Employing Foreign Workers in the UK
This blog has been updated following changes reported in late February 2020. These reports suggest that the new system will be substantially like the existing system (and hence this blog is substantially correct - or at least correct until we know more). There is one key difference - the annual immigration cap at 20,700 will be abolished. This means that there will be more certainty that a skilled worker can join a sponsoring firm.
Broadly we believe that the new system will be good for employers in trying to hire high-skill workers from abroad.
Currently British citizens, citizens of the European Economic Area (EEA) and Swiss nationals can work in the UK without needing a work permit. But nothing's ever that simple and tehre will be changes at teh end of 2020 as the transition period ends. The situation for at least three EEA countries is different and for those nationals, special permission is required.
Even though those in the groups mentioned above don’t need work permits, it’s your responsibility to check that the person you are about to employ is eligible to work in the UK. You can’t assume they are able to work in the UK. And ignorance is no defence. And after we leave the EU the situation becomes even more complex.
This article will now go on to discuss employing foreign workers in the UK. If you are seeking information on how to employ foreign workers abroad (rather than in the UK), follow this link to our associated paper.
Why employ overseas nationals?
The UK is suffering a massive skills and labour shortage.
Firstly, there’s an urgent need to need to fill roles demanding, for example, technical skills or languages that are not available in the current UK talent pool. Considering the National Health Service, National Audit Office data shows that in 2016 there were just under 28,000 too few nurses, midwives and health visitors. There were also 5,000 too few doctors. Overseas workers provide the technical skills needed for these roles. In the past many nurses have been employed from the Philippines, the Caribbean and Africa, whilst trained doctors from countries in South Asia have been employed to overcome the shortage.
Whilst we hear a lot about the NHS, any manager in a technology-centric business will tell a similar story – we simply have too few engineers and scientists and other such specialisms.
Secondly, we need to employ overseas workers to do work that UK nationals simply won’t do. These tend to be temporary, low-skilled jobs – fruit picking and cockle picking come to mind. Temporary workers are attracted to the UK to take up these roles, many of which are seasonal.
So, overseas nationals are needed to fill roles that UK nationals can’t fill, either due to lack of training and relevant qualifications, or because they consider the roles too menial.
The Government's plans, announced in late February 2020, support immigration for the first reason. They are absolutely against allowing immigration for the second reason. Low skill immigration is to stop.
Workers from EU countries (after Brexit)
Currently, as discussed above, most EU workers are free to move about and work within the EEA. Exactly what will happen is unknown but the current plans from the Government is that this will cease.
In the event of a no-deal Brexit, EU citizens resident and working in the UK before 11pm on 31st October 2019 will be able to apply to the EU Settlement Scheme. They will have until December 2020 to apply. In the meantime, they will be able to work on the same basis as they currently do, provided that their documents (e.g. passport) show their right to work in the UK. EU citizens coming to live and work in the UK after 31 October 2019 will also be able to work (subject to eligibility checks as they are now). This will remain the case until new legislation is put in place.
Workers from outside the EU
As discussed above most EEA workers are able to freely move through Europe and find work. The picture is somewhat different for potential workers from outside the EEA. Workers from outside the EEA must apply for a visa that allows them to work in the UK.
If the Government presses on with its intention to curb low skill immigration, as it announced in late February 2020, the following will also apply after Brexit to all foreign workers.
Fundamentally, a foreign worker needs a visa to work here. There are five tiers in the government’s visa system, some with sub-categories.
These visas are for entrepreneurs, investors and exceptional people who have been recognised as leaders or emerging leaders. The Tier 1 (Exceptional Talent) visa requires the Home Office to endorse the person as a leader, or emerging leader, in their field. Two thousand visas are available per tax year.
There are four Tier 2 visa types. The intra-company transfer visa is designed for overseas employees coming to work in the UK arm of a multi-national organisation. Tier 2 also includes a Minister of Religion visa and a Sportsperson visa. The above three types are pretty self-explanatory.
It’s the Tier 2 (General) that is likely to be relevant to many firms. Workers can apply for this type of visa if they have been offered a skilled job in the UK. In March 2019 the Immigration rules changed and as a result the appropriate salary rates document for occupations eligible for sponsorship certificates was updated. Skilled workers who are "new entrants" should be paid at least £20,800, whereas "exprerienced workers" salary is at least £30,000 per annum. The salaries for different jobs are based on the Standard Occupational Classification (SOC) and they are listed on the government website.
Currently 20,700 Tier 2 visas are made available per year. As reported in February 2020, it's the Government's intention that this cap is abolished. This is great news for many firms wishing to hire skilled worklers abroad.
Tier 3 was designed for unskilled migrants to be able to work in unskilled or low skilled roles, for example seasonal agricultural work. Since in practice EU nationals have been filling these roles, the tier was never used and was discontinued in 2013.
Tier 4 is student visa for those offered a place on a course. Designed for those over 16, it is used for students attending UK colleges and universities. Again, there are certain criteria that the student must meet before being eligible. If the UK leaves the EU without a deal, the eligibility of EU students will change in December 2020.
Since 2012 students have had to leave the UK within four months of completing their degree. The Government is proposing to extend this timescale to two years after graduation. This is good news for firms who need to source graduate talent. The plan is that there will be no cap on the numbers, nor will there be restrictions on the types of jobs that the students can do. It will be interesting to see how this maps to the requirement for firms to hold a sponsorship visa before employing non-UK nationals.
Tier 5 is a temporary visa for specific scenarios: charity workers (undertaking voluntary work); creative and sporting; government authorised exchange; international agreement; and religious workers (non-pastoral only). People sponsored under this tier have a limited time during which they can work in the UK ranging from three months to two years, dependent on which Tier 5 visa they apply for.
So, based on the above information the most likely visa type for an organisation to consider is Tier 2 (General). You might think that the hard work is now done. Not so. Before a prospective employee can apply for a visa they must be sponsored by a firm (except in Tier 1). The process for doing this is discussed below.
Applying for a visa sponsorship licence
Firms wanting to employ someone coming from outside the EEA or Switzerland must be registered with the Home Office and have a sponsorship licence in place. It seems that the Government will retain this licence in the new arrangements.
The process for securing a sponsorship licence is onerous and requires a good deal of research to ensure that the correct data is provided in the application. If incorrect or incomplete data is provided the application if likely to be thrown out.
Having worked through the sponsorship process with clients, we know only too well the level of detail required to make the application.
It’s crucial to read, and re-read, the guidance notes provided. You’ll have questions about the information you are asked to provide. There is a helpline, and your call will be answered with reasonable speed. However, don’t expect to get real help. You’ll be told to refer to the guidance documents. And when you say “but they’re ambiguous” you’ll be told to "refer to the guidance documents"!
Before you make an application, you need to be sure that you meet the eligibility criteria. This includes having processes in place to monitor sponsored employees if you are granted a licence. This involves having robust HR management systems in place and operational. You also need to know what jobs(s) you require licences for. There is a standard occupational classification list (SOC) to which you’ll need to refer.
Next you need to assemble the relevant documents for submission. Make sure that all the documents conform with stated requirements. Get it wrong and your application will fail.
Having checked that the role you are recruiting to is on the list of occupations valid for sponsorship, you will need to prove that you have tried, and failed, to appoint someone already resident in the UK. There are strict criteria for this aspect of the application process. Simply sticking the vacancy on your website won’t be enough. You will need to demonstrate adequate recruitment effort with supporting evidence. It’s easy to fall foul of this resident labour market test. If you phone the helpline they’ll refer you to the guidance documents – and as noted, they’re ambiguous.
Having sorted the proof of failed recruitment, which may take a few months, you are ready to make the application. Read and re-read the guidance notes. Work out how to assemble the documents. Take copies of the documents. Pay the relevant fee and send off your application pack.
In our experience, getting the detail right, submitting the correct documents in the correct order and fully completing the application form will ensure that your application is able to succeed if you meet the assessment criteria. We may have been lucky so far, but we’ve managed to do it in as little as four weeks from application to licence grant!
From my comments on making a sponsorship application you might think it’s not worth becoming a sponsor. If you need skills from outside the EEA then you should consider applying. It’s not cheap, it’s not easy – but it is doable. It’s frustrating and the attention to detail is important.
The recruitment campaign must be carried out for at least 28 days, and the sponsorship application can take up to 8 weeks to be dealt with. This means the process is likely to take 3 to 4 months from the point you determine there is need for one or more sponsor licences and the point at which you know if you have been successful in your application.
Once you have the licence
You must manage the sponsorship process. It’s up to the prospective employee to apply for a visa, but you need to provide them with a Certificate of Sponsorship (CoS). It’s important for you to keep full records regarding your sponsorship certificates.
Once you have the sponsorship licence(s) you can make an offer to the prospective employee. They must then use the sponsorship certificate to apply for a visa. There is, however, no guarantee that they will be granted a visa. So what eligibility criteria will be used to assess applications?
Each visa application will be assessed against the UK Visas and Immigration department’s two points-based decision systems to decide who gets a visa and who doesn’t.
The first is a fixed threshold system.
Points are awarded for passing an English language test, for having adequate funds when the visa holder comes to the UK, for qualifications and for rare skills.
The threshold is 70 points and it’s really not difficult to score 70. Even a visa applicant with a Level 3 qualification (the lowest) where the visa sponsor has passed the Resident Labour Market Test can score 75 points and hence pass the first hurdle.
NB, we assume that the Resident Market Test will be retained. There have been no reports on this though.
In addition, they may need to show travel history for the past five years, and depending on where they come from, they may need to show that they are tuberculosis-free. If they are to work with children and other vulnerable groups, they may need to provide a criminal records certificate.
NB The following six paragraphs are subject to change. They descibe the situation when the quota is exceeded and the immigration system is oversubscribed. The Government intends scrapping the quota.
The second is a variable points system that varies as the demand for visas that month. All those who pass the fixed-point threshold are put into a second pot.
Under this re-classification, greater points are given to qualifications and shortage. Doctorates and graduates get 70 and 30 respectively. Level 3s get 20 points.
On top of this, points are added for salary. This starts at 10 points for £30k rising at one point per £1k to £45k. Points awarded then rise non-linearly to 60 points for over £100k. A PhD-qualified scientist who is to earn £100k, for example, gets 70 points for qualification and 60 points for salary giving 130 points. And if they are in a shortage occupation, they get another 130 points. By comparison, a Level 3 tradesperson not in a shortage occupation with a salary of £30k gets 50 points. This shows a significant spread of points.
This variable points system shows the UK Government’s policy in action. The aggregate scores for qualifications, salary and salary are ranked and the top applicants creamed off, selecting the number of visas available for that month. Unless the visa applicant is at the top of the qualifications and salary ranges, and in a shortage occupation they will not be guaranteed success.
It is worth noting that it has been possible to learn how significantly over-subscribed Tier 2 (General) applications are. Back in December 2017, the variable cutoff on the salary scale was £55,000 (35 points). This assumed maximum points in teh other two categories. In January and February 2018, the salary requirement dropped to £50,000 following a slightly reduced demand for visas, and in March 2018 it rose to £60,000 (40 points). Reports indicate that the quota was exceeded in April and May too and possibly for other months.]
There is no information available suggesting current over-subscription levels – and hence it’s near impossible to tell if a particular qualification-salary-scarcity score will be successful in any one month.
NB the Government reports that the annual quota of 20,700 will be abolished and hence the system will never be oversubscribed. In principle therefore, high skill immigration numbers will rise.
The current system is difficult to manage and there is no guarantee that you will be granted a sponsorship licence. If you do get a licence, there is no guarantee that the person you offer a job to will be able to get a visa. The numbers allowed in any allocation month are capped and once the ceiling is reached, no more visas will be granted.
The Government reports that the system from January 2021 will be more transparent and usable. There will, it reports, be a guarantee of a visa for those getting 70 points, because there will be no quota.
The following two paragraphs are likely history!
Can you play the system? Not really. You'd need to know how many visas the UKVI was going to issue and what the demand was going to be in the month you chose to encourage your would-be employee to apply. Since these are unknown, everyone plays a guessing game.
After Brexit we are likely to need reinstatement of the Tier 3 visa allowing unskilled migrants to come and work in the UK. The whole Tier structure may well get overhauled. If the system tends towards the Australian system, the people getting visas will be those that can contribute to the UK economy and society, and not just those that firms want to sponsor.
But our overall conclusions still apply...
If you want any help in applying for a sponsorship licence give us a call. If you decide to employ people in their country of origin have a look at our blog the subject. Then, give us a call.