Businesses to check EEA nationals’ right to work or risk a fall from grace

This article was written by Immigration and Global Mobility Partner Samar Shams on 30 November 2020.

Employers should have contractual provisions in place to ensure that new hires from European Economic Area (EEA) countries have the right to work in the UK. The post-Brexit transition period is coming to an end at 11pm on 31 December 2020. EEA nationals and their family members living in the UK before then may be eligible to apply for immigration status allowing work under the EU Settlement Scheme, but they do not have to apply until the deadline of 30 June 2021. Meanwhile, EEA nationals arriving in the UK after 11pm on 31 December 2020 will not have the right to work in the UK.

What will be the difference in the documentation of EEA nationals who have the right to work, but have not yet secured status under the EU Settlement Scheme, and EEA nationals who do not have the right to work because they arrive in the UK after the end of the transition period? None. They could each have a passport or national ID card from an EEA country.

The Home Office does not expect employers to distinguish between EEA nationals arriving before and after the end of the transition period, until 30 June 2021. This period between the end of transition and the deadline for eligible EEA nationals and their family members to apply for status under the EU Settlement Scheme is called the ‘grace period’. During this period, employers can rely on an EEA passport or national ID card to satisfy Home Office right to work checks. The Home Office has also stated that employers will not have to make retroactive checks on the right to work for EEA nationals after 30 June 2021.

However, it is in employers’ best interests to ensure that new hires actually have the right to work in the UK. The penalties for employing an illegal worker include a £20,000 civil penalty, an unlimited criminal fine and up to 5 years in jail. The Home Office publishes lists on GOV.UK naming and shaming employers liable for civil penalties. Business premises can be ordered to close for up to one year. The worker themselves could face a fine and up to 6 months in jail. Their wages can be seized as proceeds of crime.

The Home Office has stated that employers who undertake the prescribed right to work checks will not be liable for civil penalties. However, it has not published any statements about criminal liability. Further the defence from liability does not apply should an employer come to know that an employee does not have work authorisation.

For example, let us say an employer hires an EEA national in March 2021 and accepts an EEA passport as documentation of their right to work. If in September 2021, the employer realises that that employee does not have status under the EU settlement scheme, they must terminate employment or risk civil and criminal penalties.

The Home Office has taken on board a recommendation by the Independent Chief Inspector of Borders and Immigration to consider increasing use of the criminal penalty of closing a business for up to one year. Immigration Enforcement has also stated its intention to take increased action against sponsors of non-UK workers to prevent illegal working.

This new focus for Immigration Enforcement comes when many UK businesses are grappling with sponsorship duties for the first time, as the sponsorship regime expands to include medium-skilled roles, to mitigate the effect of the loss of free movement rights.

We recommend that employers include wording in contracts of employment, requiring employees to provide documentation evidencing their actual right to work in the UK. Employers who do not do so might suffer less than gracious treatment by the Home Office come the end of the grace period at the end of June next year.

If you have any questions about right to work checks, please contact a member of the Spencer West Immigration and Global Mobility team. We will also be presenting a webinar on this topic in early 2021, so watch this space.