Post-Brexit Business – Is Your Business Ready?

19th May 2020

Free Movement is ending at the end of 2020 and the UK government has published a Policy Statement outlining its plans for the new immigration system to take effect from the beginning of 2021.

Foreign workers coming to the UK from January 2021 will be subject to the new system.

The change

In February 2020, the government published a Policy Statement outlining its plans for the new immigration system, which will take effect from the beginning of 2021. Foreign workers coming to the UK as of January 2021 will be subject to the new system and there will be no distinction between EU and non-EU nationals.

What does this mean for business and recruitment?

In short, any business that relies on migrant employees and wishes to recruit overseas workers arriving in the UK from January 2021 onwards will require a sponsor licence.

This requirement will have a considerable impact on a range of businesses. According to the Office of National Statistics, between October 2019 and December 2019 there were an estimated 29.33 million UK nationals working in the UK—a record high and 227,000 more than the same period from a year earlier. There were also approximately 2.31 million EU nationals working in the UK, 36,000 more than a year earlier. In terms of non-EU nationals, there were an estimated 1.34 million working in the UK, 49,000 more than a year earlier.

Considering that the number of non-UK nationals working in the UK has generally increased year-over- year, it is imperative that businesses of all sizes look at their workforce and begin to plan for the new UK immigration system now. This will ensure that there is minimal impact on recruitment from the global talent market once free movement ends in January 2021.

The minimum skill level for sponsorship will be dropped, meaning that jobs considered to be A-level standard can be sponsored. In addition, businesses will no longer need to run the Resident Labour Market Test, as that requirement will be removed under the new system.

What action should businesses take?

As they prepare for the new immigration system in 2021, businesses that do not have a sponsor licence but anticipate that they will be recruiting migrant employees who are at least A level standard should consider applying for a sponsor licence now.

What is a sponsor licence?

A sponsor licence is permission from the government to hire skilled overseas workers under the skilled Tier 2 visa route. Once granted, a sponsor licence is valid for four years. Shortly before this period ends, a licence can be renewed. The only exception to this validity is if the government revokes the licence or the business surrenders it before the expiry date.

How does a company apply for a sponsor licence?

To get a licence, a company must apply to the Home Office using the online application form and supply specified documents to prove that it is suitable and eligible.

The company will also need to appoint key personnel to take up roles of an authorising officer, key contact and a sponsor management system user. The application process requires applicants to demonstrate that:

  • The organisation is genuine and has a lawful trading presence in the UK. It will need to explain why it is applying for a sponsor licence, the sector in which it operates, as well as operating hours
  • It has effective HR and recruitment systems and practices in place
  • The company offers genuine employment that meets the Tier 2 skill level and appropriate rates of pay
  • The appointed key personnel are honest, dependable and reliable

Preparation is vital for this application and it is essential that the correct documents are submitted with the application. At a minimum, the company must provide the documents that are detailed in the Home Office’s Appendix A of its Sponsor Guidance. These documents must also be submitted within five working days of the initial online application. If this timeframe is not met, it could lead to the rejection of the application.

Following receipt of its application, a company may also be subject to a compliance visit from the Home Office in order to ascertain whether it has adequate HR systems in place to meet the sponsor licence requirements and to assess whether the licence should be granted. The Home Office may also make relevant checks with other government departments. Considering this possibility, it is imperative that the company establishes strong processes for their future compliance obligations prior to the filing of the application. More information on this is available on our blog post here.

How long does the application process take?

A decision on a sponsor licence application can take up to 40 working days. With the impact of COVID-19, and a greater number of businesses submitting applications in preparation for 2021, there may be some additional time required for a decision. Planning is, therefore, key.

What happens if the application is refused?

If the application is refused, there is no right of appeal. The company will also need to wait six months before making another application.

Sponsor licence management

Once a company has a sponsor licence in place, it will be able to hire migrant workers to arrive in the UK after January 2021. However, there will be no room for complacency, as Sponsor licence holders must meet several compliance duties for the duration of their licence, such as:

  • Carrying out right to work checks on employees to ensure they are entitled to be in the UK and undertake the work required
  • Keeping up-to-date records of all foreign workers
  • Tracking and recording employee attendance
  • Reporting certain information, events and employee activities, such as non-attendance or non-compliance, a change of job details, salary or work location

The Home Office can also visit and conduct checks to ensure that the sponsor duties are being complied with, in addition to any pre-licence visits undertaken. They can visit unannounced and conduct checks at any physical addresses where the sponsored employees would be working.

Need help to apply for a sponsor licence?

The immigration rules and guidance can be daunting and seem cumbersome on employers who want to employ overseas talent. But it does not need to be a painful process, nor should businesses overlook the opportunity to plan.

Fragomen can fully support businesses of any size to navigate the sponsorship licence application process and all subsequent duties placed on sponsors. Our highly experienced and specialist teams can help businesses pull together sponsor licence applications and all supporting documents, ensuring that applications are successful and run smoothly. We can also audit your business and advise on your HR systems and policies to ensure they are compliant with the Home Office’s requirements, as well as help you prepare for Home Office visits.

As your business looks forward to 2021, the immigration legal requirements need not be agonising. We can assist you with visa applications and the ongoing compliance management of your sponsor licence, so that you can focus on other areas of your business growth.

If you and your business need assistance, please feel free to contact your Fragomen immigration professional or Laxmi directly, at Laxmi.Limbani@Fragomen.com.

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