Businesses Stunted By the UK Immigration Cap

What is the Tier 2 (General) CoS?

The provisions of the Tier 2 (General) visa allow high skilled workers from outside of the UK/EU with a job offer to be sponsored and work in the UK. This is the visa category commonly used for graduate programmes and new hires looking for a permanent move, as following five years residence in the UK it usually leads to Indefinite Leave to Remain (ILR), but moreover in most situations this route also fills roles in the UK when a “settled worker” cannot be found. For those individuals already in the UK either under the same provisions with another employer (sponsor), a Tier 4 (Student) wishing to switch into an employment visa or those looking to extend their current Tier 2 (General) visa, the process is relatively straightforward. However, for those individuals looking to apply for their first Tier 2 (General) Visa from outside of the UK and having secured a suitable offer of employment from an approved employer, the process is more complex and currently provides uncertainty.

The Sponsorship Process

Before an employer can sponsor an individual, they must usually undertake a Resident Labour Market Test (RLMT). This entails the sponsor advertising the vacancy to settled workers in a way prescribed by the Home Office. Only if the sponsor is unable to identify a suitable settled worker for the role may they look outside of the UK/EU to fill the vacancy. Next, the sponsor must effectively seek permission to sponsor a non-settled worker to fill the vacancy, this is undertaken by applying for a Restricted Certificate of Sponsorship (RCoS).

What is the Shortage Occupation List?

The occupations making up the shortage occupation list are determined by the Migration Advisory Committee (MAC). The MAC regularly reviews the list and calls for evidence of which occupations should be included or removed. The last full review was conducted in 2014 suggesting a further review is looming. If a job appears on the list it means that the MAC have concluded there are insufficient resident workers to fill the available jobs, thus there is no further RLMT required. If the individual is considered a “high earner” or currently in the UK, the sponsor is usually exempt from applying for an RCoS, however there are exceptions. Conversely, if the role is on the list no RLMT is required, nevertheless the sponsor must request an RCoS.

What is a Restricted Certificate of Sponsorship (RCoS)?

In 2010 the then Home Secretary, Theresa May introduced an annual limit to the number of Tier 2 (General) RCoS of 20,700, in a bid to reduce net migration to “tens of thousands”. A Home Office spokesperson is quoted as saying “it is important that our immigration system works in the national interest, ensuring that employers look first to the UK resident labour market before recruiting from overseas.”

Sponsors are required to request an RCoS from the monthly pot by the 5th day of each month, the requests are considered by a panel on the 11th day. The requests are prioritised according to a criteria, essentially those on the shortage occupation list, have the highest salaries or are at a higher skill level (PhD) are prioritised as they are awarded the highest points. If the number of requests exceeds the available quota for the month, those scoring fewer points, in essence those with lower salaries are rejected, even if they meet the basic requirements of the Tier 2 (General) provisions.

The Tier 2 RCoS Crisis

Since inception of the system in 2011 companies have not had any considerable issues, with all qualifying RCoS requests by employers being granted. The quota cap has previously only being reached twice, both in 2015 after which the system resumed its former position. Indeed, the underlying message from the government has been that companies should ‘use it or lose it’ as it was not being utilised month on month and there were even discussions as to whether the quota should be reduced.The surprise was therefore resounding, when for the first time in December 2017 the quota was exceeded, leaving employers and immigration providers bamboozled. It was put down to a ‘glitch’ and that company’s should simply re-submit in the hope that they would receive a CoS especially after they had already undergone a lengthy advertising process, began planning moves and budgeted in readiness for talent to fill a much needed role in the UK, having not found a resident worker to fulfill the same role. Businesses merrily submitted their requests with the hopeful expectation that they would receive their CoS and be ready to continue; BAU. Startlingly in January and through to May, the quota has been continuously met and exceeded by approximately 300 requests each month (likely to be due to repeated applications) with no clear sign of the number of refusals decreasing. Where applications have been approved, the salary levels gaining the necessary points seem to be around the heady £50,000 salary mark and upwards, requiring points of around 45-50, instantly segregating those not meeting these points and bringing further insecurity to businesses trying to grow, in an already unstable market.

The Home Office’s Response

On 15th June 2018 the Home Office published a change to the Immigration Rules which will take effect on 6th July 2018 amidst intensifying pressure across business and health sectors, growing disarray from the public and negative reporting from the Press. The timing of these changes is telling as it is highly unusual to announce amendments to the Immigration Rules outside of April and November each year, suggesting that the new Home Secretary Savid Javid is making his mark on the department he has recently inherited.

The amendments to the Tier 2 visa category of the Immigration Rules will see doctors and nurses being exempt from the requirement to apply for an RCoS. This is a positive change as not only will it allow the NHS to recruit the best medical staff from the global market which reportedly they desperately need, but as a consequence this should free up much needed RCoS from the allocation. The released RCoS can now be assigned across sectors and hopefully bring an end to this crisis.

However, it seems a tall order for this one change to have a major impact to RCoS crisis. It is hoped that we will see the minimum salary requirement drop below the £50,000 in July, however we very much doubt we will see those with salaries around the £30,000 mark being approved any time soon.

Given the significant public opinion on this matter, we anticipate the Home Office will continue to explore other options to further meet the needs of the business and drive growth. These could be that they either increase the quota or listen to requests to remove roles that are on the Shortage Occupation List out of the mix, therefore further easing the burden for these companies and also to free up additional RCoS for businesses.

We hope that this initial change will see a vast improvement of the situation. A combination of the recent issues as well as the removal of the Tier 2 ICT (Short Term) category in April 2017 has seen companies explore other destinations, including Ireland which has seen a significant increase in like for like visas and businesses branching out to more welcoming environments. This compounds the uncertainties that Brexit has already brought to businesses and other institutes by crippling growth as visas cannot be issued to migrant workers that need them.

Please contact Nira Segaran (Country Manager) or Gavin Webster (Senior Immigration Consultant) if you would like any further information on this article.