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The new immigration system: getting ready and reviewing risk

  • United Kingdom
  • Brexit
  • Employment law
  • Global mobility and immigration

10-09-2020

As a result of the UK leaving the EU, free movement of people is ending on 31 December 2020. From this date, having a sponsor licence will become essential for organisations who recruit both from outside of the EU and from within it. For those businesses without a sponsor licence, forward planning is instrumental for aspects of life and business without free movement. In this e-brief, we will explore what businesses need to be thinking about to get ready for the changes. This is especially the case for those businesses who employee EEA nationals given that this will, in most cases, involve the employer being a sponsor under Tier 2.

This briefing looks at some of the key questions and actions which can be taken now.

Questions to consider

Do we need a sponsor licence?

You may do if your business recruits EEA nationals and wants to continue to do so.

We recommend acting now if your business does not already have a sponsor licence to ensure that you are able to recruit the talent required from January 2021. It is expected that there will be a surge in sponsor licence applications in the next few months, impacting on the application processing times. We can support with sponsor license applications and essentially this involves ensuring that the business meets the eligibility and suitability criteria set by the Home Office, nominating individuals to take on roles regarding the sponsor licence and providing required supporting evidence.

What should I be thinking about before I apply?

Things to think about will include the structure of the business and the workforce that you need to recruit. For example:

Is it better to have one sponsor licence in the UK or should there be more than one licence to reflect corporate ownership and subsidiaries?

Which talent pipelines are likely to be impacted by Brexit and are those roles one you would be able to sponsor under the new rules?

In addition, consider the costs involved with being a sponsor as this will involve costing not only the sponsor license application fees but also the sponsorship and visa charges that will be applicable to each individual sponsored. What visa and associated costs would be the business be required to bear and which costs could be reimbursed on a voluntary basis? The business will be required to nominate key post holders on the licence to be responsible for overall compliance and to undertake day to day tracking and reporting actions. It is important that the right individuals are identified from the outset depending on their area of responsibility and expertise.

We are already a sponsor, do I need to do anything?

Should you need to recruit EEA nationals, you will be making greater use of your sponsor licence from January 2021. It is worth being prepared for the following:

  • increased costs to your business when recruiting EEA nationals which will include sponsorship costs along with visa fees and charges – all of which will need to be factored into your business’ budgeting
  • does the business have the right resource levels in place to manage a rise in your sponsored workforce to ensure that visa holders and expiry dates are tracked?
  • are you able to assess how many additional Certificates of Sponsorship you are likely to need from 1 January 2021 onwards?
  • are the relevant teams aware of the new rules which come into force in January 2021 or is internal training needed for your recruitment teams and for those with responsibility on your current licence
  • further, it is unknown whether there will be a rise in auditing of existing sponsors carried out by the Home Office. However, it may be prudent to undertake an internal review to ensure that your current processes are robust and that all of your compliance obligations are being complied with in respect of your current sponsored population

Should we be bringing forward start dates of new EU national employees to this year?

This is definitely something worth considering if you can and if it is appropriate to do so because they may be able to qualify for pre-settled status rather than have to fit into the new immigration system.

There are some potential big advantages to doing this. Pre-settled status within the EUSS grants, effectively, the right to work in the UK for the next five years. It’s free, takes about 15 minutes to do and, other than those with serious criminal convictions, all currently resident EEA citizens qualify. Contrast that with the potential alternative of sponsoring a Tier 2 visa; several thousand pounds of expense for employer and assignee, a regulatory regime to comply with, the possibility that the basis for qualification will change in the future and that some workers won’t qualify anyway.

For those with a Tier 2 licence already, is it fit for increased usage?

It is likely to be the case that your current sponsor licence does not accommodate the possibility of EEA workers being sponsored to work under the new immigration system.

For many employers, that’s going to mean a major increase in the number of Certificates of Sponsorship issued each year, with a concurrent additional costs and regulatory responsibility on the employer. For smaller sponsors, it is often the case that one individual within an HR team has responsibility for all matters relating to immigration, which works well in the context of only a small number of certificates being issued each year. After the end of the Brexit transition period, that may need to change.

Have you assessed the potential additional costs of Tier 2 sponsorship of EEA workers? Do you need more Level 1 Users? Do more people need to be trained to use the system? Have budgets been agreed to reflect the additional spend?

Under the new regime, the removal of the resident labour market test, the fall in the relevant skill level to RQF3 and a change in minimum salary thresholds is likely to result in a spike in the number of candidates applying for eligible roles. Candidates will have an increased expectation that they could be sponsored (if a visa is required), as the resident labour market test will no longer prevent sponsorship where there are suitable settled workers in the pool. As there will be a larger pool of job roles capable of sponsorship than ever before, it is likely that most employers will seek a spike in the requirement for sponsorship.

How can we prepare for Brexit?

Whilst the necessary steps to take will vary considerably from business-to-business, we would suggest planning for the impact of Brexit should include each of the following.

1. Assessing the business’ reliance on EEA staff in key strategic areas of the business and whether the employee retention rate has changed

Many employers have done this already, but it will need to be an ongoing process post-Brexit which identifies the extent to which your business has an operational reliance on non-EEA and EEA labour and how this may change over the coming 12 – 24 months.

2. Identifying skill shortages and assessing the need for alternative visa types

Areas of skill shortage may not correspond to those occupations in which a high quotient of skill and training is necessary to undertake the role. We have spoken with several sponsors who have identified their warehousing and distribution functions as areas of the business in which EEA staff disproportionately work. Several sponsors working in residential care have recruiting candidates to train from EEA countries for several years., These roles don’t appear to fit well into potential sponsorship categories and longer-term processes to help such employees are likely to be necessary.

3. Considering the extent to which employees have been aware of the EUSSS Compliance and any refusals or delay of status.

The official Government statistics advise of more than 3.5 million settled status applications to date, which suggests most EEA employees do understand the requirements and have applied. This might not be the problem which it initially appeared, but some applications do seem difficult. In particular, we’ve noted that EEA Family Permit applications seem to take much longer than others, as do those relying on more complicated legal rights.

4. Identifying if travellers may require frontier worker permits when introduced later this year

This is the one action which it’s too early to take yet. We’re waiting for confirmation of what will be necessary to exercise activity as a frontier worker after the Brexit transition, although do know there will be provision to allow anyone who was a frontier worker before the end of 2020 to continue to be so. That seems relevant to those who regularly travel to the UK to work – those who have pan European roles, for example, or people who commute to work in the UK for one or two days a week. Whether relying on these provisions is a better approach than, for example, settled status or the new immigration system remains to be seen.

5. Work out how to accommodate VIP travellers and risk of future entry restrictions

EEA citizens have been used to largely unrestricted access to the UK for almost fifty years, so immigration restrictions are new in the lifetime of almost everyone who works in the UK and lives in the EEA. Is it worth considering if VIP travellers should obtain pre clearance to work in the UK after the transition ends? Are there restrictions which may similarly impact British citizens travelling to Europe for business visits/work.

There will be a need to fundamentally review immigration processes and compliance at the end of the Brexit transition period. The lockdown period has, in our view, obscured the fact that these changes will occur in January 2021 and that, however well prepared, few employers will be ready for this. We hope that asking the questions above and following the suggested approaches will help to prepare for this.