Actions for employers as EU Settlement Scheme deadline looms

Out-Law Guide | 25 May 2021 | 9:05 am | 5 min. read

Employers should urgently review whether any of their existing employees need to engage with the EU Settlement Scheme (EUSS) to remain eligible to continue living and working in the UK beyond the end of June 2021.

The UK left the EU on 31 January 2020, triggering an end to freedom of movement rights EU citizens had previously enjoyed, which enabled them to move to the UK to live and work unhindered. However, the EU-UK Withdrawal Agreement provided a grace period following the end of free movement for citizens from countries within the European Economic Area (EEA), allowing them to cement their residence status in the UK via the EUSS. Irish citizens are not required to apply.

With limited exceptions, applications by eligible EEA nationals and their family members to the EUSS must be submitted by 30 June 2021. Those eligible must do so to secure a continued right to live and work in the UK beyond that date.

Who does the EUSS deadline apply to?

Broadly, the EUSS is relevant to EEA nationals and their family members who were in the UK exercising their free movement rights as of 11pm on 31 December 2020. That cohort of people can include those now living outside the UK if they had completed five years continuous residence prior to 31 December 2020, provided they have not been absent from the UK for more than five years since. There is provision for family members to come to the UK at a later date and still be eligible to apply under the EUSS in certain circumstances.

How do people apply?

The application can be submitted within the UK or abroad and is generally completed online – in most cases by scanning the applicant’s passport chip.

The application itself is relatively straightforward and free – providing a significant cost saving for employers in comparison to the prospect of sponsored work visas under the points based system. Applicants will have to evidence their residence in the UK for the period in question –a broad range of evidence can be cited, though in many cases a national insurance (NI) number is sufficient. There is no English language requirement or similar test to qualify.

What will they get?

Settled status

EEA citizens who have resided in the UK for a continuous period of five years, with at least six months of each year spent in the UK, will be entitled to settled status – a right to remain in the UK indefinitely. This will be retained provided they do not remain outside the UK for more than five years at a time, or four years if they are Swiss.

Pre-settled status

EEA citizens who have resided in the UK for less than five years will be entitled to pre-settled status – up to five years’ limited leave to remain in the UK. To remain beyond that, they must apply for settled status before their pre-settled status expires. Pre-settled status can be lost if they spend more than two years outside the UK.

Both settled status and pre-settled status are conferred digitally and can be evidenced to employers through the online checking service. They entitle the holder to work in the UK, use the NHS for free, study and access public funds.

What if employees fail to apply on time?

People who fail to apply to the EUSS in time will no longer be lawfully resident in the UK. Late applications may be accepted at the Home Office’s discretion if there are reasonable grounds for missing the deadline and they have been submitted as soon as possible thereafter, but there is no guarantee such discretion will be exercised. It is not yet known how much leeway applicants will be given.

What about EEA staff who do not qualify for the EUSS?

Unless eligible for frontier worker permits or another immigration route, to lawfully work in the UK such individuals will likely require sponsored work visas under the points based system. This is the case for most people coming to the UK to work since 1 January 2021. Such visas have strict skill, salary and in some cases English language thresholds that not all roles or individuals will meet. They also come with significant costs and compliance duties for employers.

Those EEA nationals living outside the UK who commuted to the UK for work by 31 December 2020 may be eligible for frontier worker permits as an alternative to the EUSS. In most cases they must have worked in the UK at least once every year since first working here.

Frontier worker permits are free to apply for but are slightly more complex applications to complete than under the EUSS. Such a permit will entitle the holder to come to the UK to undertake work, which would otherwise require a work visa, and can be renewed indefinitely whilst they remain frontier workers. It will not entitle the individual to settle in the UK. This is a good option for EEA nationals who need to work in the UK from time-to-time but do not intend to permanently reside here or seek settlement and so may not qualify for settled status under the EUSS.

Frontier workers will need a permit to enter the UK to work on that basis from 1 July 2021.

What should employers do?

  • There is a small remaining window in which to ramp up staff communications encouraging those affected to apply to the EUSS. Applications should not be left until the last minute to ensure that, if required and feasible, a fresh application can be submitted in the event of refusal or incorrect status being granted. Processing times can vary quite significantly.
  • Crunch the numbers. If you have the data, identify the portion of your workforce impacted by this and whose right to continue living and working in the UK is contingent on a successful EUSS application. This will enable you to make future staffing contingency plans if needed. Equally, identify those EEA staff residing overseas but who commute to the UK for work and consider whether they may qualify for a frontier worker permit, will require sponsorship for future trips or can conduct their activities as a visitor, bearing in mind the strict limits on what visitors can do.
  • Employers cannot insist staff apply or require confirmation or evidence of them having done so. However, there is merit in inviting staff to voluntarily provide this information for future planning and to enable a timely response to any changes in right to work checks which may be imposed.
  • Keep an eye on developments in required right to work checks. Currently these continue to allow EEA nationals to evidence their right to work through their passport. Employers are not required to check whether an individual is eligible to apply under the EUSS depending upon when they were last in the UK. This creates a tricky compliance position for employers, and we await an update from the Home Office as to whether the checks required against EEA nationals, including in relation to existing staff, may change later this year.