Renewals of employers’ foreign worker allocations to become automatic

IMPACT – MEDIUM

What is the change? The U.K. Home Office has introduced automatic renewal of Certificate of Sponsorship (CoS) allocations, and eliminated the annual renewal process licensed sponsor employers had to undergo.

What does the change mean? Employers will no longer need to make an annual application to renew their CoS allocation, and unrestricted CoS allocations of Tier 2 employees will no longer be delayed by the renewal process. The number of CoS automatically renewed by the Home Office will be based on usage over the previous allocation year. If an employer needs an unexpected allocation of unrestricted CoS in excess of the amount granted by the Home Office, it can make an ad hoc request via the Sponsorship Management System (SMS) at any time during the year.

• Implementation timeframe: Allocation renewals will become automatic from Aug. 6, 2014.
• Visas/permits affected: Employers issuing unrestricted CoS for Tier 2 skilled workers and Tier 5 temporary workers.
• Who is affected: Licensed sponsor employer
• Impact on processing times: The automatic renewals will have a positive effect on processing times by removing delays caused by the annual allocation renewal process.
• Next steps: Employers do not need to take affirmative steps. They will be contacted by the Home Office once their SMS has been updated with the auto renewal function. 

Background: The automatic renewal for unrestricted CoS in Tiers 2 and 5 is intended to make the Sponsorship Management System more user-friendly. Beginning in August, sponsor license accounts will be adjusted so that at the end of each allocation year, employers will automatically be granted a new allocation equal to the number of CoS assigned to migrants in that category during the previous allocation year. In the past, employers had to renew their CoS allocations every year and give business reasons for the requested number of CoS. The automatic renewal process will prevent cases where sponsors urgently need to assign CoS, but are unable to do so because their allocation has expired.

Only allocations that are due to expire from Aug. 6, 2014 onwards will be affected by this change. Employers can find their expiry date on the “License Summary” screen in SMS. For employers who have already submitted an allocation renewal application, the automation process will not take effect until next year. Under the automated system, three months before an employer’s allocation expires, the “Request Renewal of Annual Allocations” screen in SMS will display “Automatic Renewal” against the appropriate categories.

Renewal of allocations of CoS, which occurs annually, is not connected to the renewal of sponsor licenses, which occurs every four years.

Updated versions of the SMS user guides, including details of the automation rules and processes, are available on the GOV.UK website here.

BAL Analysis: Employers should welcome this change as eliminating the administrative burden of annual renewals. However, as the automated process assumes sponsors will require the same number of allocations from year to year, employers should still be prepared to request allocation increases in the event of spikes in the number of migrant employees they require, whether due to expansion, economic growth or project work.

This alert has been provided by the BAL Global Practice group in the United Kingdom. For additional information, please contact uk@bal.com.

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