UK immigration - what employers can expect in 2016
By Jessica Churchman, Senior Associate Solicitor at Laura Devine Attorneys, New York
April 4 2016 - 2016 is already looking like it may be an annus horribilis for UK immigration. With major changes to Tier 2 on the horizon, an "in/out" EU
referendum, and the controversial Immigration Bill 2015 in the pipeline, the UK Government is determined to stick to its mantra of limiting net migration to the tens of thousands.
Changes to Tier 2
Businesses wanting to recruit skilled migrant workers in order to cope with skills shortages in the resident labour market generally must sponsor migrants under Tier 2.
In June 2015, the UK Government commissioned the Migration Advisory Committee (MAC) to report on what it saw as an overuse of Tier 2, and recommend ways to reduce migration under this category. The MAC published its eagerly awaited report in January 2016, and, although there will not be a complete overhaul of Tier 2, the proposals are certainly prohibitive. They include:
- an increase of the minimum salary threshold for Tier 2 (General) migrants, from £20,800 to £30,000;
- the introduction of an Immigration Skills Charge, of £1,000 per migrant per year, to fund apprenticeships in the UK. This would be in addition to the Home Office
application fees and the Immigration Health Surcharge (IHS) that was introduced in April 2015;
- an increase in the qualifying period for Tier 2 (Intra-Company Transfer) (ICT) migrants from 12 to 24 months;
- expanding the IHS to Tier 2 (ICT) migrants who have, so far, been exempt from this charge; and
- a specific category for third-party contractors, with a higher minimum salary threshold and, potentially, a requirement to advertise the role first. This will particularly impact the IT industry.
Although the MAC's recommendations are not binding, they are highly persuasive and likely to be adopted. Doubling the qualifying period for a Tier 2 (ICT) migrant would put the UK's policy in stark contrast with other developed economies, such as the US, and, we expect, lead to an increase in applications for Restricted Certificates of Sponsorship (of which there are only 20,700 per year).
The spiralling cost of sponsoring migrant workers will disproportionately impact certain businesses, including public sector and creative sponsors, smaller enterprises and start-ups, and those operating outside London. It will make it difficult for some businesses to cope with skills shortages and to attract and retain talent to compete on a global scale, particularly given the diminished immigration options for students who wish to remain in the UK to work after the completion of their studies. On 15 February 2016, the House of Commons Scottish Affairs Committee reported that the limited options for post-study migrants had been harmful to Scotland - which faces different demographic challenges than the rest of the UK - and that Scottish businesses wanting to sponsor migrant workers are impaired by the high salary requirements.
As the MAC concluded, reducing Tier 2 migration will have only a marginal impact on reducing overall net migration. As a result, many in the business community are alarmed at this preoccupation with Tier 2, and see the proposals as potentially highly damaging to the UK's competitiveness. Figures published on 28 January 2016, by the UK Commission for Employment and Skills, show that skills shortage vacancies make up nearly 25% of all job openings. Simon Walker, the Director General of the Institute of Directors, commented that employers hire migrant workers because "they are the right people for the job" and are filling skills gaps, and that it is untrue that UK businesses are undercutting the resident labour market.
We expect many of the changes noted above to be introduced in April 2016, so sponsors that want to use Tier 2 in its current guise should act now.
A referendum on whether or not the UK should remain part of the EU will take place in June 2016. Expect fierce campaigning on both sides, and do not underestimate the consequences of an "out" vote for UK employers; businesses currently recruit widely in the European labour market. According to the latest opinion polls, the British public is fairly evenly split over the decision.
European Economic Area (EEA) nationals and their qualifying family members currently living and working in the UK are anxious about what an "out" vote would mean for them. Many are applying for permanent residence cards, or naturalising as British citizens. It is widely assumed, however, that if the UK votes to leave the EU, it will remain part of the single market, with an arrangement similar to Switzerland's, enabling the free movement of people to continue.
Hostile environment for migrants
The Immigration Bill 2015 will introduce a raft of measures that are hostile to migrants. Although the proposals are primarily aimed at those residing in the UK illegally, the Bill is likely to have wider ramifications. The UK Government has said that it will "make it illegal for employment agencies to recruit solely from abroad without advertising those jobs in Britain and in English". The Bill would also provide police with new powers to seize the wages of an illegal worker.
From 1 February 2016, right-to-rent checks are required to be made across England by landlords, agents or householders who are letting privately rented accommodation to adults, or taking in an adult lodger, to ensure that those renting in the UK are there legally. If these checks are not undertaken properly, and property is let to a person who does not have the right to rent, a civil penalty of £3,000 per illegal occupant may be imposed.
This is similar to the scheme that requires employers to check an employee's right-to-work documents before he or she starts work in the UK. The new requirement is likely to make it harder for migrant workers to obtain a lease before they are in the UK and can evidence their right to rent. Employers may, therefore, need to find temporary accommodation for migrant workers, or enter into conditional agreements with landlords; such agreements are permitted, provided that the tenant produces right-to-rent documents before he or she moves into the premises.
Criminal records checks
In September 2015, the UK Government introduced mandatory criminal records checks in the Tier 1 (Investor) and Tier 1 (Entrepreneur) categories. Main applicants and their adult dependents applying from outside the UK are required to obtain a criminal records certificate for any country they have resided in for at least 12 months during the last decade.
These checks will, eventually, be extended to other immigration categories, including Tier 2 sponsored migrants. Depending on where the applicant has resided, this may add weeks (or even months) to the process; as such, forward planning by businesses will be critical.
The UK's immigration policy will always be shaped by its political landscape. The economic recession, five years of David Cameron's Conservative leadership, and images of refugees flooding into Europe have created a perfect storm, and emboldened the UK Government in its efforts to reduce the number of migrant workers. In June 2015, annual net migration was at a new record level of 336,000, according to The Office for National Statistics, though it has dipped slightly since then. The Immigration Minister, James Brokenshire, stated that these figures were partly a result of "too many British employers still overly reliant on foreign workers".
Routes remain open for appropriately skilled migrants, and there have been some positive changes - most notably the expansion of the Tier 1 (Exceptional Talent) category, and the introduction of Tier 1 (Graduate Entrepreneur). Employers wanting to recruit migrant workers must plan ahead, and take strategic advice to ensure that they maintain a competitive advantage in the marketplace for global talent.