What does the EU Settlement Scheme mean for your organisation and its EEA employees?

With the EU Settlement Scheme now open to all eligible EEA nationals and family members, many UK employers remain uncertain about what this means for their employees and their HR compliance, policies and processes.

We’re hearing concerns about how best to support EEA workers with the new regime and about the potential risks of workplace discrimination or Home Office penalties should an employer err in their compliance duties.

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Settled Status in the UK: What do employers have to do?

For UK employers, the key considerations of the EU settlement scheme are as follows:

  • There will be no change to the rights and status of EU citizens living in the UK until 30th June 2021.
  • Current right to work document checks continue to apply.
  • You are under a duty not to discriminate against EU citizens in light of the UK’s decision to leave the EU, both as a prospective and current employer.

What employers need to know about the EU Settlement Scheme 

From 1 July 2021, EU citizens and their family members wanting to continue to live in the UK must hold lawful immigration status under the EU settlement scheme.

EU citizens and their family members with settled status will have the right to remain in the UK indefinitely and have access, as they currently do, to healthcare, pensions and other benefits in the UK.

There will be no change to EU citizens’ current rights in the UK until the end of June 2021. This includes the attainment of permanent residence status after five continuous years of exercising Treaty Rights, and the requirement for proof of permanent residence as a mandatory prerequisite for EEA nationals applying to naturalise as British citizens.

The settlement scheme does not apply to EU nationals with indefinite leave to remain or British citizenship, or to Irish citizens.

Settled status
EU citizens and family members living in the UK by 31 December 2020 (or by the date the UK leaves the EU without a deal) for five continuous years will have until 30 June 2021 to make a settled status application to remain in the UK indefinitely.

Children born here to settled status holders living in the UK will automatically be British citizens.

Pre-settled status
Those who are living in the UK by 31 December 2020 (or by the date the UK leaves the EU without a deal) but have not attained the requisite five-year qualifying period at the time of application will be eligible for ‘pre-settled status’. With pre-settled status, they are permitted to stay in the UK until they have reached the five-year point when they should apply for full settled status. Pre-settled status holders can stay in the UK for a further 5 years from the date of attaining the status.

With pre-settled status, any children born in the UK will be automatically eligible for pre-settled status. They will only be a British citizen if they qualify for it through their other parent.

Applicants are not able to choose which status to hold; it is determined by the date the application is made and the length of time the applicant has been in the UK at the time of applying.

Family members
Close family members of EU citizens with settled status can join them in the UK before 31 December 2020 (or before 31 December 2025 if Swiss citizens) and will need to apply through the settlement scheme once here.

After 202o, the rules become more complex and less clear for dependants, and will depend on factors such as nationality and whether the UK leaves Europe with a deal or no deal.

Applying for settled status

There is no charge for making an application. Those who already hold a valid permanent residence document will be able to transfer to settled status free of charge.

The Government has emphasised the scheme’s application process is intended to be streamlined and user-friendly.

Existing government data such as HMRC records are being utilised to minimise the evidentiary burden on applicants and Home Office caseworkers are being afforded substantial discretion to enable smoother processing. Applicants will however need to show proof of identity and if online records, such as NI contributions, do not confirm residence, proof of continuous may need to be given.

Advice for employers on Settled Status in the UK 

For UK employers, the new settled status raises a number of considerations.

While you are not legally obliged to communicate the EU Settlement Scheme to your workforce and are not expected to support your EU citizen employees with the application, taking a proactive approach to the scheme is helping to provide a more positive and open working environment and to avoid potential issues such as EU staff attrition.

EEA national personnel may have questions about what to do and whether they and their family qualify for the new scheme, or they may wish to secure permanent residence status in advance of a naturalisation application. Ensuring your workforce has access to up-to-date information will help to inform and reassure them of any concerns.

To support employers in approaching the change, we have developed workshops, presentations and information materials including white label fact sheets.

With the new scheme will come an inevitable need to police EU citizens’ immigration status. We expect this will fall to UK employers as part of their Right to Work document checks, following an update to the Home Office’s lists of acceptable documents.

From an HR compliance perspective, now is a good time for employers to ensure all relevant organisational policies and processes (recruitment, onboarding) are compliant with Right to Work duties and do not discriminate against individuals on the basis of nationality, and that relevant personnel are adequately trained and skilled to perform the document checks correctly.

We are working with employers across the UK through this period of change. We provide guidance on employers’ duties under UK immigration rules and how best to engage with EU workers through implementation. We are also advising on how to future-proof HR, recruitment and people strategies and processes to ensure ongoing compliance.

If you have any queries about the EU settlement scheme and what this means for your business and employees, contact us for advice and support.