In Surrey there were approximately 1.3% employers holding a sponsor licence for the purposes of hiring international talent, out of 72,695 businesses in the county; in comparison, the UK figures as a whole were about 0.9% out of 3.1 million (illustrative figures based on Home Office and Office for National Statistics data as at 9 March 2018 and 10 March 2018 respectively). Does that then translate to the remaining 98.7% to 99.1% of Surrey-based and UK businesses not being allowed to employ migrants? The short answer is no, as employers do not necessarily need to “sponsor” an individual before they can lawfully work in the UK.
In this article we look generally at when UK employers do and don’t need to have a sponsor licence to recruit someone, and we also give an overview on how a UK employer applies for a sponsor licence which might be necessary for example in a TUPE situation.
Who doesn’t need to be sponsored?
The most obvious example of when sponsorship is not required is the employment of British citizens. Other categories of individuals who don’t need to be sponsored by an employer are EEA and Swiss citizens, and their (non) EEA family members – EEA is short for the European Economic Area and comprises of the EU countries plus Iceland, Liechtenstein and Norway. In a post-Brexit no deal situation, the position is likely to change, though the Home Office’s position is that “we will not ask employers or other third parties, such as landlords, to start distinguishing between EU citizens who were resident before exit [29 March 2019] and post-exit arrivals… Until 2021, EU citizens will continue to be able to evidence their rights to work and to rent property using a passport or national identity card, and non-EU family members will use a biometric residence document”.
Individuals who are settled in the UK and free from immigration time restrictions (e.g. have permanent residence or indefinite leave to enter/ remain) can work in the UK without needing to be sponsored. In addition, UK employers can also recruit non-EEA nationals without sponsorship, if individuals have a valid visa/ immigration document which permits employment in the UK for example:
- Spouse/ unmarried (same sex) partner/ civil partner visa
- UK Ancestry visa
- Turkish Worker visa
- Tier 1 (Exceptional Talent) visa
- Tier 1 (Investor) visa
- Tier 4 (General) student visa – generally up to 20 hours a week during term time; and full-time during vacation periods and after their course has ended
- Tier 5 (Government Authorised Exchange) visa – temporary recruitment generally for work experience/ intern roles under an authorised exchange scheme – sponsorship carried out by an “overarching body”
- Tier 5 (Youth Mobility Scheme) visa – “working holiday” visa
- Dependant visa – family members of “main” visa holders
- (Pre) settled status under the EU Settlement Scheme
The above and other visas/ options not mentioned can therefore be useful for employers in the UK who do not wish to “sponsor” individuals, though in some instances the visa might only be valid short-term e.g. a year, so other options might need to be considered by employers for strategic planning……. And don’t forget to make that important diary entry reminder to yourself to re-visit the right to work before the relevant period has expired.
Who needs to be sponsored?
On a longer-term basis, employers who struggle to recruit from the UK resident labour market or wish to recruit non-EEA migrants already in the UK but not settled/ from abroad to fill genuine vacancies will be able to do so if they have a Tier 2 (General) and/ or Tier 2 (Intra-company Transfer) sponsor licence.
Broadly speaking, the Tier 2 (General) sponsor licence will allow the recruitment of any non-EEA individuals to work for the sponsoring employer in the UK, usually following a proper recruitment process; whereas the Tier 2 (Intra-company Transfer) sponsor licence does what it says on the tin i.e. allows the transfer of non-EEA staff working in a linked overseas organisation to work for the UK entity. Different obligations will apply, and some examples are given in the above link and below. In any event, the vacancy will normally need to be skilled to Regulated Qualification Framework (“RQF”) Level 6 or above i.e. pitched at (but not necessarily educated to) graduate level or above for the job to be amenable to sponsorship.
It is also possible for a UK employer to recruit individuals using a Tier 2 (Minister of Religion) and/ or Tier 2 (Sportsperson) sponsor licence though these categories are not looked at in this article.
How to sponsor?
Employers who have a Tier 2 sponsor licence will probably be aware of the differences between the Tier 2 (General) and Tier 2 (Intra-company Transfer) categories, including what benefits and options there are under each. For employers who don’t have experience with sponsor licences, the process can generally be broken down into the following stages:
- Start the online sponsor licence application, considering whether a Tier 2 (General), Tier 2 (Intra-company Transfer), or both types of sponsor licences are required
- Identify the relevant Standard Occupational Classification (“SOC”) code, ensuring that the role is at least at RQF Level 6 or above, and what the appropriate salary level will be
- Identify who will be the “Key Personnel” such as Authorising Officer, Level 1 User, and Key Contact
- Identify which supporting documents are required and ingather these ensuring they are in the correct format
- Pay for and submit the online application, sign and send the “submission sheet”, cover letter and supporting documents to the Home Office within 5 working days
- Receive confirmation that the application was successful – this can take up to 8 weeks but will usually be quicker. A sponsor licence is usually valid for 4 years
- Carry out a “resident labour market test” (“RLMT”) if sponsoring under the Tier 2 (General) category, and one is required to demonstrate that there is genuine vacancy. This generally includes advertising the vacancy on Find a job and another acceptable source for a minimum of 28 days, with the job adverts containing prescribed information such as job title, job description, location, salary, closing date. Broadly speaking, sponsors do not need to carry out a RLMT if recruitment is under the Tier 2 (Intra-company Transfer) category or the vacancy is for a role which appears on the “shortage occupation list”, though other exemptions might apply
- Apply for a “certificate of sponsorship” (“CoS”). There are 2 types:
- Unrestricted CoS (“UCoS”)– There are no annual limits and these can be applied for as part of the online sponsor licence application process or as and when necessary once the sponsor licence is granted. Any unused UCoS will “expire” on 5 April. UCoS can be used for visa applications under the Tier 2 (Intra-company Transfer) category, and also Tier 2 (General) category in some situations for example doctors, nurses, and where a Tier 4 (General) student migrant (including those with permission under the “Doctorate Extension Scheme” wants to change to a Tier 2 (General) visa from within the UK, though other reasons can apply
- Restricted CoS (“RCoS”)– There is an annual limit of 20,700 and can generally only be applied for once the RLMT has been carried out i.e. after advertising for 28 days, unless exemptions apply. Applications need to be submitted by the 5thof the month to get a decision around 11thof the month. Applications submitted on/ after the 6thof the month won’t be considered until the following month
- Receive the CoS, pay to assign the CoS to the individual and “Immigration Skills Charge” (if applicable)
- Individual applies and pays for the relevant Tier 2 visa, including the “Immigration Health Surcharge” – this can usually take up to 3 weeks, but can be quicker. Once the visa is granted, the individual can travel to and work for the employer in the UK
- Ensure that the Key Personnel are familiar with the record keeping and reporting duties, throughout the lifetime of the sponsor licence and any deadlines are complied with
Where sponsored individuals are being TUPE transferred (or by similar protections) to another employer without a sponsor licence or has one but not covering the specific tiers/ categories, there is a change of ownership, merger, takeover and/or there is a de-merger, an application for a sponsor licence/ extension to include specific tiers/ categories might need to be made and if so, will need to be carried out within a specified timeframe as a sponsor licence cannot be transferred to another organisation. Failure to do so, might mean the individuals’ visas being cancelled and can potentially result in unfair dismissal claims, and the receiving employer might also be liable for a civil penalty as mentioned below if the individuals continue to be employed.
Whether an employer requires to sponsor an individual or not, compliant right to work checks ought to be carried out before employment commences to establish a statutory defence. In a TUPE situation, right to work checks carried out by the transferring employer will apply to the receiving employer – in other words, any statutory defence will be transferred but only if the right to work checks were compliant in the first place so a defective right to work check will also be inherited meaning the receiving employer could be liable for a civil penalty. If an individual has a visa or documents endorsed with “no employment”, “no work, “employment prohibited” or words to that effect and/or is in the UK unlawfully e.g. if their visa is no longer valid, then employment of these individuals can result in a civil penalty of up to £20,000 per illegal worker being imposed by the Home Office and the employer might also face criminal sanctions. There may also be negative implications such as “naming and shaming” of the employer, suspension of the sponsor licence (if applicable), and any application for a new sponsor licence in the future may be refused.We recommend that on a TUPE transfer you consider completing a full audit of the right to work checks carried out by the previous employer.
Visa categories which prohibit employment (by other employers) in the UK include for example:
- Short-term study
- Tier 1 (Entrepreneur)
- Representatives of overseas business/ “Sole Rep”
In addition, individuals will usually be prohibited from employment as a Doctor or Dentist in Training, and as a professional sportsperson (including as a sports coach) unless expressly authorised to do so.
Where an employer applies for, and during the lifetime of a sponsor licence, it is necessary that all the relevant documents capturing all the necessary information is retained. If a sponsor licence application is refused, then the business will normally be subject to a 6-month cooling off period before a new application can be made, unless a successful challenge is made. Compliance checks will usually be carried out by the Home Office either during the sponsor licence application process, or at least once during the lifetime of the sponsor licence.
There are therefore numerous options available to UK employers to recruit international talent and businesses should be mindful of what they can and cannot do. In a post-Brexit, future UK immigration system, it is expected that there will be reforms specifically affecting employers and sponsored migrants and these will likely come into effect in phases from late 2020.
We can assist with all matters of business immigration including: obtaining a sponsor licence; assisting with maintenance of sponsor licence; employing/ transferring international staff; audit of systems and checking compliance with sponsor licence duties; challenging the suspension and withdrawal of a sponsor licence; and challenging a civil penalty notice for illegal working. If you have any questions, require immigration assistance, and/or would like to subscribe to the immigration newsletter please do not hesitate to contact Vincent Chung: firstname.lastname@example.org.