United Kingdom Archives

The following is a roundup of recent developments concerning Brexit negotiations and the United Kingdom’s withdrawal from the European Union.

News Summary

The status of the estimated 3.2 million EEA nationals and their family members already living and working in the U.K. continues to be the hot-button issue that may delay passage of the Brexit Bill and the start of official Brexit negotiations this month.

Prime Minister Theresa May has staunchly maintained that any rights of Europeans in the U.K. must be negotiated against the rights of U.K. nationals in mainland Europe, and there have been strong indications that a “cutoff” date will be introduced in line with Article 50 to prevent new arrivals benefiting from automatic permanent residence after five years. However, the House of Lords last week voted to amend the Brexit Bill to include a guarantee of residence for Europeans who are legally in the U.K.

Further, Monday’s report by a cross-party Parliamentary Committee on Exiting the EU has highlighted the government’s responsibility to end uncertainty and unilaterally guarantee the rights of EEA nationals and their family members currently in the U.K. The report urges the government to announce its timetable and intentions on post-Brexit immigration policy “as soon as possible” to ensure new European arrivals are clear on their long-term status. Meanwhile, permanent residence applicants are facing six-month delays and considerable documentary hurdles, albeit the introduction of online systems is bringing hope for processing improvements in the long term.

Politics and Immigration

Guaranteeing rights of Europeans currently in the U.K.

The government’s Brexit Bill, while approved in the House of Commons, suffered its second defeat in the House of Lords on March 7―the final vote was 336 to 268.

Last week, the bill was defeated over the issue of whether EU nationals must be guaranteed their right to remain and obtain permanent residency after the U.K. leaves the EU. The Lords voted 358-256 for an amendment to formally guarantee the rights of the approximately 3.2 million Europeans living within its borders at the outset of Brexit negotiations, rather than forcing them to continue living in uncertainty. The House of Commons previously rejected a similar amendment and could overturn the new amendment.

While the Lords have no constitutional power to prevent the bill from ultimately passing, if it continues to ping pong between the two houses over the terms of any amendment, it will set back the date on which Theresa May is able to trigger Article 50 and the start of official negotiations. The government has postponed its original March 15 target to March 31, 2017. Monday’s report by the House of Commons cross-party select committee has put mounting pressure on MPs to accept the House of Lords amendment to unilaterally guarantee Europeans’ rights.

Home Office processing: Improvements or unfair treatment?

Brexit has created a huge upsurge in demand for non-mandatory residence permits and confirmation of permanent residence which the Home Office has struggled to process. European law requires that applications be processed within six months, a service standard which the Home Office has historically met. Since the Brexit referendum, an initiative now allows Europeans and their dependent family members to use both premium and online application processes. The online process is not available to non-EEA national dependents who are applying separately from the EEA national, or anyone who qualifies on the basis of time spent as a student or as a self-sufficient person. However, it does provide workers with five years of P60s, a streamlined process to obtain recognition of their status. From a practical perspective, the European passport passback service is a useful addition for EEA nationals who do not have a European ID card, and who need to retain their original passport for travel.

Following complaints that the Home Office has erected a “bureaucratic wall” for Europeans applying for confirmation of their right to reside in the U.K., the European Parliament intends to launch a task force to investigate potential “unfair treatment” of Europeans. The task force would likely look into the cumbersome application forms and evidentiary rules which were not made clear at the time migrants moved to the U.K. and now impose strict definitions of “legal” residence. The fact that the Home Office is currently rejecting 30 percent of permanent residence applications demonstrates that European applicants should not presume their eligibility. These applications continue to require focused legal attention and there is sound rationale for seeking to protect their rights prior to the invocation of Article 50.

Status of U.K. nationals in Europe

European leaders have consistently asserted that no negotiations regarding the status of the estimated 1.8 million British citizens currently living and working in Europe can take place prior to the triggering of Article 50. May has steadfastly reiterated her reluctance to issue guarantees for Europeans in the U.K. to allow her to maintain an effective negotiation position. However, given that immigration policy is frequently based on reciprocity, this position appears increasingly counterproductive. A House of Commons report released Monday states that U.K. citizens living in the EU are most concerned about the loss of their right to remain and right to work in the EU, as well as the continued recognition of their qualifications for purposes of work authorization post-Brexit.

Health insurance technicalities

There have been reports in the media that the Home Office has issued warnings to EEA nationals who do not have comprehensive sickness insurance that they may not be able to remain in the U.K. after Brexit. The Guardian reported that a student, in response to a query to the Home Office, “was told that if ‘a student attempting to exercise treaty rights [to live in the UK] does not hold either CSI or EHIC [a European Health Insurance Card for tourist health cover] they will be liable for removal from the UK.’” In an apparent departure from these alarming but isolated cases, the Guardian reported that the Home Office has insisted that EEA nationals will not be deported if they do not have private healthcare.

The Home Office has affirmed their position that anyone who does not have private healthcare (comprehensive sickness insurance), but would need to have this as a student or self-sufficient person to establish a right to reside in the U.K., will not be removed if their permanent residence application fails. However, the legal position is worrying since those without a right to reside in the U.K. could be removed under Directive 2004/38/EC. It is unlikely that the Home Office will embark on a program to remove EEA nationals who do not have the “right of residence,” but there would be implications in terms of not being able to qualify for British citizenship since evidencing and documenting permanent residence is a pre-requisite to citizenship.

Cutoff of residency rights for new European arrivals to the U.K.?

Once May is in a position to invoke Article 50, it is anticipated that she will declare either an immediate or short-term cutoff date for new European arrivals entering the U.K. May cannot legally prevent new arrivals from entering and living in the U.K. until Brexit occurs in 2019; these migrants will continue to be able to use passports for travel and prove a right to work. However, the impact of any cutoff would be to make clear that new arrivals should not expect to qualify for permanent residency based on five years of residence in the U.K. With the U.K. anticipated to formally leave the EU by 2019, those individuals would be subject to any post-Brexit immigration regime, for example allowing a more restricted qualification basis for permanent residence or demanding work permission under Tier 2 on the same terms as third-country nationals.

Post-Brexit immigration rules: All options still on the table

The Home Office has confirmed that it is leaving its options open in formulating how European migrants will be treated under a post-Brexit immigration system. The agency may adopt a system that would give Europeans preference over other foreigners under a dual system, or it could propose a single scheme that would subject all non-U.K. nationals to the same work-permit regime.

Monday’s parliamentary report recognized that a sudden reduction in Europeans in the U.K. would disrupt business across a number of sectors in both lower and higher skilled operations; it recommended that the government maintain preferential treatment for Europeans after Brexit. This year, several further inquiries will seek recommendations on how to shape the new system. In particular, parliamentary subcommittees are conducting inquiries into Brexit’s impact on various aspects of the economy, migration, the labor market and sector-specific industries. The Lords Select Committee on Economic Affairs is holding public hearings this month on how the reduction in net migration will affect wages, different sectors and migrants of high, medium and low skill levels. The EU Home Affairs subcommittee is investigating how Brexit will affect the rights of U.K. citizens to move and work within the EU post-Brexit. And an all-party Parliamentary group is studying Brexit’s impact on small- and medium-sized employers with a particular focus on certain sectors, including technology.

Preparing Your Company

Brexit negotiations will be underway as soon as the U.K. invokes Article 50, which is anticipated by March 31. Businesses should be preparing now for the impact of Brexit on their European and third-country national employees and assignees in the U.K.

The cutoff date for new European arrivals could come as early as this month and, while Europeans will still be able to use passports to live and work in the U.K. without visas, employers should be mindful that new European arrivals after any cutoff date are unlikely to be eligible for permanent residency based on their five years of residency. At the same time, although Europeans who are currently living and working in the U.K. are expected to continue to be able to rely on their five years of lawful residency, the Home Office’s interpretation of what counts as “lawful” and “continuous” residency has become extremely restrictive. Each individual should be carefully assessed against risk of losing eligibility and advised on options post-Brexit.

BAL can assist with a number of services including:

Tracking current European employees for dates of eligibility for permanent residency.
Planning ahead for new hires who will be subject to work permits under a post-Brexit immigration scheme.
Making individual assessments on EEA employee options, including EEA Registration Certificates, U.K. permanent residency, British citizenship or eligibility under the Tier 2 regime.
Identifying employees who may be at risk of ineligibility for permanent residency for various reasons, including those who have gaps in their lawful residency or who spent time as a student, self-employed or self-sufficient individual and lacked comprehensive sickness insurance; and advising on appropriate strategies for employees with risky profiles.

Employees

Employees can also take steps to prepare for Brexit, including making sure they are aware of their legal status in the U.K. and whether there is a basis on which they can claim to be a “qualified person” under EU law. Employees should make sure they possess:

Evidence of their date of arrival in the U.K. (e.g., travel records).
U.K. housing records (e.g., chain of tenancy or mortgage documents).
U.K. tax records (e.g., P60s for each year in the U.K.).
Contracts, payslips and bank statements to demonstrate periods during which they were working in the U.K.
Comprehensive sickness insurance, including either private insurance or evidence of registration in their home country, to cover any periods of time as a student or self-sufficient person.

Brexit Timeline

BAL urges companies and employees alike to take an informed and thoughtful approach to Brexit. While the government’s hardline approach is not encouraging, the status of EEA nationals in the U.K. has not changed and will not change for some time. Below is a timeline of key dates:

March 31, 2017: Theresa May’s published deadline for invoking Article 50.
September 30, 2018: EU’s chief Brexit negotiator Michel Barnier’s deadline for finalizing terms of the U.K.’s exit from the EU.
March 15-31, 2019: Two-year deadline for concluding Brexit negotiations under European law protocols.
April 2019 (TBD): The U.K.’s exit from the EU, following ratification of Brexit by all other member states.

Should you have any questions or require more information on how BAL can help with Brexit planning, please contact us at uk@bal.com.

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 – MEDIUM

What is the change? A report by a cross-party parliamentary Committee on Exiting the EU said that the government should unilaterally guarantee the right to permanent residence for the approximately 3.2 million EU nationals already in the U.K., as well as setting a cutoff date as soon as possible for new EU arrivals so it will be clear who will be eligible to accrue a right to permanent residence after five years. The committee also urged the government to publish its timetable for the next Immigration Bill as soon as possible.

What does the change mean? The report was unanimous and adds further political weight to the growing chorus of support for EU citizens to be guaranteed their rights to reside before official Brexit negotiations begin.

Background: The report was the result of an inquiry into the government’s negotiating objectives regarding EU citizens in the U.K. and U.K. citizens in the EU ahead of Article 50 being triggered (currently set for March 31. Among the report’s key findings:

EU nationals in the U.K. and U.K. nationals in the EU do not want to be used as bargaining chips in the negotiations, and leaving them to live under a cloud of uncertainty is unacceptable. The U.K. should now make a unilateral decision to safeguard the rights of EU nationals in the U.K.
The government should as soon as possible announce a cutoff date for EU nationals coming to the U.K., after which they will no longer be able to accrue rights to residency.
The Home Office is not processing residency applications by EU nationals fast enough (six months is standard) and is currently rejecting approximately one-third of applications.
The current permanent residency process for EU nationals is overly burdensome and should be streamlined.
A sudden reduction in EU workers in the U.K. would disrupt business in a number of sectors, and the government should indicate its willingness in negotiations to consider preferential treatment for EU nationals.
A post-Brexit immigration system may range from retaining some free movement for EU nationals to applying the same scheme to EU and non-EU nationals. Introducing restrictions on EU/EEA nationals will add complexity, and a balance must be struck as to who bears the administrative burden – the employer, the applicant or the Home Office.
Proposals for geographic work visas in London and the devolved jurisdictions should be considered, and the government should respond as fully and early as possible.
The government should seek to ensure that U.K. citizens currently in the EU will have continuing access to healthcare and reciprocal pension benefits post-Brexit.

BAL Analysis: The committee urges immediate action on the status of EU nationals in the U.K. and seeks transparency as to the government’s intentions on future migration policy, a recommendation that, if adopted, would be enormously helpful. Residency applications are currently being rejected for reasons such as failure to hold comprehensive sickness insurance during periods of study or “self sufficiency” between jobs – requirements that European applicants were not made aware of previously – and therefore any drive to secure their rights based on the fact of residence rather than hard line legal interpretations or documentary rules is welcome. Nevertheless, the government has withstood previous requests for guarantees and with just weeks before negotiations begin, this latest report offers no certainty that guarantees will be given.

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

Copyright © 2017 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 – MEDIUM

What is the change? In the House of Lords, peers voted across party lines to pass an amendment to the Brexit bill guaranteeing the rights of EU nationals currently in the U.K.

What does the change mean? The amendment was not in the government’s version of the bill, and would require the government to ensure the rights of EU citizens and their family members currently in the U.K. and their rights to residency post-Brexit. The House of Commons previously rejected a similar amendment.

Implementation time frame: Ongoing.
Visas/permits affected: Rights under EU freedom of movement laws.
Who is affected: EU and EEA nationals and their family members legally residing in the U.K.
Business impact: The amendment would provide much-needed certainty to European nationals currently living and working in the U.K.
Next steps: The Brexit bill will now pass back to the House of Commons for further debate of the amendment.

Background: The amendment says that within three months of triggering Article 50 exit procedures, the government must introduce proposals to ensure that EU and EEA citizens and their family members who are legally resident in the U.K. as of the date of the bill’s enactment “continue to be treated the same way with regards to their EU-derived rights, and, in the case of residency, their potential to acquire such rights in the future.”

BAL Analysis: While the House of Lords cannot ultimately stop the government’s Brexit bill or insist on the amendment, it can delay the triggering of Article 50 (expected mid- to late March) as the bill enters “ping pong” mode between the two parliamentary houses. The amendment recognizes the U.K.’s responsibility to protect the estimated 3 million Europeans currently in the U.K. and provides a legal framework in which to guarantee that rights are established as early as possible ahead of any Brexit cutoff date. To date, the government has given broad reassurances that they have no intention of treating EEA nationals already in the UK “with anything other than respect,” but has stopped short of offering any guarantee unless and until U.K. citizens currently in other EU countries are assured reciprocal rights. BAL is following developments and will provide updates as the Brexit bill proceeds through Parliament.

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

IMPACT – HIGH

What is the change? Prime Minister Theresa May is reportedly preparing to formally announce limitations on the rights of new EU arrivals in tandem with her announcement triggering Article 50 exit procedures next month. As of that date – anticipated to be March 15 – new EU/EEA arrivals to the U.K. should not have an expectation of permanent residence after five years.

What does the change mean? While EU/EEA nationals arriving after any cutoff date may continue to exercise free movement and work in the U.K. without specific work permission in the short term, they are on notice that they may not qualify for permanent residency post-Brexit and will likely need additional work permission or registration after the U.K. formally leaves the EU in 2019.

Implementation time frame: Ongoing. May is currently slated to trigger Article 50 on March 15, which would serve as the same date as the “cutoff” date after which new EEA nationals would have a limited expectation of permanent residency.
Visas/permits affected: EU freedom of movement; U.K. permanent residency.
Who is affected: EU/EEA nationals arriving in the U.K. after the cutoff date.
Business impact: Businesses sending EEA workers to the U.K. after the cutoff date should anticipate applying for work permits for those individuals.
Next steps: Companies should assess their existing EEA workforce in the U.K. for permanent residency eligibility and, in appropriate cases, take steps toward applying for registration certificates. BAL can assist in these processes.

Background: May is apparently setting an immediate cutoff date simultaneous to the triggering of Article 50 in order to avoid an influx of migrants from the EU. The reports come after Home Secretary Amber Rudd confirmed in a televised interview that the U.K. “will be ending freedom of movement as we know it,” thus, any new EEA migrant prior to Brexit must expect to transition to a work permit. The Home Office has confirmed that all options are on the table for a post-Brexit national immigration scheme, which will either apply a single system to all foreign nationals or a dual system that treats EEA nationals as preferential to non-European migrants.

It is expected that EEA nationals already living in the U.K. as of any cutoff should continue to be able to work and be granted permanent residency based on meeting the five-year residency as a “qualified person” requirement. However, Rudd also reiterated that while May wants to guarantee the status of EEA nationals already in the U.K. “as soon as possible,” she will not do so until U.K. nationals receive reciprocal guarantees of their status in EU countries.

BAL Analysis: The imposition of a cutoff date is legally challengeable (as it effectively thwarts EU law which remains in force until after Brexit) but May is likely relying on the EU being unwilling or unable to enforce this politically. Companies should be tracking their European workforce to plan for Brexit and its impact on EEA nationals’ continued rights to live and work in the U.K. While European nationals currently working in the U.K. should be able to maintain the right to stay in the U.K., individuals with breaks in their continuous stay in the U.K. or who spent periods of time as students, self-employed or self-sufficient and without comprehensive sickness insurance remain at risk of being ineligible for permanent residency.

BAL is hosting a webinar March 23 on “Making Sense of Brexit and Tier 2 Skilled Worker Reforms for U.K. Employers.” Registration and details are available here.

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

IMPACT – MEDIUM

What is the change? The United Kingdom is expanding its 24-hour Super Priority visa service to applicants in key business locations in the United States.

What does the change mean? Visa applicants traveling on urgent and short notice may now apply at premium application centers in any of seven U.S. cities—Boston, Chicago, Houston, Miami, New York, San Francisco or Washington, D.C.—and obtain a visa determination within 24 hours.

Implementation time frame: Immediate.
Visas/permits: Points Based System visas, including Tier 2 skilled workers and Tier 4 students, and visitor visas. The service is not available for settlement visas, e.g., British citizen spousal visas.
Who is affected: Assignees and other Tier 2 skilled workers, business travelers requiring a visitor visa.
Impact on processing times: Super Priority visa applications are processed within 24 hours.
Business impact: The Super Priority visa program can be a good option for urgent applications, particularly where the migrant is already based in or traveling to the relevant city. The service adds an extra £750 to the standard visa fee, so convenience must be weighed against cost.

Background: U.K. visas may be submitted under three different services, at different price points, depending on how quickly the visa is needed and how much time the applicant can afford to be without his or her passport. Standard processing in the U.S. tends to take 10 to 15 business days plus shipping time. Priority processing, available for an additional fee, takes five business days plus shipping time. The Super Priority service takes just 24 hours but costs an additional £750 on top of standard visa fees.

The Super Priority visa service is now available in seven cities in the U.S. as well as a number of other locations around the world, including locations in China, Colombia, India, Kazakhstan, Nigeria, the Philippines, Saudi Arabia, South Africa, Thailand, Turkey and the United Arab Emirates. U.K. officials said recently that in the coming year UK Visas and Immigration would handle more of its casework digitally from Sheffield in the U.K. This change could allow for more premium application centers to open around the world in key business locations.

BAL Analysis: The expansion of Super Priority visa services in the U.S. is welcome news for employers and assignees looking for business flexibility or in urgent need of a U.K. visa. The planned transformation of UKVI services in 2017 suggests that employers can anticipate greater access to premium application centers in business centers globally. Whether the Super Priority service is the best option will depend on several factors, in particular whether the migrant is already based in, or planning on traveling to, a Super Premium service center location, and whether the cost is justified by the business need for travel. BAL frequently recommends priority processing, but the expansion of the Super Priority service is a welcome development.

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

IMPACT – MEDIUM

What is the change? The U.K. Supreme Court has upheld the immigration rule that imposes a minimum-income requirement for British citizens and permanent residents looking to sponsor their non-EEA dependents in the UK.

What does the change mean? The ruling does not affect visas for dependents of Tier 2 workers or other points-based system migrants, or any European nationals and their family members. While the minimum-income requirements will stay in place for British citizens and permanent residents, the Court has demanded greater evidential flexibility for the family to show alternative sources of funding, and a rewrite of the extremely prescriptive “specified evidence” guidance is now expected.

Implementation time frame: Immediate and ongoing.
Visas/permits affected: “Spousal visas” and other Appendix FM applications.
Who is affected: Non-EEA spouses, civil partners, unmarried partners with two years cohabitation, children and other dependents of British citizens or permanent resident in the U.K.

Background: The minimum-income threshold for spousal visas has been a requirement since 2012. The British citizen or permanent resident must demonstrate minimum income of £18,600 in order to sponsor their non-EEA spouse or partner to come to or remain in the U.K. The threshold increases to £22,400 if the family has a non-EEA child, and by £2,400 per child thereafter. Notably, the income of the non-EEA spouse or partner cannot be taken into consideration, which severely disadvantages families in which the British citizen or permanent resident does not work or is not the main breadwinner.

A group of families who were unable to meet the income requirement and therefore living in separate countries challenged the rule in the Supreme Court, arguing that it impeded their rights to family life. Evidence was given to show the current level of the minimum-income requirement prevents 41 percent of the U.K. working population from being a sponsor, and 55 percent of working women. The court upheld the principle of imposing a minimum-income requirement as a legitimate means to reduce net migration and ensure that family dependents are not a drain on public resources. However, the Court also recognized that the rule was especially harsh for families who have been separated from children because they are unable to meet the income threshold and asked guidance to be reconsidered on which assets can be relied upon to demonstrate family resources and how the rights of children can be better considered in overall decision making.

BAL Analysis: The ruling does not affect Tier 2 and other points-based system skilled workers and their dependents or the current European free movement regime for EEA nationals and their family members. Although the case does not directly address the impact on European nationals, the fact that the court has upheld the use of minimum-income requirements as a legitimate means to limit net migration to the U.K. overall suggests that such limits may apply in the future to EEA national spouses post-Brexit, albeit with much greater evidentiary flexibility.

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

IMPACT – HIGH

What is the change? A draft regulation has been issued that details how the government will implement the new Immigration Skills Charge paid by companies hiring skilled foreign workers.

What does the change mean? Companies will be charged £1,000 per certificate of sponsorship per year of sponsorship per migrant (smaller companies with up to 50 employees and charitable organizations will be charged £364). The regulation sets out the full schedule for the Immigration Skills Charge and exemptions for certain skilled workers and certain occupational codes.

Implementation time frame: April 6.
Visas/permits affected: Tier 2 (General) and (ICT), excluding the Tier 2 ICT Graduate Trainee sub-category.
Who is affected: All companies employing Tier 2 migrants in the U.K.
Business impact: The Immigration Skills Charge will generate funds for projects aimed at upskilling and training U.K. resident workers, but is not limited to specific sectors or roles and will significantly increase costs for all employers who rely on Tier 2 migrant workers.

Background: The Immigration Skills Charge, first announced in March 2016, requires Tier 2 employers to pay additional monies to support a general government fund for skills training initiatives for British workers. Companies will be required to pay the charge each time they assign a Tier 2 certificate of sponsorship to a skilled worker via the Sponsor Management System.

The rate is £1,000 per year per worker for any company with more than 50 employees, payable up front at the certificate of sponsorship stage based on the length of employment entered on the CoS. There is a minimum of 12 months employment required, and calculated in six-month increments thereafter. For example, a six-month CoS would attract no charge, a 2 ½-year CoS will attract a £2,500 charge and a five-year CoS will attract a £5,000 charge. This charge is in addition to the CoS fee, visa application fee and immigration health surcharge linked to any Tier 2 migrants. It is also separate from the “apprenticeship fund” to be launched by the Department for Enterprise in April. Exemptions from the charge include:

CoS assigned before April 6, even where a visa application is still pending.
Those already in the U.K. extending a Tier 2 visa or changing jobs or employers.
Occupations skilled to Ph.D. level (specified in SOC codes).
Tier 2 (ICT) Graduate Trainees (of which there are maximum 20 per year).
Those switching from Tier 4 student visa to Tier 2 (General) in-country.
Croatian nationals.
EEA nationals at present (although this may change under the post-Brexit immigration regime).

There are no exemptions for employers who already invest in training schemes and resident worker employment initiatives, as the monies will be spent directly by the government, i.e., employers cannot apply to access these funds for their own sectors or initiatives.

Refunds of the skills charge will be given in the following instances where the Tier 2 worker never actually starts work:

The visa application is refused.
The visa application/employment offer is withdrawn.

The Home Office policy team has indicated they will consider allowing refunds in other circumstances – e.g., under current rules, if a five-year employee leaves employment there is no way to recover the charge—but these are not confirmed.

BAL Analysis: Employers should budget for the Immigration Skills Charge, which will take effect April 6 and must be paid up front for the full duration of each certificate of sponsorship.

BAL will be discussing the Immigraiton Skills Charge, along with other key Tier 2 changes and other immigration changes, in more detail at our webinar on March 23. Registration is available here.

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

IMPACT – MEDIUM

What is the change? A House of Lords select committee is seeking submissions on the impact that reduced migration from Europe post-Brexit would have on the U.K. labor market.

What does the change mean? Written submissions must be completed by Monday. The inquiry is aimed at examining how limiting migration from Europe would affect business and the U.K. economy—would it boost job opportunities for resident workers or will it deprive companies of access to a migrant labor force that is crucial to their success?

Implementation time frame: Between now and Feb. 20.
Who is affected: Any interested company. Individuals or organizations may provide submissions.
Business impact: The inquiry aims to understand how reduced migration, from both inside and outside the EU, would affect businesses, workers and the overall U.K. economy in broad terms.
Next steps: Written responses may be submitted after completing the required form available on the House of Lords website.

Background: The Economic Affairs Committee of the House of Lords is conducting its inquiry as the U.K. prepares to invoke Article 50 of the Lisbon Treaty to formally begin the process of leaving the European Union in March. Committee recommendations are expected to be made in early May and are likely to inform government policy on any immigration system post-Brexit. (BAL understands that all ideas are currently “on the table.”)

Besides seeking information on the overarching question of what the impact of Brexit on the labor market will be, the committee is inviting public feedback on (1) what level of migration is required for the U.K. labor market to function effectively; (2) the impact on wages in different economic sectors of restricting migration from the EU and further restricting migration from outside of the EU; (3) whether the government has adequate data on the immigrant worker population to make sound policy decisions; (4) whether the U.K. should consider regional variations to its immigration policies; (5) whether policies to control the level of migration from non-EU countries have been successful; and (6) what the U.K. can learn about immigration policy from other countries.

The committee has said that the inquiry is not focused on the status of EU nationals already living in the U.K.

BAL Analysis: Respondents do not have to answer every question and are asked to keep submissions short. Therefore the inquiry provides a good opportunity for companies to provide feedback on how a reduction in migration/restriction in employment rights for European nationals would affect the ability to access necessary skills from the market or to operate effectively as a U.K. employer. As EU migration routes are used to fill higher skilled positions in tech, financial services, pharma and other sectors, as well as low-skilled roles that arguably garner more political attention, multinational employers should make clear the impact of any reduction in overall access to visas.

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

IMPACT – MEDIUM

What is the change? The Home Office has released a new guidance for sponsors highlighting several important changes to Tier 2 rules beginning April 6.

What does the change mean? Changes to the immigration rules are expected to be announced in March and to take effect April 6, including the new immigration skills charge of £1,000 per certificate of sponsorship.

Implementation time frame: April 6.
Visas/permits affected: Tier 2 (General) and Tier 2 (ICT) categories.
Who is affected: All U.K. employers.
Business impact: The immigration skills charge will significantly increase costs for U.K. companies using Tier 2 routes.

The sponsor guidance now contains an addendum making clear that the immigration skills charge will come into effect April 6 as anticipated:

Immigration Skills Charge. An immigration skills levy must be paid by companies sponsoring Tier 2 (General) and (ICT) workers who are applying outside the U.K., or who are applying from inside the U.K. either to extend their existing visa or to switch from another category. Exceptions include: workers sponsored before April 6 who are applying from inside the U.K. to extend their stay with the same or a different sponsor, Tier 2 (ICT Graduate Trainee), Tier 4 student visa holders switching to a Tier 2 (General) visa, and specified Ph.D. level occupations. The immigration skills charge will be £1,000 per year per migrant for medium and large sponsors (£364 per year per migrant for small sponsors and charitable organizations), and must be paid up-front for the entire duration covered by the certificate of sponsorship at the time the certificate of sponsorship is issued. The levy does not apply to family dependents. The skills charge is in addition to the new apprenticeship levy that will apply to all U.K. employers with an annual salary bill of more than £3 million (and calculated as 0.5 percent of the salary bill in excess of £3 million payable via HM Revenue & Customs). The money from both schemes will be spent by the Department for Education through its Institute for Apprenticeships and other training initiatives.

The sponsor guidance also now announces some other minor changes to the rules for Tier 2 migrants:

Start dates. The guidance now make clear that Tier 2 (General) workers who are issued a visa must start work on the date given on the certificate of sponsorship and cannot delay their start date by more than four weeks. Under the ICT subcategory, the start date may surpass four weeks from the visa issuance date as long as the migrant continues to be paid by the overseas entity.
Resident labor market test for shortage occupations. Employers may only assign a certificate of sponsorship for a job on the shortage occupation list if the migrant will work for a minimum of 30 hours per week.
Timing of milkround recruitment. When a migrant is recruited via a milkround, the employer must assign the certificate of sponsorship within 48 months of the milkround. For certificates of sponsorship assigned April 6 and later, the migrant must have been offered the job within six months of the end of the milkround campaign.
Criminal record certificates. Starting in April, Tier 2 visa applicants must provide criminal record certificates if coming to the U.K. to work in education, health or social care.

BAL Analysis: Employers should budget for the additional Immigration Skills Charge for all transfers and new hires now in the pipeline, as well as prepare for the other changes taking effect in April, which were highlighted last March when they were first announced. BAL will provide further news alerts as soon as the Statement of Changes to the Immigration Rules is available in mid-March and will be discussing the business impact of these changes in our upcoming client webinar.

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

IMPACT –MEDIUM

What is the change? Non-EEA family members may now file residency applications online and take advantage of the passport passback service.

What does the change mean? The online process is more convenient, and the passport passback service allows EEA nationals and their family members to retain the ability to use their passport and ID card while the residence card is awaiting processing in the U.K.

Implementation time frame: Immediate.
Visas/permits affected: Applicants for EEA residence certificates/cards or permanent residence certificates.
Who is affected: EEA nationals and their family members living in the U.K. The online service is unavailable to family members applying separately from the sponsoring EEA national.
Business impact: The online option eases the process for EEA nationals and their families to document their status amid continued uncertainty due to Brexit. The status of EEA nationals living and working in the U.K. remains in limbo and the U.K. government has indicated that it will not guarantee their rights until reciprocal guarantees are offered to U.K. nationals living in the EU.

Background: The paper form and application process have been replaced by an online application process for a residence or permanent residence application for Europeans living in the U.K. seeking to document their status, with the following important process improvements:

Family members, including non-EEA nationals, can now be included in the online process for applying for residence and permanent residence documents (not just for the principal European applicant).
A full list of all absences from the U.K. does not now have to be included in the online application process. (It is enough to state that there has been no absence for more than 180 total days in any one year).
Periods of employment and continuous residence may be proven by P60 annual tax statements alone, reducing the need to submit volumes of additional paperwork to prove residence over the same period.
The European passport passback service has also been extended. The service was previously only available for principal EEA national applicants but has now been extended to non-EEA family applications. The passback service ensures that passports and ID cards do not sit unnecessarily with the Home Office European team while applications await processing. Under the service, original documents are taken to the nearest registry office, copied officially and then given back to the bearer.

BAL Analysis: These process improvements are a step in the right direction, although they do not improve overall processing times, which remain at six months. The passport passback service allows for greater ease of travel when applying for permanent residence based on five years of continuous residence and gives a greater incentive for companies to document their employees’ right to work under European law prior to Brexit in 2019.

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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