What to do if you discover one of your employees has not applied for settled or pre-settled status

All employers in the UK have a legal responsibility to prevent illegal working.  In order to satisfy this requirement, it is important to undertake basic right to work checks before taking on any new employees, to make sure that they have the necessary immigration permission to work in the UK. 

Employers’ Responsibilities

Provided that the necessary checks have been carried out, and a record has been kept of this, employers will have a “statutory” defence to a charge of illegal working.  Failure to comply with the checking requirements can result in a civil offence under the Immigration, Asylum and Nationality Act 2006 being committed and a fine of up to £20,000 in the event that an employee is found to be working illegally.  In addition, failure to comply can result in bad publicity and have an adverse effect on your licence to sponsor overseas workers in the future. 

An employer commits a criminal offence under the Immigration, Asylum and Nationality Act 2006 if s/he knows or has reasonable cause to believe that s/he is employing an illegal worker. The penalty in this event is up to five years’ imprisonment and/or an unlimited fine.

Impact of Brexit – a summary

The UK left the European Union and free movement of people ended on 31 December 2020. There followed a six-month grace period during which relevant aspects of free movement law were retained to allow eligible EU citizens and their family members resident in the UK by 31 December 2020 to apply to remain here under the EU Settlement Scheme. This period ended on 30 June 2021.

From 1 July 2021, EEA citizens and their family members require immigration status to live and work in the UK.  In most cases, they will need to show have applied for, or received settled or pre-settled status on or before 30 June 2021. If they arrived after 31 December 2020 they will need a visa in order to live and work in the UK.

Retrospective checks

The Home Office has made it clear that employers do not have to undertake retrospective checks on any EEA citizens who started working for you before 1 July 2021. You will maintain a continuous statutory excuse against liability for a civil penalty if the initial checks you made complied with the guidance that applied at the time you made them.

However, many employers are choosing to undertake checks for their own piece of mind.  This leaves employers facing the question of what to do if they suddenly discover that an employee does not have the necessary permission to live and work in the UK.

New guidance

The Home Office updated its ‘Employers guide to right to work checks‘ on 1 July to reflect the new rules. This states that it is not necessary to immediately dismiss a member of staff who has not applied for settled or pre-settled status by the 30 June 2021 deadline.

Instead, employers can advise the employee to make an application under the settlement scheme within 28 days, and continue to employ them during this time.

However, this option is only available if the employee in question started working for you on or before 30 June. It does not apply to anyone who has commenced employment since 1 July 2021.

In addition, this flexibility only lasts until the end of this year.  After 1 January 2022, if you discover that any employee does not have the right to work here, it will be necessary to take immediate steps to dismiss them.

Reasonable excuse for missing the deadline

An EU national who has missed the deadline for applying will have to persuade the Home Office that they had a ‘reasonable excuse’.  It seems likely that applicants will rely on ‘compelling practical or compassionate reasons’ as this is a broad category and could cover anyone who was unaware of the need to apply, perhaps because they had no internet access, limited computer literacy or limited English language skills. It could also cover applicants who lacked the necessary evidence, for example, those who were unable to obtain a valid ID document in time and were unaware they could rely on an expired document.

Practical steps and tips

If you decide to give your employee time to apply for settled or pre-settled status there are a number of steps to follow:

1. the employee must provide you with evidence that they have made their application within the 28 day deadline. They will have received a Certificate of Application or an email (or letter if they submitted a paper application), confirming receipt of their application;
2. as soon as you have this information, you must request a right to work check from the Home Office Employer Checking Service. It will give you a Positive Verification Notice (PVN). You must retain the PVN and a copy of the individual’s application, or evidence of their application, along with the initial right to work check you carried out on or before 30 June 2021. These will then provide you with a statutory excuse against a civil penalty for six months. You can continue to employ the individual during this time;
3. before the PVN expires, you must do a follow-up check to maintain your statutory excuse against a civil penalty. If the EU national has been granted status before the PVN expiry date, they can prove their right to work to you using the Home Office right to work online service;
4. if the follow-up check confirms that the application is pending, you will be given a further PVN for six months;
5. if the follow-up check confirms the application has been finally determined and refused, then you will not be issued with a PVN and you must take steps to terminate the individual’s employment.

We recommend that employers consider conducting retrospective checks. If you discover that you are employing an EU national illegally, it will give them an opportunity to rectify the situation and it  will be less disruptive and provide reassurance for your organisation in the longer term.

For tailored legal advice and support on immigration matters contact Nadine Marston nmarston@boardside.co.uk or call Boardside on 0330 0949338