IMPACT – HIGH

What is the change? The allocated quota for Tier 2 Restricted Certificates of Sponsorship (RCoS) has been exhausted for June, the seventh consecutive month the quota has been reached.

What does the change mean? Requests for Tier 2 (General) Certificates of Sponsorship earning points below the minimum 60 and a salary of less than £60,000 per year have been rejected for the month of June, and employers will need to resubmit them in July.

  • Implementation time frame: Ongoing.
  • Visas/permits affected: Tier 2 (General).
  • Who is affected: Companies applying for RCoS for non-EEA skilled migrants under the Tier 2 (General) category.
  • Impact on processing times: Rejected applications will need to be resubmitted in July, assuming that the resident market test remains valid.
  • Business impact: Companies sponsoring Tier 2 workers below the minimum salary level may need to delay work start dates and plan for continued pressure on quotas in the coming months as the backlog eases. As a result, employers may need to readvertise the positions.
  • Next steps: Employers should plan for delays to business schedules or plan alternative visa routes until removal of National Health Service doctors and nurses from the cap beginning in July eases the pressure in this route.

Background: The annual quota for Tier 2 (General) visas is 20,700, allocated into monthly quotas. In 2016, the monthly distribution was changed to provide higher quotas during the high-demand months of April through September and lower quotas in other months, thereby shifting pressure on months at the end of the fiscal year (December through March). The exhaustion of quotas at the end of the fiscal year, however, has carried over into the new fiscal year. When the monthly quota is reached, applications are ranked by points obtained, with more points earned for shortage occupations, higher salaries, and certain Ph.D.-level roles. The trend requiring ever higher salaries to be successful within the cap has continued this month, while employers wait for the impact of the removal of NHS doctors and nurses from the cap to be felt.

BAL Analysis: As BAL has reported, the pressure on Tier 2 quotas is a long-term trend that continues to pose challenges for employers recruiting non-EU workers in a tight labor market. The quotas have been exceeded every month since December 2017, and as the excess applications roll over to the next month, a backlog has developed. The Home Office announcement earlier this month to remove NHS doctors and nurses from the Tier 2 caps has been met with approval by business, but it is not yet in effect and will potentially take time to ease the backlog. Companies that recruit higher earners will continue to be more likely to have their applications approved. Employers should consider salary as the deciding factor in the approval of an RCoS request and they should plan for all applicants on lower salaries to be delayed and potentially disqualified until, and if, the system returns to pre-December 2017 levels of use. While applications do roll over each month, this is only automatic while the advertising remains valid (typically six months). A more detailed risk assessment should be conducted for all roles prior to advertising.

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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