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Home Business How will the EU SETTLEMENT SCHEME affect you?

How will the EU SETTLEMENT SCHEME affect you?

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By Yash Dubal

A Y & J Solicitors


Employers and EU citizens residing in the UK are facing the first big test of the post-Brexit immigration system later this year when new rules about settlement status come into effect. With a deadline looming later this year, many people and employers may find themselves on the wrong side of the law.

Currently, over 2.1 million EU citizens in the UK have ‘pre-settled’ status, which gives them limited rights to live and work in the country. Pre-settled status lasts for five years, after which the holder of the status must be registered for full-settled status. If they do not, they are no longer permitted to live or work in the UK. This was the scheme agreed by the UK and EU after the UK voted to leave the EU in 2016.

The pre-settled status scheme was launched as a pilot in August 2018. At that time the first cohort of 200,000 people signed up. While many of these subsequently applied for permanent ‘settled’ status, those who have not, face becoming illegal immigrants when the deadline expires in August this year. And those with pre-settled status who registered after August 2018 and who have not applied for settled status face the same problem.

EU citizens and settled status in the courts

In December last year, in a High Court case brought by the Independent Monitoring Authority (IMA), the post-Brexit watchdog for EU citizens’ rights, the IMA argued that the two-stage settlement scheme for EU citizens who want to remain in the UK breaches the UK’s Brexit Withdrawal Agreement. 

The IMA argued that huge numbers of people could become illegal immigrants overnight if they didn’t apply for the second stage on time. In court, it was successful in challenging the Home Offices position that those who do not make a second application to stay in the UK face losing their rights. The Court agreed and ruled that the scheme created so much uncertainty it breached the UK’s withdrawal deal with the EU.

Mr Justice Lane agreed that the scheme currently risks criminalising a large number of people. He said: “The consequence of limited leave coming to an end, without being followed by further leave, is extremely serious. The person concerned becomes an overstayer, who from that point is in the United Kingdom unlawfully. A person who knowingly remains beyond the time limited by the leave commits a criminal offence. In my judgment, these consequences cannot be brushed aside as merely procedural matters.”

Dr Kathryn Chamberlain, IMA Chief Executive said: “I am pleased that the judge has recognised the significant impact this issue could have had on the lives and livelihoods of citizens with pre-settled status in the UK.”

“When we brought this judicial review, our intention was to provide clarity for citizens with pre-settled status, of which there were approximately 2.2 million when we filed this case in December 2021. This judgment that the current system is unlawful provides that clarity. We will now liaise with the Home Office on the next steps.”

It is understood, however, that the Home Office is seeking permission to appeal the decision and while the legal process continues, the settled status system will continue unchanged. All this has serious implications for those with pre-settled status and those employing them.

Employers of EU citizens

It is incumbent on employers to check the status of their workers in case they are unaware of the looming deadline and get caught out by not applying for full settled status. There could well be some leeway afforded to those who have forgotten to apply, or who have become confused by the system, but as it stands, under the terms of the law, when the deadline passes for those who first applied for pre-settled status in August 2018, if they have not applied for full settled status, they will be illegal immigrants and that will have a knock-on effect for anyone employing them.

Anyone in the UK knowingly employing an illegal immigrant is committing a criminal offense. You can be sent to jail for 5 years and pay an unlimited fine if you’re found guilty of employing someone who you knew or had ‘reasonable cause to believe’ did not have the right to work in the UK. So it is much better to avoid any problems and get all the checks and applications done now, rather than get caught out later in the year.