The government’s recent white paper restoring control over the immigration system is a disappointing read for businesses struggling to fill vacancies and employ overseas nationals.
Whilst awaiting further details, there are steps employers can take now to prepare for the changes.
Taking stock
The starting point is to undertake an audit of the individuals the business has sponsored over the last five years, including the number of sponsored workers and the role and salary in each case to help to assess the likely impact of the changes.
It would be helpful to gather similar information in relation to those employed under the graduate route, too. This is because the length of the graduate visa will be reduced from two years to 18 months, which may not be sufficient to complete a graduate scheme, so employers should check at the outset whether it will be possible to sponsor the employee before their graduate visa expires.
This is particularly key given the proposals will affect businesses sponsoring overseas nationals under the skilled worker route. Subject to limited exceptions where there is evidence of long-term shortages, the skills threshold for roles eligible for sponsorship will increase from RQF 3 (broadly A Level-equivalent roles) to RQF 6 and above (broadly degree-level and professional roles). Around 180 fewer occupations would be eligible for sponsorship under the skilled worker route. Any employer who regularly sponsors medium-skilled workers should consider what they can do to attract more candidates from the resident workforce, which may involve offering apprenticeships, more training or, in limited cases, more generous pay or benefits.
Reviewing training plans now will also be beneficial given that the government intends to establish a new Labour Market Evidence Group to gather and share evidence about the state of the workforce, training levels and participation by the domestic labour market. It will make recommendations about sectors or occupations where workforce strategies are needed, or where the labour market is currently failing. Key sectors where there are high levels of recruitment from abroad will then need to produce, or update, a workforce strategy which relevant employers will be expected to comply with, detailing steps to be taken on skills, training, and broader conditions, as well as engagement of the economically inactive domestic labour force.
Salaries, skills and settlement
Salary thresholds for sponsorship are expected to rise again but little detail is available. This may mean that businesses paying lower salaries – especially charities, those based outside London and smaller businesses – will, in practice, not be able to use the sponsorship route. Businesses will therefore need to consider how to attract and train more resident workers or be forced to raise salaries.
Even if the role meets the salary and skills threshold, overseas nationals may think twice about coming to the UK given that the standard qualifying period for settlement for Skilled Worker is set to increase from five to 10 years. Citizenship rules will also change to align to settlement reforms. It may be possible to reduce the qualifying period based on the individual’s contributions to the UK economy and society, but no details have been provided so it’s unclear who would benefit from this.
It’s also unclear whether the change would be applied retrospectively to those who came to the UK before the new law comes into effect. This will inevitably lead to uncertainty and stress for overseas nationals. Employers should keep a close eye on developments and update their sponsored employees once information is available. Going forward, it would also be sensible to explain to any employee coming to the UK under the skilled worker route that they may have to wait 10 years before applying for settlement.
Expanded English language requirements
Changes to English language requirements will also impact who is able to come into the UK under the Skilled Worker route. English language requirements for skilled workers will increase from B1 (Intermediate) to B2 (Independent User) levels and, for the first time, a new English language requirement for adult dependents will be introduced at level A1 (Basic User). Individuals will also need to show their English language skills have improved over time by demonstrating progression to level A2 (Basic User) for any visa extension, and B2 (Independent User) for settlement.
This is a very significant change, given that passing an English language test at B2 level requires solid fluency in everyday and professional interactions. Once the new rules come into effect employers will need to check that both the prospective Skilled Worker and their adult dependant speak English to the required standard before offering them the UK role. Employers may also want to consider offering to pay for English lessons, both before individuals come to the UK but also once they are in the UK, to increase the chance that the English language requirements for settlement are met.
Tackling rising costs
Employers will also need to consider the cost of sponsorship. Sponsoring workers is already very costly, with some of the highest fees in the world. Unfortunately, these costs look set to increase. In particular, the Immigration Skills Surcharge, payable by employers wishing to sponsor skilled workers, will increase by 32 per cent. For large businesses, the fee per year of the skilled worker visa will increase to £1,320.
Further, if employers have to continue to sponsor workers for 10 years this will lead to many thousands of pounds of additional costs. Employers would be advised to start modelling these costs to assess the impact on their recruitment and labour budget. Consideration could also be given to clawback agreements or requiring employees to pay for some of the costs. Advice should be sought though as certain costs cannot be passed onto the individual.
Compliance concerns
The white paper also confirms plans for increased enforcement action, including a focus on illegal working. Employers should ensure that they are undertaking compliant right to work checks, are complying with their sponsor duties, and undertaking regular mock audits, especially as there is an increased risk of a compliance visit in respect of any particular migrant if they are sponsored for 10 years, rather than the current five years.
Employers should also update employment contracts to ensure that sponsored workers are required to comply with their obligations and to clarify that ongoing employment is subject to the employee having the right to work, with no guarantee that it will be possible to sponsor the employee for the full 10 years. Employers should also take advice if they decide not to extend a sponsored worker’s leave or not to sponsor someone as this could give rise to a claim for indirect race discrimination.
Preparation is key
Whilst it may seem easier to ignore the immigration white paper, employers would be well advised to act now to prepare for the changes, rather than leaving it too late and finding they are unable to fill key vacancies or have not budgeted for the spiralling costs.
This article was first published in People Management and is available to read here.
Kerry Garcia