UK Government urges employers to prepare for new immigration system
In the midst of the COVID-19 crisis, the Government has released further guidance for employers regarding the new immigration system to be launched in January 2021.
The key thing for employers to note from this latest guidance is that if they wish to employ EU nationals after 1st January 2021 they will need to apply for a Sponsor Licence from the UK Home Office. Essentially, if a business wishes to maintain current staffing levels of EU staff they need to take action.
Although the Government had always planned to release the guidance around April/May 2020, the timing has understandably been met with controversy, especially given many of the job roles that are currently “essential” to fight COVID-19 are categorised in the new system as “low skilled”. Whatever your view point on the pros and cons of immigration, it does seem rather insensitive to be pushing ahead with a new system that will require many EU “essential” workers who are currently keeping the country running during lockdown to require work visas from 2021.
From a purely business operational point of view, this is the time to prepare your business for the new immigration system by applying for a Sponsor Licence. The Home Office has specifically added a new “Annex 9” to their guidance enabling businesses to apply for a Sponsor Licence without an immediate need for a new employee (as was required previously). Processing times are currently 8-10 weeks for Sponsor Licence applications, and this is due to significantly increase as we approach the January 2021 launch date.
The following FAQ’s address the main questions we have been receiving from our clients and demonstrate how the new immigration system may impact your business.
What will change in January 2021?
- A new points-based immigration system will be introduced from 1 January 2021.
- Free movement for EU nationals will end on 1 January 2021.
- EU and non-EU nationals will be treated equally under this new system and will require permission (a visa) to work in the UK.
How will the new immigration system affect my business?
Previously an EU national could work unrestricted in the UK – all they needed to do was provide a valid EU passport or EU Identity card to demonstrate their right to work. From January 2021, if you recruit an EU national (not currently resident in the UK before 31 December 2020) they will require a visa. This could mean a combination of an:
- Increase in recruitment costs – Government visa fees can range from £3000-£5000, depending on the application;
- Increase in recruitment lead times – visa processing can take 1-2 months depending on where the application is submitted and the required documentation;
- Increase in internal compliance – in order to sponsor a visa a business needs to sign up to a strict Sponsor Licence compliance regime. The onus is on employers to track expiry dates of visas, retain up to date contact details for visa holders, report any significant changes to employment, monitor minimum visa salary levels and report any significant changes to the business ownership. Any changes need to be reported within 10 working days so the monitoring of visa holders through internal compliance and HR processes is vital.
- Increase in Training – the so called “low-skilled” worker roles (below A-level standard) will struggle to obtain visas and you will need to be prepared to invest in training and up skilling the UK resident labour market to do these jobs.
What exactly has the Government said?
“Employers not currently approved by the Home Office to be a sponsor should consider applying now if they think they will want to sponsor skilled migrants, including from the EU, from early 2021.”
What is a Sponsor Licence?
A Sponsor Licence is granted by the UK Home Office to a UK business in order that the business can “sponsor” visa applications for employees. A Sponsor Licence effectively provides businesses with the ability to issue “work permits” (called Certificates of Sponsorship) to a non-UK worker so they can use this Certificate of Sponsorship to apply for a “work visa” (called a Tier 2 visa).
I already hold a Tier 2 Sponsor Licence under the current system, do I need to apply again?
No, if you already hold a Sponsor Licence, this will be valid under the new system. However, please note a Sponsor Licence is only valid for 4 years, so check when your current Licence is due to expire, and submit a renewal if needs be.
Do I need a Sponsor Licence?
If you wish to recruit a non-UK worker (including EU nationals from January 2021), yes, you need a Licence.
When should I apply?
Businesses should apply as soon as practicable. The processing times for a Sponsor Licence application are currently 8-10 weeks. At the end of 2019 these were a mere 4-6 weeks and we envisage processing times to continue to increase over the next few months as thousands of businesses will be submitting applications.
How do I apply for a Sponsor Licence?
The good news is that the application can be submitted online. A government application fee of £1,476 can be paid by credit card at the time of submission (£536 if considered to be a small company). The business then has 5 working days to submit original or certified documents to the Home Office in support of the application.
The documentation should be prepared before online submission, as if not received within the 5 working day timeframe the application will be rejected. The types of documents to submit vary depending on how long the business has been trading, the sector they operate in and the types of jobs they wish to sponsor. Examples include company bank statements, VAT Registration Certificate, office lease, PAYE reference number with HMRC, etc.
The business also needs to appoint a UK based employee to take overall responsibility for the licence, known as the Authorising Officer (AO). This person must sign up to the Home Office’s Sponsor Duties and agree to allow the Home Office to inspect and audit the businesses’ HR records to ensure compliance with immigration laws. Ideally this should be given to someone senior who has some involvement with recruitment and/or HR.
What are my Sponsor Duties?
The business needs to meet “suitability” criteria to be granted a Sponsor Licence – these are known as your Sponsor Duties. As the government has essentially outsourced the granting of work permits to employers, they require employers to be “honest, dependable and reliable”. This requires robust HR policies and procedures to be in place to ensure ongoing compliance. Your duties consist of:
- Tracking employee’s visa expiry dates;
- Ongoing employee record keeping to maintain up to date contact details for visa holders;
- Reporting any significant changes to a visa holder’s employment, for example change of role, salary increase, promotion, change of location, etc;
- Monitoring minimum visa salary levels;
- Reporting any significant changes to the business, for example change of ownership, relocating office, etc.
Most of the above need to be reported to the Home Office within 10 working days so the efficient and timely monitoring of visa holders through internal compliance and HR processes is vital.
What about my current EU staff members?
EU nationals and their family members currently living in the UK should continue to make applications for settled or pre-settled status under the EU Settlement Scheme. Please see our previous article for further details of the scheme.
Can a lawyer apply for a Sponsor Licence on my behalf?
Yes, a legal representative can apply for the licence on behalf of a company. They can also assist with issuing the Certificates of Sponsorship to individuals, visa applications and the general reporting and ongoing sponsor duties.
The UK Government is pushing ahead with their plans for the new immigration system so businesses must ensure that they are ready for the changes this new system will bring. If you have any further questions or require assistance with any aspect of your Sponsor Licence application please contact Stephen Hall. Stephen has over 10 years’ experience assisting businesses apply for Sponsor Licences and can discuss a tailored plan of action with fixed fees to guide you through the entire licence process.