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IMPACT – MEDIUM
What is the change? The Home Office has published new right-to-work guidance that clarifies employers’ obligations in verifying employees’ work authorization.
What does the change mean? The guidance clarifies steps for employers in checking right-to work documentation for all U.K. employees and gives employers who follow the guidelines a “statutory defense” against any potential illegal working claim. The guidance has been updated to reflect the latest changes to the U.K.’s Immigration Rules, and now includes details on how to treat EEA nationals who lack work documentation but who have been long-term residents since before 1988 (“Windrush” generation workers), Croatian nationals, and workers transferring their employment under Transfer of Undertakings (Protection of Employment), or TUPE, as a result of a merger or acquisition.
Key changes:
Background: In 2016, the U.K. made it a criminal offense to work illegally or to employ an undocumented worker if the employer knows or has “reasonable cause to believe” it is doing so. Authorities can seize wages and assets and employers may face up to five years of imprisonment and an unlimited fine. As a best practice, employers should follow the specified three-step regime to ensure acceptable right-to-work check documents are retained prior to employment, to follow-up these right-to-work checks and to retain records as specified in the guidance.
BAL Analysis: The amendments to the guidance are not extensive and the overall immigration compliance and right-to-work framework remain unchanged. However, all U.K. employers should ensure up-to-date right-to-work guidance is available to their HR professionals and take this as an opportunity to review HR procedures to ensure that they are in full compliance.
This alert has been provided by the BAL Global Practice group in the United Kingdom. For additional information, please contact uk@bal.com.
Copyright © 2018 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.
IMPACT – HIGH
The U.K. Home Office has published its Statement of Intent detailing how it will administer the mass registration of EU nationals currently resident in the U.K. in light of Brexit.
There are approximately 3.5 million EU citizens currently living in the U.K. on the basis of their EU passports alone, exercising their right to free movement under EU law. Under the terms of the Withdrawal Agreement between the U.K. and the European Union reached in December 2017, once the U.K. leaves the EU on March 29, 2019 (“Brexit”), there will be a transition period extending free movement rights until December 31, 2020 during which time EU nationals and their family members can continue to enter, live and work in the U.K. visa-free. EU nationals either already living in the U.K. or arriving before Dec.31, 2020 should apply for “settled status” or “pre-settled status” in order to document their right to reside in the U.K. beyond this transition period. The Statement of Intent sets out the framework for EU nationals (and likely EEA and Swiss nationals) to register their legal right to reside in the U.K. under the terms of the Withdrawal Agreement, either as permanent residents or in a temporary status that will allow them to become permanent residents after five continuous years in the U.K.
Summary of EU Settlement Scheme:
BAL Analysis: Generating documentation for 3.5 million migrants is a gargantuan administrative task and will depend on the Home Office utilizing the latest technology for online applications as well as applying a “light touch” in terms of documentary evidence. While the commitment to allow EU nationals to remain in the U.K. was made clear by the Withdrawal Agreement, the Statement of Intent provides procedural details on the timing and steps for EU nationals to secure this new documentation.
Although EU nationals and their employers do not need to take any steps immediately, they should be aware of the expected deadlines and prepare to apply when the EU Settlement Scheme is launched in Autumn 2018. EU nationals should be aware that this is a mandatory registration scheme and is not optional (unlikely previous EU/EEA registration schemes)—the right of EU citizens to remain in the U.K. post-Brexit is not automatic and those who do not apply within the published deadlines will become undocumented with no legal right to live and work in the U.K.
EU nationals should weigh various considerations as to the timing of their registration depending on their individual circumstances. BAL has produced a Brexit decision tree to help employers identify different EU migrant groups based on date of entry to the U.K. and support their registration under the post-Brexit settlement scheme.
UK Visas and Immigration is piloting significant changes to U.K. visa processing operations and will be rolling them out to business users over the next six months, as the agency continues its push to digitalize. UKVI intends to make ever greater use of online platforms to deliver services, process visa applications and audit sponsoring employers. This move toward great digitalization should ultimately provide employer-sponsors and U.K. visa applicants faster turnaround times and consistency of service, but may also lead to greater levels of scrutiny.
Key changes are highlighted below:
BAL Analysis: BAL supports UKVI’s commitment to digitalization, as online systems will generally improve efficiencies to deliver a better overall experience for corporate and individual visa applicants. U.K. employers should be aware, however, that digital technologies will also provide UKVI with greater means to audit and monitor sponsor compliance with license-reporting and recordkeeping requirements on a more regular basis.
U.K. Visas and Immigration has published a Statement of Changes to the U.K.’s Immigration Rules, including changes to the Tier 2 route for skilled workers that will be of direct relevance to U.K. sponsoring employers.
The most important change is that nurses and doctors will no longer be counted in the overall 20,700 quota for Tier 2 (General) restricted certificates of sponsorship. UKVI stated that this change was made in response to the acute shortages and pressures currently facing the National Health Service, and the fact that the limit has been oversubscribed in each month since December. The changes will mean that health sector employers will be able to sponsor doctors and nurses directly from the shortage occupation list, without requiring restricted Tier 2 certificates of sponsorship.
The following additional changes are being made to Tier 2:
Additional changes will impact other immigration categories, including:
Additional information on the changes, which come into effect on July 6, can be found here.
BAL Analysis: The change to exempt doctors and nurses from the quota has been campaigned for vigorously as a means to relieve the National Health Service from a resourcing crisis, but will also have a positive effect on corporate employers looking to fill skilled vacancies under the Tier 2 (general) scheme. Fewer applicants for Tier 2 Restricted Certificates from the NHS, which currently accounts for half of all applications, should equate to greater access for other U.K. employers and a return to situation where the monthly quota availability largely meets employer demand. The changes for doctors, nurses and Croatians will free up places within the limit for other employers, but because these changes will be kept under review, there remains a possibility of a policy reversal.
What is the change? The U.K. has announced that it will launch a start-up visa route in the spring of 2019.
What does the change mean? The visa route will be available to foreign entrepreneurs who have an endorsement from a university or an approved business sponsor, such as an accelerator. The route is likely to supersede the current Tier 1 (Graduate Entrepreneur) visa route, which is currently available only to applicants who hold a U.K.-recognized bachelor’s degree, master’s degree or Ph.D.
Background: The U.K. announced that it would launch the start-up visa route as part of London Tech Week, recognizing the demand for changes to the entrepreneur category from stakeholders in the tech community and on recommendation from the Migration Advisory Committee.
It is difficult to gauge how broad an impact the visas will have. Currently, the Tier 1 (Graduate Entrepreneur) visa route is available to applicants who (1) hold a U.K.-recognized bachelor’s degree, master’s degree or Ph.D.; (2) have an endorsement issued in the last three months from an authorized U.K. institute of higher education; (3) have at least £945 in savings for in-country applicants and £1,890 for out-of-country applicants; (4) have met the applicable English language requirement; and (5) have permission from their sponsor to remain in the U.K. if their sponsor is a government agency or an international scholarship agency.
With the newly announced visa route, the U.K. intends to open up to “a wider pool of talented business founders,” but few details are available yet regarding who will qualify for the visas or how many will be available.
BAL Analysis: The new visa program is welcome news and will provide a new route for some entrepreneurs coming to the U.K. Detailed information on the visa route is not yet available, however, and the impact could be limited. Companies will continue to use Tier 2 (General) visas to meet the bulk of their high-skilled immigration needs. BAL will follow developments in the U.K. and will provide additional information on the new visas as it becomes available.
U.K. employers should plan for increased challenges in recruiting high-skilled workers from outside the EU, after official Home Office figures recorded a consecutive six-month pattern of Tier 2 (General) visa quotas being met. Hundreds of employer applications have been refused over the last half year based on the quota provisions that were originally set in 2010 and, until December 2017, provided ample visas to meet employer demand. It now appears that quotas will be routinely exceeded and employers should consider the situation as a long-term trend and not just a system glitch.
Some of the contributing factors to the skills shortages are a tight labor market and the “Brexodus” of talent from the U.K. as European Union migrants opt to leave the U.K. ahead of Brexit, as well as systemic problems in the way the U.K. trains its labor force. The government is facing pressure from specific sectors to ease Tier 2 quota restrictions, in particular to lift the quotas on doctors from outside the EU (who are essential to the operation of the National Health Service and account for one third of all Restricted Certificates of Sponsorship, or RCOs, issued). However, Prime Minister Theresa May recently rejected this proposal, and it is unclear whether the government will spend resources to make piecemeal adjustments to the system, given that the entire U.K. immigration system will be overhauled shortly due to Brexit. Further, the Conservative Party’s political commitment to reducing net migration to the tens of thousands remains firmly in place, despite opposition from the business community, suggesting that quotas, however unpalatable, are here to stay.
Here’s a summary of the current Tier 2 (General) RCoS system and how businesses can adapt to this tougher immigration environment:
Tier 2 quotas
Where U.K. employers can show there is no suitable resident worker to fill a role, they may apply for an RCoS. The number of RCoS available nationally to all U.K. employers is capped at 20,700 per year. This overall quota is distributed unequally to provide greater availability for high-demand months and lower availability in other months. During the peak months of April through September, the Tier 2 quota is 2,200 per month; then, during October through February, it is lowered to 1,500 per month and in March it drops to 1,000.
Points system
Employer applications may be submitted up until the fifth of any month, and will be considered by the Home Office by the 11th of the month. Priority will be given to applications based on a points system which prioritizes shortage occupations, then certain Ph.D. level roles and then applies points on a sliding scale based on salaries, with lower salaries earning fewer points and higher salaries being awarded more points. Applications with the highest number of points are allocated first from the monthly pot. While the exact qualifying points are an unknown quantity each month, there is a clear trend of the qualifying salary level raising higher and higher, with roles offering lower salaries falling outside the quota. In April, the points threshold was approximately 46, and applicants, where their prospective employer has conducted a resident labor market test, had to meet a threshold salary of above £50,000, while in May the points threshold was 51 points, so roles paying less than £55,000 were rejected, effectively disqualifying hundreds of applications at the “low” end of the skilled worker pay range (despite otherwise being considered lucrative professional positions).
Refiling the next month
A large number of applications have been rejected over the past six months due to high demand and exacerbated by the logjam caused by unsuccessful applications being resubmitted the next month. The number of applications submitted has consistently been double the monthly quota allotment. Where an application is rejected, employers may refile the following month and each subsequent month. In the recent trend, a spillover effect means refiled applications quickly fill the available quotas for the next month, adding to the pressure. Refiling is only possible where the resident labor market test is still valid (typically within six months of the job advertisement being posted). This is less problematic for employers with rolling recruitment programs, but theoretically after five applications for an RCoS, an employer would have to start at the beginning and readvertise the role to confirm that no suitable resident worker is available. The points system arguably incentivizes companies to offer higher salaries to improve their chances of obtaining a Tier 2 RCoS, but salaries obviously must be within the advertised range and in line with company protocol to avoid any discrimination issues.
Planning ahead
The high demand in the Tier 2 category is likely to continue for several months, if not indefinitely. The trend began in December 2017 and carried into the new fiscal year as the higher quotas in April and May were not sufficient to account for the backlog from previous months. Multinational companies are likely to have felt the impact already, with employers who recruit less frequently being more likely to get caught by the increasingly restrictive quota.
Employers must learn to operate in this new environment by:
Alternative options
Not all migrants are subject to the RCoS quota. EEA nationals and their family members, individuals qualifying for dependent spousal visas, intracompany transferees with at least one year of experience within the corporate group (unless exemptions apply), Tier 2 high earners and Tier 4 students graduating in the U.K. all fall outside the cap. It is important that employers explore all alternative visas or exemptions from the cap and engage in strategic planning, such as ensuring that the Tier 5 temporary work and Tier 2 (ICT) options are used where possible to allow employees to start work while resubmitting their applications, and looking at temporary work locations in another overseas office while waiting for U.K. quota availability. Although employers and migrants value Tier 2 (General) status because it leads to permanent residence, this benefit must be weighed against the increasingly restricted quota system. It is also now imperative that a credible risk assessment based on salary is made before any resident labor market test is conducted and the role is advertised, and certainly before contingent offers are made, rather than expecting quota availability to improve. BAL has extensive experience in helping employers strategize and can advise on compliant solutions on a case-by-case basis.
Copyright © 2018 Berry Appleman & Leiden L LP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.
The new Home Secretary, Sajid Javid, has launched an immigration documentation scheme designed to provide redress to the thousands of “Windrush generation” Britons and their families, following the public scandal in which they were unfairly caught up in the government’s “hostile environment” policy for illegal migrants. Javid was appointed to replace Amber Rudd, who was forced to resign having “inadvertently misled” Parliament about the Home Office’s numerical targets for deportations and unfair treatment of these British citizens and residents due to lack of specific documentation.
As of May 30, the scheme allows the Windrush generation and other long-time undocumented residents to apply for documents confirming their British citizenship free of charge. The program applies to nationals of Commonwealth countries who settled in the U.K. before 1973, their children under 18 who have been continuously present in the U.K., and individuals whose settled status lapsed because of spending more than two years outside the U.K. In addition, individuals of any nationality who arrived between 1973 and 1988 who are lawfully settled in the U.K. are eligible to apply for documentation verifying their status as U.K. permanent residents. Successful applicants will be granted a status document, although not a British passport (which must be applied for separately and at a cost). A movement to compensate those who have been turned away from work or who have been unfairly denied housing or National Health Service support has led the government to open a call for evidence which ends June 8.
Further details on the eligibility criteria and the application process are available here.
Background: The “Windrush generation” were invited to Britain between 1948 and 1971 to fill labor shortages following World War II and were named after the first boat arriving from the Caribbean. At the time, these migrants were welcomed as Commonwealth (and, therefore, British) citizens and many children traveled undocumented on their parents’ passports. While these migrants went on to play an essential role in the rebuilding of post-war Britain and form the bedrock of BME (Black and Minority Ethnicity) British society, no documentation was issued proving their legal status, and landing records that document their arrival were destroyed by the Home Office in the 2010s. Fast forward 50 years and this lack of documentation has rendered it impossible for many migrants to fulfill right-to-work and right-to-rent checks by employers and landlords or to prove that they are entitled to health services, despite many being British citizens or entitled to naturalize. Immigration rules introduced in 2012 to make the U.K. a “hostile environment” for illegal migrants, where lack of documentation means lack of access to work, housing and services, have proved directly discriminatory to the Windrush descendants.
BAL Analysis: The Windrush scandal has captured the public’s attention and highlighted many unfair aspects of the Immigration Act that were previously below the radar, and may encourage the Home Office to temper the “hostile environment” toward migrants at the policy level more generally (and certainly if proposed compensation must be paid out to those denied work, housing or benefits). While the Windrush scandal does not directly affect business immigration into the U.K., all U.K. employers should be aware of the program when conducting mandatory right-to-work checks. Employers must be aware that there are legitimate grounds on which some British citizens or permanent residents many not hold passports, and be prepared to make further referrals to the Home Office Employer Checking service and seek advice on this scheme if necessary.
What is the change? For the sixth consecutive month, the allocated quota for Tier 2 Restricted Certificates of Sponsorship (RCoS) has been exhausted for May.
What does the change mean? Requests for Tier 2 (General) Certificates of Sponsorship with points below the minimum 51 and a salary of less than £55,000 per year are being rejected for the month of May, and employers will need to resubmit them in June.
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.
BAL Analysis: As expected, the pressure on Tier 2 quotas continues and appears to be a long-term trend. The quotas have been exceeded every month since December 2017, and with the excess applications being rolled over to the next month, the pressure is unlikely to be eased anytime soon. BAL anticipates that quotas will be filled every month going forward, and certainly until September given the annual peak during the summer period. 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 anticipate that all applicants on lower salaries will be delayed and potentially disqualified. 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 made for all roles prior to advertising.
What is the change? Prime Minister Theresa May has appointed Sajid Javid as Home Secretary following the resignation of Amber Rudd Sunday amidst a scandal revealing that the Home Office set quotas for removing undocumented immigrants.
What does the change mean? Javid, an MP for Bromsgrove, who previously served as business and culture secretaries, has criticized the deportation targets as well as the recent scandal involving the Windrush generation. His initial priority is to put the scandals to rest. Javid was opposed to Brexit and his appointment maintains the balance of Remainers and Brexiters within May’s Brexit Department.
Background: Rudd resigned Sunday after her former deputy said that they had discussed increasing deportations by 10 percent. The comments contradicted Rudd’s statements to parliament that she was not aware of the Home Office setting any numerical targets for deportations.
Javid said his first priority was “to keep the British people safe” and his most urgent task was to make sure the Windrush generation was treated “with the decency and fairness they deserve.” The Windrush generation refers to people from Commonwealth Caribbean countries who were invited to fill labor shortages and legally settle in post-WWII Britain, but were not given documentation. The government has come under fire for declaring them illegal immigrants, which has resulted in some being threatened with deportation, losing their jobs and being denied health care.
BAL Analysis: Javid’s immediate priority is to resolve the scandal and reassure the public that the Home Office is not promoting a “hostile environment” toward immigrants. In the longer term, Javid will oversee the new immigration policy post-Brexit. As a former Business Secretary, he is in favor of a skills-based immigration system, which is welcomed by the business community.
What is the change? The U.K. Department for Work and Pensions has announced that the ‘Universal Jobmatch’ recruitment site will soon be replaced by a new ‘Find a Job’ site.
What does the change mean? The Find a Job site will be launched on May 14 and the Jobmatch site will come offline June 17. Employers should be sure that they download and save any records that are currently saved on the Jobmatch site before the cutoff date.
BAL Analysis: Employers are advised to save all material currently retained on the Universal Jobmatch site, including material related to job advertisements. These records form compliance evidence of having completed the Resident Labour Market Test, and archived advertisements will not be available beyond June 17. Retaining the documents is part of a sponsor’s record keeping obligations and their failure to accurately record and retain them can negatively affect the sponsor license.