Over 4.9 million people have now applied to the EU Settlement Scheme according to the Home Office. This includes more than 4.4 million applications from England, 243,600 from Scotland, 80,700 from Wales and 78,500 from Northern Ireland up to 31 December 2020. In December alone there were 402,300 new applications to the scheme as people applied before the end of the transition period. Minister for Future Borders and Immigration Kevin Foster said: "Reaching almost 4.9 million applications to the hugely successful EU Settlement Scheme is terrific news. There are less than six months before the 30 June 2021 deadline, and I would encourage all those eligible to apply now to secure their rights under UK law. A wide range of support is available online and over the telephone, if you need it and we are funding 72 organisations across the UK to ensure no one gets left behind."

Despite this, the figures also suggest an increased number of EU applicants have been refused to the EU Settlement Scheme. One question of central importance relates to the implications for UK employers? If an employer is advised that an employee's application to the EU Settlement Scheme has been refused this will require careful consideration of the facts and what steps may be required to resolve the situation. An application for settled or pre-settled status can be refused on the grounds of suitability or indeed eligibility. For example, where an applicant was not resident in the UK by 11.00 pm on 31 December 2020 or where they are not an EEA national can culminate in an automatic refusal. Other grounds may be a previous poor immigration history or criminal convictions. Where an application is refused, the employee can reapply up until 30 June 2021. However, a previous refusal under the EU Settlement Scheme may be difficult to overturn with the Home Office.

Where settled or pre-settled status is denied under the EU Settlement Scheme, the employee will not automatically have the right to live and work in the UK after 30 June 2021. The position of the employee is that they will need to apply for permission to work in the UK using an alternative immigration route such as a Skilled Worker visa under the Points Based System (PBS). It is also possible that an employer may find itself in a situation where they are illegally employing the employee and could be at risk of a significant financial penalty up to £20,000 per illegal worker. We understand the Home Office is considering a number of other options regarding the EU Settlement Scheme in the near future.

How can we prepare for the new immigration system?

Consider the need to apply for a sponsor licence to the Home Office. This is a requirement for any business wishing to recruit from either the EU or outside the EU to Northern Ireland. Over 31,000 companies in the UK already hold a sponsor licence with the Home Office for hiring global talent. This licence can be used for recruiting both EU and non-EU nationals with no limitations on the number of employees employed through the licence. With the end of freedom of movement from 11 pm on 31 December 2020, there will be a mandatory requirement for a sponsor licence to be held with the Home Office for hiring any EU or non-EU nationals.

This article has been produced for general information purposes and further advice should be sought from a professional advisor. Please contact our Business and Private Immigration team at Cleaver Fulton Rankin for further advice or information.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.