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IMPACT – HIGH
What is the change? The Migration Advisory Committee has published its final report detailing its study of EU/EEA workers in the UK. The report considers the total impact of EEA labour on life in the UK, including economic and social impacts on domestic wages, unemployment, prices, productivity, training, the provision of public services, public finances, community cohesion and well-being to provide a researched basis for migration policy.
The report makes key recommendations to the UK Government on regulating EEA workers after the UK leaves the European Union and the post-Brexit implementation period ends on 31 December 2020. Its recommendations are not binding, but the report suggests that the UK will move towards a single, unified immigration system for EEA and non-EEA nationals in which low-skilled migration is substantially cut, and the existing Points Based System Tier 2 routes for skilled workers are reformed for wider use.
Key recommendations:
The MAC report recognizes that “Free movement has the virtue of a low bureaucratic burden but at the price of losing control over both the level and type of immigration into the UK”. The MAC therefore recommends government policy should be to:
Specific Tier 2 (General) recommendations include:
Background: The MAC is an independent committee of experts that produces reports and recommendations to the UK Government to provide an objective evidence basis for migration policy. In July 2017, the Home Office commissioned the MAC to study current and future EEA migration patterns and the impacts of EEA workers on the domestic labour market, as well as to make recommendations on how to align the UK’s post-Brexit immigration system with modern economic goals. The committee conducted a Call for Evidence and published interim results of responses from business and other stakeholders in March. Those results indicated that businesses remain concerned about a future immigration system that limits their ability to access EEA labour.
Analysis & Comments: The MAC research produced detailed evidence to support its findings on the impact of EEA migration on the UK, which are summarized below.
The report is lukewarm in its support of the move to a managed migration system for EEA nationals, recognizing “A managed migration system could benefit the resident population though there would be winners and losers and the size of the benefits are likely to be modest”. However, its proposed shift towards higher-skilled migration means that while the end of free movement will cut low-skilled EEA access to the UK from 2021, changes to the existing Tier 2 visa system (by removing the cap, widening the range of jobs permitted, and reducing bureaucracy as detailed above) should either maintain or widen access to the UK for medium-skilled workers. Many employers would welcome an improved and enlarged Tier 2 system, although arguments that employers made during the Call for Evidence for sector-based schemes to ease loss of lower-skilled workers in retail, hospitality, social care etc. or regional variations have not been accepted by the MAC.
Source: Deloitte LLP. Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 1 New Street Square, London EC4A 3HQ, United Kingdom.
IMPACT – MEDIUM
What is the change? In a series of technical notes published last week, the UK government has set out the implications if the UK leaves the EU on Brexit Day (March 29, 2019) without reaching a withdrawal agreement, including to the rules governing travel and mobility.
What does the change mean? Employers and individuals should understand the default requirements and restrictions on mobility for UK and EU citizens in the event of a “no-deal” Brexit.
Key points:
Analysis & Comments: While the UK government continues to work toward a comprehensive withdrawal agreement with EU negotiators, it recognizes that with Brexit just six months away and a complex legal process to ratify any agreement, a no-deal outcome remains a possibility. UK employers and business travellers should factor in additional time and processing if immigration controls are placed on travel within Europe post-Brexit. British citizens should consider renewing their passports now if they hold older, longer-validity passports (issued more than nine years and six months before the intended date of travel) or if they will expire within six months of intended travel to a Schengen country. British citizens planning travel to the Schengen region post-Brexit should familiarize themselves with the strict counting rules that would apply to them if there is no deal in place.
The Migration Advisory Committee has proposed changing visa processes to make it easier to hire international students. The proposal was one of several recommendations included in a 117-page report issued this week.
Former Home Secretary Amber Rudd commissioned the MAC in 2017 to assess the impact of international students in the U.K. The commission subsequently issued a call for evidence and based its recommendations in part on the responses stakeholders provided. The MAC recommended that the government:
The MAC declined to endorse the idea of introducing a separate post-study visa program, saying it would drive up demand for short degrees in order to retain temporary working rights—a point that the committee’s chair, Professor Alan Manning, acknowledged would be disappointing to the education sector.
Analysis & Comments: While the MAC introduced changes that would ease the processes for obtaining a Tier 2 visa upon completing coursework, it stopped short of proposing a separate post-study visa program. It also recommended that international students continue to be counted in the government’s net migration statistics, a disappointment to the education sector at a time when officials are under pressure to reduce overall net migration. The government will review the MAC’s recommendations and will set out its position in response to the inquiry’s findings.
What is the change? UK Visas and Immigration is no longer accepting visa applications at the British Consulate in New York, which will cease operations Oct. 31.
What does the change mean? New visa applications in the U.S. will be mailed to VFS, the visa processing service that contracts with the U.K. government. Applicants will continue to attend biometrics appointments at VFS centers.
Background: In June, UKVI announced that visa processing would end in New York, the former U.S. processing hub, in October. UKVI also unveiled numerous pilot programs as it moves toward digitalization and onshoring of visa processing. Among the other changes, electronic applications will be more widespread and processing will be centralized in Sheffield, England; compliance audits of employer sponsors will make greater use of technology and electronic communications between employers and the agency; and premium visa services will be unbundled to give applicants greater choice in selecting which enhanced services they are willing to pay for.
Analysis & Comments: Though UKVI has indicated that visa application processing times will remain the same, applicants in the U.S. applying for U.K. visas should be aware of the changes and plan for the possibility of delays. The British Consulate General in New York previously processed approximately 95 percent of all applications within posted processing times, but the transition to the Decision Making Center in Sheffield may have an impact on the turnaround times for new applications during the initial ramp-up period.
This alert has been provided by the BAL Global Practice group. For additional information, please contact your BAL attorney.
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What is the change? The U.K. will pilot a seasonal work permit program for farm workers next year.
What does the change mean? The pilot will provide up to 2,500 work permits per year to non-EU workers. The permits, which will be valid for up to six months, will be issued to help alleviate seasonal labor shortages. Officials will review the program at the end of two years to determine how best to settle on long-term solutions for labor needs in the farming industry.
Background: Home Secretary Sajid Javid and Environment Secretary Michael Gove announced the creation of the pilot program this week. Few details about how the program will be implemented are available at this point, but Gove said the pilot will “ease the workforce pressures faced by farmers during busy times of the year” and that officials “will review the pilot’s results as we look at how best to support the longer-term needs of industry outside the EU.”
BAL Analysis: The creation of the pilot program has received a muted response from U.K. farmers since the current shortfall of labor is said to be around 35,000 workers. That said, it is a sign that the U.K. is considering the needs of individual industries as it prepares to leave the European Union. BAL will continue to monitor the implementation of this program and will provide more information as it becomes available.
This alert has been provided by the BAL Global Practice and our network provider located in the United Kingdom.
What is the change? The allocated quota for Tier 2 Restricted Certificates of Sponsorship has been exhausted for July. Requests from applicants with fewer than 41 points and with a salary below £41,000 per year were rejected. Employers will need to resubmit these requests in August.
What does the change mean? While the quota was exhausted for the eighth consecutive month, the points and salary cutoff was significantly lower than it was in May and June. This is likely a sign that demand for Tier 2 Restricted Certificates of Sponsorship is easing up, especially after the U.K.’s recent announcement that National Health Service doctors and nurses were removed from the quota.
Background: The annual quota for Tier 2 (General) visas is 20,700, allocated into monthly quotas with more visas allocated for the high-demand months of April through September. U.K. Visas and Immigration removed doctors and nurses from the quota in June, a move that appears to have already had a positive impact on the quota. The quota has been reached every month since December 2017; however, the points and salary cap dropped significantly compared with recent months. The points cutoff, for example, was 46 in April, 51 in May and 60 in June.
BAL Analysis: Pressure on Tier 2 quotas continues to pose challenges for employers recruiting non-EU workers. However, the removal of NHS doctors and nurses from the Tier 2 caps was met with approval from businesses and the backlog that built up over a period of months may be easing. BAL will follow matters in the U.K. to see if the drop this month becomes a long-term trend.
The United Kingdom has published a 98-page white paper that outlines the country’s vision for the U.K.’s post-Brexit relations with the European Union.
The white paper envisions a future where the U.K. and EU would negotiate visa-free travel arrangements, establish intra-corporate transfer agreements and promote student mobility, and where the U.K. would maintain its open border with Ireland. Prime Minister Theresa May said in an introduction to the white paper that the government was working to fulfill the mandate of voters while still maintaining a strong relationship with EU member states.
“Our proposal is comprehensive,” she wrote. “It is ambitious. And it strikes the balance we need – between rights and obligations. It would ensure that we leave the EU, without leaving Europe.”
The white paper is split into sections on economic relations, security partnership, EU-U.K. cooperation and institutional arrangements. Among other key provisions on immigration, the document said:
BAL Analysis: The white paper is the U.K.’s most detailed indication to date of how the U.K. would like to shape its post-Brexit relations with the EU. Still, it is not clear how the politics will play out in the U.K., where May has come under sharp criticism from elements within her own party who favor a cleaner break with the EU, i.e., a “hard Brexit.” Nor is it clear how the EU will respond the U.K.’s proposals. Some of the proposals are still lacking in specifics, with the white paper saying “details of the UK’s future immigration system will be set out in due course.” BAL will continue following Brexit-related developments and will provide updates to clients as negotiations continue.
This alert has been provided by the BAL Global Practice group in the United Kingdom. For additional information, please contact uk@bal.com.
Brexit secretary David Davis and foreign secretary Boris Johnson have resigned from the government in protest of Prime Minister Theresa May’s softer Brexit plan that would keep the United Kingdom in the European Union customs union and single market.
The resignations pose a threat to May’s already fragile government and could lead to a no-confidence vote to oust her from power. Labour Party leader Jeremy Corbyn said that May’s government “has no authority left and is incapable of delivering Brexit.” Those who oppose the U.K. leaving the EU have renewed calls for a second Brexit referendum.
On Friday, May met with her cabinet to agree on a Brexit plan that would create a free-trade zone between the U.K. and EU for goods and require the U.K. to follow EU regulations related to goods and agricultural products, but not services. The U.K. would also allow the EU Court of Justice to retain jurisdiction over some issues. There is no indication that the EU would accept the proposal, especially if the U.K. seeks free movement of goods while restricting the free movement of people.
By Sunday, Brexit Secretary David Davis resigned, saying that he did not support the plan and that May had given away “too much too easily” in Brexit negotiations. He was replaced Monday by former housing minister Dominic Raab. On Monday morning, Foreign Secretary Boris Johnson followed suit and resigned in a letter arguing that the proposal would not allow the U.K. to make its own laws, but would relegate the U.K. to the “status of a colony.” The Brexit “dream is dying, suffocated by needless self-doubt,” the letter says. Jeremy Hunt, former health secretary, was named to replace Johnson.
BAL Analysis: May’s proposal indicates that the government is leaning toward a softer break from the EU, but the loss of support of “hard Brexit” cabinet members who want a clean break from the EU could make it more difficult for the proposal to gain the support of pro-Brexit members of parliament. In the immediate term, the resignations could topple May’s government, which is held together with the support of Northern Ireland’s Democratic Unionist Party. A no-confidence motion requires 48 Tory signatures to trigger a vote in the House of Commons. May said she will contest such a motion.
What is the change? The Home Office has reversed a rule that took effect in January on calculating acceptable absences during the five-year qualifying period for permanent residence.
What does the change mean? The old calculation rule that is less strict will be reinstated for immigrants who entered the U.K. before Jan. 11 and will remain in effect for the next five years. Additional immigration rule changes due to come into effect on Friday can be found here.
Background: Tier 2 (General) skilled worker migrants who have lived and worked in the U.K. for five continuous years are eligible to apply for indefinite leave to remain in the U.K. on a permanent basis. The Home Office requires not only a five-year visa, but proof that the migrant has been physically resident in the U.K. throughout the period as evidenced through a schedule of absences. Applicants are disqualified if they have been absent from the U.K. for more than 180 days during a 12-month period, but the immigration rules govern how the absences are calculated. Before Jan. 11, the calculation method looked at whether the applicant was outside the U.K. for more than 180 days during any of the separate five 12-month blocks preceding the application date. It was therefore straightforward to analyse absences and calculate the optimum time to submit the application to ensure that business travel did not undermine the 180-day rule. Since Jan. 11, a stricter rule was applied that counted 180-day absences in any 12-month period during the previous five years. Following lobbying from stakeholders, the pre-Jan. 11 rule has been reinstated for all migrants who entered the U.K. before that date, and that calculation method will be in effect for the next five years.
BAL Analysis: Employers and migrants applying for Indefinite Leave to Remain (permanent residence) should be reassured by the policy reversal that applications can be submitted on the same basis as originally anticipated. Any ILR applications made now and in the next five years will be processed under the old rules, which allow for some tactical timing of the filing. New arrivals to the U.K. should be aware that their ILR applications will ultimately need to meet the new rules of no aggregate absence of 180 days in any 12-month period within the five years. A schedule of absences from the U.K. should therefore be maintained continually, and applicants should seek advice from BAL if frequent business travel or extended single absences (personal or business) will take them over or close to the 180-day threshold.
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.
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.