their EEA workers continue to have the legal right to work in the UK beyond that date. In this article, we seek to address some of the common concerns and provide some practical tips on the steps employers can take in the final few weeks to protect against the risks associated with employing illegal workers.

What is the EUSS?

EEA citizens who had entered the UK by 31 December 2020 can apply to obtain either settled status (if they can evidence 5 years’ continuous residence) or pre-settled status (if they have less than 5 years’ residence) under the EUSS, which was set up as the mechanism for EEA nationals to secure their rights in the UK following Brexit. Settled status provides an indefinite right to live and work in the UK, whereas pre-settled status provides a 5 year right on the basis that an application for settled status can be made once 5 years’ continuous residence has been obtained.

Obtaining settled or pre-settled status is free, there is no requirement to be employed by a sponsor licence holder and there are no restrictions on the type of employment an EEA citizen can undertake in the UK once they have status.

Is status under the EUSS an automatic right?

An important feature of the EUSS is that it is not an automatic protection of the right to reside in the UK; an application is required to secure status. If an application is not made by the deadline of 30 June 2021, a person who would have been eligible under the EUSS will become unlawfully resident in the UK (other than in a limited number of situations) unless they have an alternative legal basis to remain, and they will therefore lose their legal right to work.

Should we be asking our current EEA workers to prove they have secured their status?

The Home Office’s Employer’s Guide to Right to Work Checks is very clear that there is no obligation to conduct retrospective right to work checks on existing EEA staff and no authority to oblige them to prove their status under the EUSS, whether before or after the 30 June deadline for applications.

Further, until 30 June, new recruits can volunteer to evidence their status under the EUSS, but cannot be compelled to do so without risking allegations of discrimination.  An EEA passport or national identity card remains acceptable evidence of right to work until then.

From 1 July 2021, any new EEA recruits will need to provide evidence of EUSS status or an alternative right to work e.g. sponsorship or a partner visa.

How do we know new recruits will be eligible to work for us beyond 30 June?

The Home Office guidance is clear that employers are not expected to distinguish between EEA nationals who first arrived in the UK before 31 December 2020 (and are therefore eligible to make an application under the EUSS) and those who arrived after this date (who may not be). Demanding evidence of this will be discriminatory, therefore employers are in a very difficult position when it comes to knowing whether EEA workers they take on before 30 June will continue to have the right to work. A sensible precaution would be to have a gentle conversation and sensitively encourage candidates to volunteer information regarding their status or eligibility to apply for it, e.g. in the context of offering to assist with any application that may be required.

What are the risks if existing EEA workers do not make an application in time, and how can we manage these?

The Home Office guidance makes it clear that employers who have undertaken legally compliant right to work checks of EEA passports or ID cards before employing EEA nationals will continue to retain the statutory excuse against the civil offence of employing illegal workers. Therefore unless the business has actual knowledge, or reasonable grounds to believe, that an individual hasn’t made an application in time (in which case separate criminal sanctions may apply), there may be little practical risk of employing an EEA national who has not made an application in time.

However, in order to benefit from the statutory excuse, the right to work check must have been conducted in the prescribed manner and must have been conducted before employment of the EEA national commenced (further details are available in our previous article).

In reality many organisations fall short when it comes to right to work checks, and the challenges posed by working from home during the pandemic are likely to have exacerbated these issues. They may therefore risk civil penalties of fines up to £20,000 per illegal worker if the Home Office discovers they are employing EEA workers who have not made an application under the EUSS from 1 July. It is highly likely that right to work documents for EEA nationals will be more rigorously checked during Home Office compliance visits after the 30 June application deadline has passed, and therefore this is something employers need to be actively turning their attention to given the potentially serious financial consequences, as well as resourcing challenges the business will face if EEA workers may have to be let go. In addition, being found to be employing EEA nationals who haven’t made an application in time where proper right to work checks cannot be evidenced may also have ramifications on the ability of the employer to sponsor non-UK workers under their sponsor licence, which is a business imperative for many organisations.

How can we protect the business?

The Home Office guidance acknowledges that employers may choose to undertake retrospective checks of existing workers, and provides that if an employer goes down this route, then they should do so in a manner which is not discriminatory, i.e. request all staff (regardless of their nationality) to bring in updated evidence of their right to work and not focus solely on EEA nationals proving status under the EUSS. Appropriate action would then need to be taken in relation to those who are unable or unwilling to bring in up to date evidence.

However, this area can be particularly difficult to navigate and carries risks around discrimination and unfair dismissal (if the individual’s employment is terminated as a result of them not providing evidence). The process should therefore be approached with extreme caution and only after taking specific legal advice.

How can we encourage EEA workers to make their applications in time?

The key tool at employers’ disposal in these final weeks before the deadline expires is communication and making sure that EEA workers who haven’t yet made their application are aware that the clock is now ticking. In the run up to the 30 June deadline, employers should therefore think about:

• Auditing their workforce to assess the proportion of EEA workers and whether this is likely to be a significant issue for them;
• Sending gentle reminders along with links to the latest government information for EEA nationals on making applications in time;
• Raising awareness of the fact that individuals who don’t apply in time will (in all but very limited circumstances) lose their legal right to remain in the UK, access healthcare, rent property etc. Careful thought will need to be given to the tone of such communications;
• Given that the timeframe for making applications is now relatively tight, it would also be worth considering offering any individuals who disclose that they have not yet made an application assistance with the process if they require it; and
• In the longer term, assisting those who obtain time limited pre-settled status to track when their application for settled status will become due.

Will individuals be able to apply after the 30 June deadline?

The Home Office has confirmed that applications will be considered after the 30 June deadline only where there are “reasonable grounds” for the application not having been made in time, e.g. where a person lacked the digital skills to make the application, or where a parent has failed to make the application on behalf of a child. There is still much uncertainty around when late applications will be entertained, and therefore this should not be viewed as a safe fall-back position.

How can employers ensure new EEA recruits have the right to work after 1 July 2021?

The Home Office right to work guidance is due to be updated in advance of 1 July to provide further details regarding the specific processes that will need to be followed for EEA recruits from this date. We will publish further updates when more information becomes available.

Is there any message we need to get across to our group companies in the EEA?

EEA national and their family members currently outside the UK may be eligible for settled status if they have previously completed a continuous qualifying period of 5 years’ residence in the UK prior to 30 December 2020, and have not been absent from the UK for a period of more than 5 consecutive years since then. There may well be individuals engaged in group companies in the EEA who are able to benefit from this, which will open up the option to work in the UK without the restrictions associated with visit visas or sponsorship. It is therefore worth ensuring this issue is on the radar of HR teams across EEA group companies as a matter of urgency, so they can identify any potentially eligible workers who may need to come to the UK to work and advise them accordingly.

How we can help

It is clearly in the interests of employers to ensure EUSS applications are submitted by their staff in time. The Walker Morris Business Immigration team is here to assist with any queries on the employment of EEA nationals and questions about the recruitment of EEA citizens from 1 July 2021. If you require assistance on any of these issues, please contact Shabana Muneer using the details below.