Right-to-work regime

The Home Office has updated its right-to-work guidance following the expiration of the Brexit transitional arrangements for EU workers in the UK on 30 June 2021.

EU residents (excluding Irish citizens) must have valid authorisation to work in the UK by 1 July 2021, either in the form of EU settled or pre-settled status or the UK work visa. The amendments would impose new levels of bureaucracy, costs, and timelines on firms in the United Kingdom that hire EEA nationals.

The United Kingdom’s right-to-work regime

Sections 15 to 25 of the Immigration, Asylum and Nationality Act 2006, section 24B of the Immigration Act 1971, and Schedule 6 of the Immigration Act 2016 contain legislation governing illegal labour.

Employers in the United Kingdom are required to verify each employee’s immigration and employment status before to hiring.

Employers must conduct right-to-work document checks in accordance with the most recent Home Office guidance to ensure that each candidate is qualified to do the job for which they are recruiting.

Failure to comply with this duty may result in enforcement action against the employer under section 15 of the 2006 Act, including civil penalties of up to £20,000 per illegal worker, and directors may face criminal sanctions if it is established that they had a reasonable belief an individual lacked the right to work.

For the Home Office, the unlawful working regime is a cost of doing business in order for firms to access the global talent market.

It’s difficult to argue with the legislation’s spirit, given the evidence that unlawful work results in the exploitation of vulnerable individuals, bad working conditions, illegal migration, tax evasion, and lower overall wage levels throughout the economy.

However, depending on employers to function as plain-clothes immigration enforcement is onerous and troublesome, especially when rules change frequently and firms must account for these changes operationally to avoid unwelcome enforcement action.

While civil penalties have decreased significantly since the Windrush Scandal exposed systemic problems with proving immigration status within the Home Office, employers and their legal advisers should keep in mind that illegal working fines remain a lucrative revenue stream for the Home Office and are best avoided through compliance.

Changes to the right to work effective 1 July 2021

The most recent edition of the Home Office’s right-to-work guidance outlines how companies should conduct compliant pre-employment checks, and in some cases follow-up inspections, in order to rely on a statutory justification in the event of allegations of illegal activity.

The most recent advice document is 53 pages long. It requires advisers and employers to provide cross-references to other codes of practise and previous versions of the guidance when employment began on or after 16 May 2014 (29 June 2018 guideline) or on or after 29 February 2008. (October 2003 guidance).

Additionally, additional information on how to avoid unlawful discrimination was released in light of the new points-based immigration system scheduled to begin in December 2020, as well as specifics on the Covid-19 interim adjusted right-to-work screening process.

Changes to the list of admissible papers in the most recent version mean that EEA citizens and their family members beginning employment on or after 1 July 2021 will no longer be able to depend on an EEA passport or national identity card to show their eligibility to work. The change is not retroactive for employees hired prior to 30 June 2021.

In practice, the modifications may become problematic if an individual loses their right to work due to a lack of EU settled status (EUSS) or work authorization. 400,000 EUSS applications remain unprocessed, and it has been widely reported that hundreds of thousands of impacted individuals may be uninformed of the new requirements and so lose their status.

The Home Office provided a 28-day grace period to eligible persons who applied for EUSS after the deadline of 30 June 2021, but fears persist that a sizable proportion may be out of status even after this grace period.

If an employer discovers that an employee no longer has the right to work as a result of a document check, the new guidance reveals potential inconsistencies with current legislation, such as when an employee fails to apply for EUSS or their application is denied. Here, the employer must determine whether to remove the employee on the grounds of loss of employment rights, which may result in unfair dismissal claims or to face Home Office fines for illegal employment.

Complications may also arise if an individual loses their ability to work while awaiting a judgement on their EUSS application, as set out in schedule 4 of the Immigration (Citizens’ Rights Appeals) (EU departure) Regulations 2020, which alter section 3C of the Immigration Act 1971.

The EU Exit Regulations and the Immigration Act 1971 indicate that section 3C leave’ is extended while an appeal under the EUSS is underway or could be brought, but do not state expressly that applying under the EUSS extends section 3C leave. However, one could argue that because EUSS applications are valid applications for restricted leave to enter or remain, 3C leave is likewise extended while the EUSS application is being considered.

Additionally, the new guidance does not appear to distinguish between EEA nationals who are eligible for EUSS but apply late, as they are entitled to do and those who may abuse the system by applying for EUSS despite being ineligible.

Checks for the new normal in documents

Along with changes to EU worker status, the right-to-work system will undergo further changes beginning 1 September 2021 with the closure of the temporary Covid right-to-work scheme.

The Home Office launched this scheme in March 2020 to enable companies to undertake virtual document checks by confirming electronic versions of appropriate documents with individuals via live video communications.

The scheme was originally scheduled to end on 16 May 2021, but due to outcry from employers and industry groups regarding the unrealistic time frames required to reinstate physical, face-to-face checks while lockdown restrictions remained in place, the closure was delayed twice and is now scheduled to conclude on 31 August 2021.

Employers can continue to use the Home Office’s Employer Checking Service (ECS) to check an individual’s right to work online, but only in limited circumstances and with the individual’s approval.

With the widespread use of hybrid and remote working arrangements across the economy, it seems reasonable to investigate how the right-to-work regime may be improved on a permanent, digital basis to accelerate inspections and assist businesses in completing compliant checks. For example, rather than arbitrarily resorting to the face-to-face requirement, extending existing online checks to a broader group of workers or making virtual document checks an indefinite element of the system.

While legal advisers, employers, and human resource departments may have become accustomed to the changing nature of the right-to-work regime, now appears to be an appropriate time for the Home Office to propose a more pragmatic and burden-free method for all parties.