Paul Holcroft: Why the scrapping of the EU Settlement fees is good news for employers

EU Settlement Scheme

The EU Settlement Scheme is set to be fully rolled out from 30 March 2019, giving all EU nationals the opportunity to obtain clearance that will allow them to continue to live and work, in the UK legally post Brexit.

When first announced in June 2018, applications were to be subject to a cost of £65 for adults and £32.50 for children, something that was likely prohibitive for many employees operating within low paying sectors. In a speech on Monday 21 January 2019, Prime Minister Theresa May announced that all applicants would no longer be subject to a fee, essentially removing a barrier that could, for many, have made the process difficult and prevented an application being submitted in time. This means that not only will future applications be free of charge, any employee who has already paid as part of a test phase will also receive a full refund.

Since their announcement, the fees will likely have caused concern for many employers, especially if they employ a significant number of individuals from Europe. Brexit may have already resulted in some employees being concerned about their job stability, which could have had a detrimental effect on their overall productivity and morale. A dissatisfied and unmotivated workforce may not be as inclined to work as quickly or efficiently as is required and be more difficult to manage. Some workers may even have considered leaving the UK as a result of this, depriving the company of otherwise highly valued and skilled employees. In this uncertain time, the removal of the fees can help to allay ongoing fears about job security, which can work to increase employee engagement. It can also help to make living and working in the UK remain an attractive option to any additional, fully qualified EU nationals who may have otherwise considered staying away.

In order to incentivise employees to have made the application, employers may have been considering covering the cost for the applications themselves, something that would likely have been difficult for smaller businesses. Failure to submit an application by 30 June 2021 will mean that the employee is living and working in the UK illegally. The result is that the company they work for would technically be employing an illegal worker, which can lead to a significant fine of up to £20,000 regardless of whether the employer was aware of the situation or not. Paying for their employees to submit the applications may have helped employers to avoid this but could have also given rise to further issues. The company would have had to assess how many of its employees the business could feasibly afford to pay for and if it should also cover the cost of the workers’ families. This could have led to accusations of favouritism or even indirect discrimination if they were unable to justify why they had chosen to assist one employee over another. Now there are no longer fees attached to these applications, employees are more likely to ensure they do submit the applications and help avoid further issues for the company down the line.

Employers should remember that a diverse workforce can be highly beneficial to the overall development of a business, providing individuals from varied backgrounds the opportunity to contribute to ongoing plans and strategies and broaden out existing language skills to attract further clients. Although it is still advisable for employers to encourage their workers to submit applications under the scheme and to consider providing time and resources at work with which to do this, the removed cost will make likely make the process much smoother.

 

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About Paul Holcroft

Paul Holcroft is Associate Director of Operations at HR, health and safety and reward consultancy Croner. He is also a specialist of employment law and a regular seminar speaker.

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