EU Settlement Scheme: Right to Work Issues for Employers

Following the UK’s departure from the European Union, free movement for EU nationals to the UK ended on 31 December 2020. There was then a six-month grace period during which all EU, EEA and Swiss citizens and their family members who were resident in the UK on or before 31 December 2020 were eligible to apply to the EU Settlement Scheme (“EUSS”) in order to protect their rights to live and work in the UK.

The deadline for applications to the EUSS was 30 June 2021.

From 1 July 2021 onwards, EU citizens and their family members will have to prove their right to work in the UK by providing their employer with evidence that they have pre-settled or settled status under the EUSS or another form of valid visa. They can no longer simply rely on an EEA passport or national identity card to prove their right to work.

The Home Office has updated its guidance for employers carrying out right to work checks, which can be found here.

The Home Office guidance sets out how right to work checks must be carried out, in line with employers’ obligations to prevent illegal working. Carrying out right to work checks correctly before employing someone will provide the employer with a ‘statutory excuse’ against a civil penalty, which can be a fine up to £20,000 for each illegal worker. Employers with a statutory excuse will usually avoid a fine being imposed, even if it later transpires that an employee didn't have the right to work in the UK.

It is therefore vital that employers understand what has changed and what to do if they become aware an employee has not applied to the EUSS.

Retrospective right to work checks are not required

In good news for employers, the Home Office has made clear that retrospective checks will not need to be carried out on EU citizens who are existing employees, provided they were in your employment on or before 30 June 2021.

This means that, if an EU national was employed by you on or before 30 June 2021, and a right to work check was carried out correctly on the individual at that time, you will not be required to carry out a further right to work check and you will maintain a continuous statutory excuse against liability for a civil penalty.

Some employers may opt to carry out retrospective checks anyway. If this is done, the checks must be carried out in a non-discriminatory manner. We recommend any employer who is considering carrying out retrospective checks on existing employees seeks legal advice to ensure they are carried out lawfully.

What if an employee has not applied for the EU Settlement Scheme?

Despite the huge uptake to the EUSS, there are a number of eligible individuals in the UK who have not yet applied. The latest estimates are that over 100,000 eligible EU citizens have not applied for the EUSS.

Employers who become aware that one of their existing employees has not yet applied for the EUSS can make use of the transitional measure the Home Office has introduced (see further below) and advise the employee to make an application under the EUSS within 28 days, and continue to employ them provided they make their application within that 28 day period.

This is only applicable to employees who were working for their employer on or before 30 June – any new recruits will need to have their right to work checked before their employment begins in line with the Home Office guidance on right to work checks. It will also not apply to employees who the employer knows are not eligible for the EUSS, e.g. because they entered the UK after 31 December 2020.

This transitional measure is time limited and will only be available until the end of 2021.

Late EUSS applications

Individuals who are eligible to apply to the EUSS but missed the deadline and filed a late application will need to persuade the Home Office that they had a ‘reasonable excuse’ for not applying before the June deadline. The Home Office has provided examples of what amounts to a ‘reasonable excuse’ and these include situations where people in abusive or controlling relationships were prevented from applying, and those who lack the physical or mental capacity to apply.

We recommend individuals who believe they are eligible for the EUSS but have not yet applied seek legal advice, in order to present their late applications as soon as practicable and in the strongest possible terms.

Actions for employers and employees

As mentioned above, the Home Office has recognised that there are a significant number of EU citizens who have not yet applied to the EUSS. They have therefore introduced a transitional measure, available until 31 December 2021, to provide additional flexibility to employers who may find themselves in the situation where an existing EU national employee has not yet applied to the EUSS, despite the deadline having passed.

Under this transitional measure employers don't have to immediately dismiss an employee who hasn't applied to the EUSS by the deadline. The employer can instead advise the employee to make an application under the EUSS within 28 days and continue to employ them.

However, there are a number of steps the employer and employee must follow to take advantage of this transitional measure:

  • The employee must provide their employer with evidence that they have made their application within the 28-day window – e.g. providing the employer with a copy of their Certificate of Application, or an EUSS email or letter confirming receipt of their application. If the employee does not make an application to the EUSS within 28 days, the employer must take steps to terminate their employment.
  • Once the employer has this information, they must request a right to work check from the Home Office Employer Checking Service and obtain a Positive Verification Notice (PVN). The employer must retain the PVN and a copy of/evidence of the employee’s application, along with the initial right to work check carried out on the employee on or before 30 June 2021. This evidence will provide the employer with a statutory excuse against a civil penalty for six months, during which time the employer can continue to employ the employee.
  • Before the PVN expires, the employer must carry out a follow-up right to work check in order to maintain its statutory excuse against a civil penalty. If the employee has been successful in their EUSS application and has been granted status before the PVN expiry date, they can provide their right to work to the employer using the Home Office right to work online service.
  • If the follow-up right to work check confirms that the application is still pending, the employer will be given a further PVN for six months. If the follow-up check confirms the application has been finally determined and has been unsuccessful, then the employer will not be issued with a PVN, the employee will not have the right to work in the UK, and the employer will need to take steps to terminate the employee’s employment.

The transitional measure doesn’t apply to anyone employed on or after 1 July 2021, so employers must perform appropriate right to work checks on all such individuals prior to their employment starting. If the new recruit cannot prove their right to work e.g. by having pre-settled or settled status under the EUSS, the employer cannot employ them.

As the implications of getting right to work checks wrong can be serious, we encourage you to review your existing practices for conducting right to work checks. Our Immigration Team can also assist with ensuring that right to work checks are carried out correctly in a way that will provide you with a statutory excuse against a civil penalty. The team also advise on all aspects of the EU Settlement Scheme, including assisting employers with any EUSS-related queries and assisting individuals with making their EUSS applications. For further information, please contact Kirsty Cooke or Ellen Parker.

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