The deadline for EU citizens' applications for settled status to enable them to live, work, receive benefits and study legally in the UK, is just two days away, heralding the prospect of greater complexity for advisers and expat clients in managing cross border planning issues.
The period of grace, extended on the UK's exit from the European Union, ends this Wednesday 30 June 2021, after which only "good reasons" will excuse the failure to apply.
Although the government's Home Office is intending to be flexible and pragmatic and give applicants the benefit of the doubt, critics have warned the plan to send 28-day enforcement notices to anyone who has not applied for settled status by the 30 June cut-off date is potentially disastrous.
It is important to ensure a timely and accurate application to avoid battling through a late application.”
Both the Home Office and The Office for National Statistics has found that there are indications that there are far more EU citizens in the UK than previous estimates suggested and by May 2021 the Home Office had received 5.6m applications for settled status, considerably more than expected.
However, there is also evidence to suggest many EU citizens have left the UK and some economists suggest that this could have a significant impact on future growth in the UK as several sectors of the economy are reporting considerable difficulties in recruitment.
Parliamentary Under-Secretary of State for Immigration and Future Borders, Kevin Foster, has said all late applications will be considered if there are reasonable grounds for missing the deadline to apply for settled status, for those who have been in the country for five years or more, or pre-settled status, for those who have been in the UK for less than five years.
Foster said: "Anyone whose application was not concluded by next week's deadline would not lose out, as their rights were protected in law."
He added: "Immigration enforcement officials would begin issuing 28-day notices to people advising them to apply for settled status, but there is an indefinite period for people with reasonable grounds for not applying previously."
But immigration lawyers have complained that the 28-day notices have added to the confusion because they imply that people will have rights, when in fact those who apply late automatically lose their right to live, work, rent or access the NHS on 1 July.
Ilda de Sousa, a partner with City law firm Kingsley Napley, said those in work will also face a cliff-edge on 30 June whether vulnerable or not.
She cited one client, a German commodity broker, who had been sent to Australia to set up an office for a British firm and could have lost out if he had not been advised in time that a permanent residency document he acquired after the referendum did not protect him.
Fernanda Stefani, a consultant solicitor advocate with law firm Gaimbrone, said: "Anyone applying for settled status at the last minute should ensure they provide the necessary documents and information in order to avoid their application being rejected. It is important to ensure a timely and accurate application to avoid battling through a late application."
While tax and wealth management advisers Blevins Franks points to the situation if clients were already living in say Spain, before 2021.
In a briefing note it said "UK nationals who can demonstrate that they were lawfully settled in Spain before the transition period ended can enjoy uninterrupted freedom of movement and citizens' rights under the UK/EU Withdrawal Agreement.
"You don't need to have been physically present in Spain as at 31 December 2020 to qualify, but you do need proof that it was your permanent home at that time (such as a padrón certificate, utility bills and Spanish bank statements).
It further added: "If you already hold a green card or residence certificate from Spain, you don't have to exchange it for the new residence document (the TIE). However, it may be sensible to do so as the TIE will explicitly confirm your rights under the Withdrawal Agreement.
"You must register for residence before 30 June 2021 to qualify for the significant benefits offered under the Withdrawal Agreement."
Among the many issues around this significant status change for EU citizens, international law firm Pinsent Masons has also highlighted how UK employers will need to check that workers from the European Economic Area (EEA) and Switzerland have the right to work in the UK from 1 July 2021.
It explained that until this Wednesday 30 June, EEA nationals can present their passport or national ID card as evidence of their right to work in the UK. However, from 1 July 2021, EEA citizens and their family members will need an immigration status in the UK and will no longer be able to rely on their EEA passport or national ID card.
In anticipation of this, the UK Home Office published an updated draft code of practice on preventing illegal working (the code of practice).
The code of practice takes effect on 1 July 2021, and is focused on the civil penalty regime only (criminal liability for illegal working can also arise). It has been published in draft form but is not expected to change. The more detailed employer guidance on right to work checks has also been updated.
The extra complexity of the new regime is illustrated by Pinsent Masons's highlighted areas for employers to have to abide by, covering employer duties, changes to the code practice, whether there should be repeat checks on existing staff, what to do if an existing employee hasn't applied to the EU Settlement Scheme by 30 June 2021 and the impact of Covid-19 adjusted checks:
Employers should complete pre-employment right to work checks against all recruits, to ensure that they have a right to work in the UK. Follow-up checks are required against those with time-limited permission to work in the UK. Where checks are completed in line with Home Office requirements, the employer will secure a statutory excuse to a civil penalty of up to £20,000 per illegal worker should that individual be, or become, an illegal worker.
There is no liability for failing to complete a compliant right to work check, but where this has not been done the employer will not have a defence to civil liability for illegal working.
What has changed in the code of practice?
The main changes in the updated code of practice relate to the right to work checks required against EEA/Swiss nationals and any third country family members from 1 July 2021.
Those EEA/Swiss nationals with a digital status under the EU Settlement Scheme will have to evidence this to a new employer through the online checking service. Whether they have settled or pre-settled status will determine whether they will be subject to a repeat right to work check during their employment. Those with biometric documents and frontier worker permits may also choose to use the online service. Manual checks can still be used for anyone with a physical document.
The code of practice has been amended to include the following acceptable documents as evidence of a right to work in the UK: documents issued to EEA/Swiss nationals and their family members by the Bailiwick of Jersey or Guernsey; frontier worker permits (which will evidence a temporary right to work in the UK); and Irish passports.
The ‘list A' and ‘list B' structure remains the same, although the lists themselves have been amended. It remains the case that list A documents will secure an ongoing statutory excuse provided they are checked and recovered correctly. List B documents evidence a temporary right to work, and so employers must diarise to complete the required repeat check.
One further change relates to the employer checking service (ECS), which is used to verify an individual's right to work when they are otherwise unable to provide evidence of this. The code of practice states that if an ECS request is not considered within five working days - which is often the case - the employer will get an automated response confirming they may hire the individual. This automated response will provide a statutory excuse to illegal working. If a negative verification notice is subsequently received, the employer must carefully investigate before terminating employment.
Offers and contracts of employment should always be made strictly conditional on the individual having, and retaining, the right to work in the UK. Where an automated response is received, the employer should make clear to the employee that an outcome from the ECS is outstanding and if a negative verification notice is received this would impact their future employment.
Are employers required to conduct repeat checks on existing staff?
No. The code of practice and previous Home Office communications indicate that no retrospective checks will be required against existing EEA/Swiss national staff who commenced employment before 1 July 2021. Although many employers will welcome this from the perspective of administrative convenience, it does leave them with no legal basis on which to verify that EEA/Swiss staff have cemented their status and right to work in the UK beyond 1 July.
If employers are concerned as to the robustness of their previous checks against existing staff, and therefore whether they have a statutory excuse, they may ask existing staff to evidence having applied to the EU Settlement Scheme and secured a status under it, or obtained a frontier worker permit. The argument for doing so would arguably be increased where there would be significant operational or safety impact in the workplace were such individuals found not to have the right to work and, for example, were refused re-entry to the UK to work. Such checks would not provide a late statutory excuse, but could provide comfort as to the status of workers.
However, employers have no legal right to insist that existing staff have so applied, or indeed to conduct a repeat check against them, and so refusals from staff to cooperate would have to be handled carefully from an employment law perspective.
What if I find out an existing employee hasn't applied to the EU Settlement Scheme by 30 June 2021?
The updated employer guidance on right to work checks states that transitional measures will be in place until 31 December 2021. In such circumstances, the employer will not have to terminate employment when it discovers that the employee has not applied to secure a status.
The employer should: advise the employee to apply to the EU Settlement Scheme within 28 days and provide a copy of their Certificate of Application;
once a copy of the Certificate of Application has been provided, use the Employer Checking Service to confirm they have applied. Tthe employer may be required to provide evidence of the individual's start date, including a copy of the initial right to work check;
if a Positive Verification Notice is received, a statutory excuse will be secured for six months, allowing for the application to be processed; a repeat check must be conducted before the Positive Verification Notice expires.
If the Home Office discover EEA citizens, or their family members, who are working without a status under the EU Settlement Scheme, they will be given a 28-day notice before action is taken. This will allow them the opportunity to make a late application, although it cannot be guaranteed that such an application will be accepted, depending upon the grounds for missing the deadline.
What if I completed a check before 1 July, but the individual starts employment after this date?
In these circumstances, the current code of practice would apply and so an employer would be permitted to accept, for example, an EEA passport. The updated code of practice applies to all right to work checks from 1 July 2021, including follow-up checks.
Employers may choose to take a cautious approach, applying the new requirements for all those commencing employment on or after 1 July.
How does this impact Covid-19 adjusted checks?
Employers should keep an eye on the end of Covid-19 adjusted right to work checks. A temporary concession under which a statutory excuse is available following checks performed based on scanned copies or photos of original documents over a live video link, with the originals in the possession of the individual, is currently due to come to an end on 31 August 2021, with full checks required from 1 September. The end of this concession has now been pushed back twice following delays to the easing of lockdown in England.