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Employers Advised to Prepare for End of EU Settlement Scheme Grace Period.

Employers Advised to Prepare for End of EU Settlement Scheme Grace Period.

Current Home Office guidance has the potential to create employment cliff edge after 30 June 2021. Employers need to act now to ensure their HR strategy can overcome the departure of EEA and Swiss members of staff. 


With the UK having now left the European Union, businesses are being urged by the Government to carry out the necessary checks to ensure they are compliant with the new rules and regulations.

However, the current Home Office guidance surrounding EU nationals who have been living in the UK prior to 31st December 2020 poses a risk to employers according to Thal Vasishta, corporate immigration solicitor and founder of Paragon Law.

Citizens of the European Economic Area (EEA) or Swiss nationals who lived in the UK prior to 31 December 2020 and plan on continuing to live here are eligible for the EU settlement scheme and should apply to ensure they can remain resident in the UK. EEA or Swiss citizens arriving in the UK from January 1 2021 will need to ensure their employer has the necessary skilled worker license and that they meet the required points-based criteria. The same rules apply for a citizen from outside of the EEA or Switzerland, with the exception of the Republic of Ireland.

Currently, employers are allowed a 6-month grace period which ends on 30 June 2021. This means that employers will not be expected to differentiate between those that arrived before the 31^st December 2020 (who are eligible to apply to the EU Settlement Scheme) and those arriving after this date (who are not eligible). However, employers will need to ensure that those EU nationals that arrived after 30 December and are unable to establish residency in the UK before 30 June 2021 are only employed if the business is able to sponsor such an individual.

This good news for employers as it allows them time to ensure that they are compliant with the current rules.

A Careful and Strategic Approach is Required

However, the rules also state that an employer cannot dismiss or discriminate against EEA or Swiss nationals without Settled or pre-Settled statusor those who do not wish to apply for the EU settlement scheme. They can work in the UK legally up to 30 June 2021.

This creates a potential cliff edge for the thousands of EU workers and their employers who have not secured, or do not wish to secure, Settled Status. For employers, they could lose EU nationals from their workforce in June 2021 and be faced with a skills shortage or be employing people illegally which comes with a £20,000 fine per employee.

Whilst the guidance should give businesses assurance and provide a degree of continuity of labour over the next 6 months it has overlooked potential risks for both employers and employees.

Thal Vasishta explains:

“EEA and Swiss nationals who have not applied under the EU Settlement Scheme and continue to remain after 30 June are liable to enforcement and removal at any time. This is where the current guidance is sloppy and does not foresee potential consequences to businesses or those EEA/Swiss nationals that decide to remain and work with a business despite not having the legal status to do so after 30 June.”

“Businesses employing EU nationals who have not applied for or secured settled status cannot dismiss them prior to 1^st July 2021. This presents a risk to the employer as, if they wish to continue to operate legally, they could be in a position that on 1^st July 2021 several employees leave voluntarily, or they have to begin the dismissal process. Both scenarios make businesses vulnerable. My clients see their EEA/Swiss cohort as long-term investments in the business and do not want to go through the expense of replacing them.”

For employees, the Home Office’s current position leaves EEA national employees open to abuse from less scrupulous employers. They will not be able to work for another employer without proof of registration under the EU Settlement Scheme (EUSS) but can continue to work with their existing employer if they and the employer continue to be complicit in their continued work. In addition, they would not be entitled to free NHS treatment and this could be an added concern should an accident occur at work.

Right to Work Checks and Workforce Certainty

The current guidance puts the emphasis on businesses to carry out the necessary checks and act as Home Office outposts. This will be a complex period for businesses and HR Managers.Paragon Law therefore advises all businesses to balance the Government’s position on Right to Work checks against certainty in their work force, employment rights and their duty of care to all employees, including EEA/Swiss nationals without settled status.

For employers who want to ensure they are operating legally and appropriately when employing EU nationals during the current six month grace period, Paragon Law suggests a stepped approach as Thal explains:

“The stepped approach that I am advising my clients to adopt is to engage with EEA/Swiss applicants during the job application stage and up until 30 June. This engagement should be to inform, encourage and support EEA/Swiss colleagues with EU Settlement applications but, based on this new guidance from the Home Office, it should be made clear that there is no obligation on the part of the employee to take up this support and that it will not affect their work with the business, well not until 1 July.”

“When framing questions during the interview process or asking for documents to confirm date of residency it should be done so sympathetically, making it clear to applicants that this information does not need to be given but that it will help the applicant and the business with the correct visa now and in the future to allow them to live and work in the UK after 30 June. I advise all businesses to seek advice to avoid discrimination claims during the recruitment process.”

For EU nationals seeking assistance, Paragon provides free telephone advice to EU citizens and free representation to Midlands based vulnerable EU citizens wishing to remain in the UK and retain employment.

Paragon Law works with some of the UK’s largest companies such as Uniper and Vision Express, providing advice on managing their workforce and ensuring compliance with UK immigration law.

Thalej Vasishta is named as one of the leading Immigration Lawyers in the UK according to Legal 500. Both Thalej and Paragon Law have been listed in The Times Best Law Firms 2019.

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