Episode 1, Mobile Workforces: Recruiting Skilled Workers

Ruth Buchanan:
Hello, and welcome to the first episode in our Mobile Workforces Miniseries. My name is Ruth Buchanan, and I'm an employment law partner. Today I'm joined by Liz Parkin, a senior associate in our London office specialising in employment and business immigration.

Our miniseries will explore the ever-changing immigration rules that underpin mobility issues, and provide insights into the latest issues impacting our clients.

We'll be covering the life cycle of the employment relationship: from recruitment and onboarding issues, through to managing a mobile workforce, and what happens when the relationship comes to an end.

In this first episode, our focus is on engaging skilled workers: what this means, and what hurdles businesses need to overcome. You're listening to Ashurst Legal Outlook.

Mobility is vital to allow businesses to attract talent, focus on growth areas, and to expand. But freedom of movements no longer is easy as it once was. And our clients are now relying on visas on an increasing basis. So let's explore one of the most frequently used routes: the skilled worker.

Liz, we've seen a significant increase in clients looking for guidance on recruitment of migrant workers, cross-border work arrangements, and how best to attract talent into the UK. But why are we talking about this now? What is it that's changed?

Liz Parkin:
The sponsorship rate isn't new. This is a system that's been in place in various guises for a number of years. And it's been used for employing applicants from, say, the U.S., Japan, and Australia for quite a few years.

However, many of our clients used to rely on the UK's membership of the EU, and the benefits that came with the freedom of movement: both for travelling to Europe, but also then for recruiting candidates from the EU and moving their European staff from branches and moving them around Europe.

Now, Brexit might seem a long time ago. But as with a number of other areas, the impacts are actually masked by the global pandemic. So it's only really now that our clients are seeing the real impact and effect that Brexit's having on things like recruitment and onboarding.

This isn't just about business trips to Europe becoming more difficult from an immigration perspective. It actually goes much deeper with businesses, and they're reporting skill shortages and a really competitive recruitment market.

And what this ultimately is meaning is that businesses are now having to get to grips with our immigration system: what this means for a pool of talent that they've previously been able to freely access. And more often than not, this is now requiring those work visas.

Ruth Buchanan:
What does that actually look like for our clients, Liz?

Liz Parkin:
The most frequently used immigration routes, and there are loads that we could talk about, but the ones that are used most often actually require the UK employer, the business, to hold what we call a sponsor licence. And that process ... I mean, we could spend hours talking about it.

But fundamentally, the employers have to evidence that they are trustworthy and compliant in order to actually obtain and then retain that sponsor licence. And this sponsor licence then forms the framework for sponsoring different categories of worker. That includes the skilled worker, or what we used to call Tier 2 route. And we'll come back to compliance issues in one of our later podcasts.

But the key point to remember is that the licence comes with reporting requirements, eligibility criteria, and non-compliance can actually trigger that sponsor licence being suspended or revoked, which could stop a business being able to engage a candidate that requires a work visa. Or even in serious instances, an existing sponsored employee being deported due to the loss of a licence.

Ruth Buchanan:
In terms of that skilled worker route that you mentioned, what's actually involved in the visa process? What are the eligibility requirements you mentioned?

Liz Parkin:
There are three key ones that we focus on, and the first is the skills threshold. Presuming that a business already has that sponsor licence, they then need to ensure that the role that they're looking to put that candidate in is actually eligible to be sponsored. And then, that individual is eligible in themselves.

So for the skilled worker route, the role has to be what we call NQF Level 3 or above, which means that the role requires skills that are equivalent to A level skills.

There's actually a list of eligible occupation codes in the immigration rules. They're also set out on the dot.gov website. Not every single job title is included, but it is up to the business to identify the one that properly actually reflects that role and the skillset that they're looking to recruit for.

Ruth Buchanan:
How would our clients go about looking to find out whether the role that they have is at the right level and what the right code that they should be applying is?

Liz Parkin:
This all used to be on the dot.gov website. This has been taken offline now, and it's actually in a separate place.

There's an Office of National Statistics, an ONS website, which is linked at the top of that job coding list. That ONS site lets you put their job title in, and it'll bring up potential job codes and examples of duties that fall within those job codes.

Sometimes you might come up with three or four. And the burden is very much on that business, on the sponsoring employer to look through those different possibilities, look at whether the role fundamentally aligns to one of those, and to identify the correct one.

The key issue here is that an individual is tied to the occupation code that is chosen for sponsorship. And we'll talk about that more in our next podcast. But it's important to get it right in the first place, as changes to things like job title duties could actually trigger a new application process in its entirety if you haven't got it right that first time.

The other thing that we look for is whether the salary is at the right threshold. So the occupation code actually ties into the minimum salary, and the employee will need to be paid the higher of £25,600, which is the threshold or the going rate. And in most instances, also meet the £10.10 per hour rate.

Now the going rate is set out against those occupational codes, which are on the dot.gov website. And in a number of instances, those are significantly higher than that 25,600 baseline.
For example, a financial advisor or analyst carries a £29,400 annual salary. And a marketing director is as high as 54,900 per annum. So quite often, that going rate is quite significantly higher than that minimum threshold of the 25,600.

It's a really, really important thing that's, I think, something that our clients are trying to get to grips with at the moment: is that going rate is based on a 39-hour working week. So the salary has to be prorated, if you've got a different working pattern based on the weekly hours that you are stating that that employee's actually going to work.

So you've got these various minimum thresholds, then this concept of the 39 hour working week. That means that there's some math involved in assessing whether someone's going to be eligible or not.

There are some limited situations where a lower annual salary can be paid: for health and education roles, for example. But in most instances, you are running with that £10.10 per hour, and those then minimum thresholds and the going rate. Where the individual salary does not meet those thresholds, then you simply can't sponsor them.

Ruth Buchanan:
And how does this work for part-time roles?

Liz Parkin:
Again, this is somewhat unhelpful actually, but there is no pro-rating up. If someone's on a part-time role, then their salary still needs to meet those annual salary requirements.
If it's a three-day-a-week financial advisor role, even though they're part time, the salary still needs to meet that £29,400 going rate, and the £10.10 per hour calculation.

Ruth Buchanan:
You mentioned that there are individual eligibility requirements as well. What are they?

Liz Parkin:
One of the key ones that we come across is actually the English language requirement. In most instances, individuals will either need to take a test that's a secure English language test from an approved provider, to prove that they can speak, read, write, and understand English to a set level.

There are examples where they don't need to take a test. For example, if the individual's from the USA or Canada or Australia or one of the countries that's acknowledged English speaking, then they won't need to take that English language test.

Also, if they've studied, for example, come to the UK and done a degree in English, or they've done a foreign degree and that meets a set standard, then again, they can provide evidence to show that they've actually already been able to show they're able to read, write, speak, and understand those English language requirements.

In addition to the English language requirements, the individual has to be of good character. What that generally means is that they can't have been refused entry into the UK before. And in some roles, actually, criminal records checks might be required.

There's also a requirement for people coming from particular countries ... for example, China and Ukraine at the moment ... where they have to take a tuberculosis test in advance.

And one of the fundamental underlying concepts that really underpins all of these requirements is that this has to be a genuine role, and the employer needs to be able to justify why that applicant is actually suitable for the role. Have they got those skills and experience needed to actually fulfil the role that they're telling the home office that they are looking to recruit for?

Ruth Buchanan:
I know that the home office have relaxed the rules on how a business actually evidences how they find the right applicant. Do businesses still need to advertise the role if they want to sponsor the candidate?

Liz Parkin:
This is one of those changes that came in about a year or so ago now, and you are right. There's a formal requirement that applied to most roles previously for carrying out what we call the Resident Labour Market Test, which required the business to advertise in a set place for a set period of time, has been removed in most instances.

However, there is still this requirement that the business needs to be able to identify to the home office, how they found the candidate. And there's set information that the home office requests when the business wants to assign a Certificate of Sponsorship to the candidate to present the cause.

Now this is the internal process on the system where they say, "This is the role we want. These are the skill sets. This is the salary." At the same time as telling the home office about the role, you have to say, "We found a candidate. This is how we've we found them."

And if you've gone through a recruitment process, for example, then there's set information that has to be retained and provided, if requested, about how you've identified that person: whether it was a competitive interview process, how you've identified they have the relevant skills. Looking at their CV, their track record references. Also, you need to take things like a screenshot of the adverts, and keep evidence of why the other candidates were actually unsuccessful.

So you need to be able to justify to the home office why this particular person is best suited to the role. And there's a whole set list of information.

If it's been a word of mouth or a referral, for example, and there hasn't been in this competitive recruitment process, then you are going to need to be able to evidence still why this person is best suited.

So if you set them an interview process, if you've got evidence of their online activity, if they've made the news for any reason; again, things like CVs and references are going to be really key in those instances.

Ruth Buchanan:
It all seems pretty complicated. I guess a key thing for our clients is that this all really takes a lot of planning and thought.

One question we always get asked is around timing. How long does it take to follow this route?

Liz Parkin:
It does take quite a while. As I mentioned earlier, you need to have that sponsor licence up and ready to go. And once you've got the sponsor licence, you then have a Certificate of Sponsorship with you, to basically say, "We need this for this person."

You then assign that to the person. And you need quite a lot of specific information regarding the role, the candidate themselves. And as I said, to show it's genuine how you've recruited for this role.

Once you're satisfied that the role and candidate are eligible, the business assigns the certificate to the individual, and then the individual makes their own visa application.

Depending on where they're applying from, this whole process from start to finish could take anywhere from a few weeks to a few months. Particularly if the business doesn't already have a sponsor licence, then that in itself can take anywhere between eight to 18 weeks to obtain the licence.

And as you'd expect as well, there are costs associated with each stage of the process. The sponsor licence application process itself obviously attracts a fee. And this depends on the size of the business. It's £536 for small or charitable sponsors, or 1,476 for medium or large sponsors.

You've then got a Certificate of Sponsorship to assign. There's a £199 fee for that. There's what we call the immigration skills charge, which attaches to most occupation codes. In that instance, the business has to pay, essentially it works out for a medium or large business at about £500 for each six months.

So if you've got a five-year skilled worker visa, that's £5,000 of an immigration skills charge that's charged to the business. And you can't pass that cost on to the employee.

Ruth Buchanan:
How about for the individual, Liz?

Liz Parkin:
When the individual applies for their skilled worker visa, they need to pay the application fee, which is anywhere between 600 and £1400, depending on whether they're in the UK or not; pay the immigration health surcharge, and that's £624 per year of their visa. They also need to be able to show that they can financially support themselves.

So for a five-year visa, the total cost to the employer and the candidate side of things, without looking at legal advice, without looking at things like English language tests, TB tests, or translating documents, can be around the £10,000 mark.

And that isn't including, for example, if individuals want to bring with them a dependent or a spouse, because they're going to have their own visa costs.

So the processing times for the individuals will depend on whether they're in the UK or outside. It's generally around three to six weeks. But at the moment, there are significant delays with processing times sometimes being doubled because of the Ukraine crisis.

You really, really need to think about this whole process and plan and have all the information ready to go so it doesn't delay the business' plans.

Ruth Buchanan:
Can you do it any more quickly?

Liz Parkin:
There are priority and super priority options. For a sponsor licence application: if the business is needing to apply for that licence in the first instance, there is a priority service.

It's a bit of an interesting process, because it's a first come, first served email. You have to email the home office after nine o'clock in the morning, but not before nine o'clock in the morning, in which case they just ignore your email.

And it's the first 10 applications that they receive get through to a priority process, which is charged at £500. And you can imagine the amount of applications that they get. It's quite difficult sometimes to get through on that priority service.

And the individuals themselves can apply for priority services, which takes those decision times down potentially to only a few days. That comes at a cost. So that can be anywhere between 500 and £1500, on top of all those additional visa fees.

The priority and super priority for individuals is still running inside the UK: for people here, say, switching or extending. But that's actually been suspended for applicants outside of the UK, again, due to the Ukraine crisis and the home office focusing on those very important things or applications coming in from Ukraine.

Ruth Buchanan:
Thanks very much, Liz. I mean, that's an incredibly helpful summary. I mean, I guess what I take away from this conversation is in order for you as an employer to be able to be really clear that you've got this genuine role, you really need to get to grips with all of these different requirements.

And because the process takes potentially quite a lot of time, and you're going to be incurring significant costs, you really need to make sure that you've got a team heading in that thought: the planning, and making sure that they have that good understanding of all of these different routes.

Liz Parkin:
Yeah. And I think that's the thing: is a number of our clients have been applying for sponsor licences now in anticipation of needing to recruit. And you can do this, particularly with Brexit and things.

And actually saying to the home office, "We anticipate we're going to need to recruit people from outside of the UK," and actually getting that sponsor licence process up and running in place, in readiness, so that it isn't causing these long delays.

Also, fundamentally, just making sure that those who are dealing with recruitment are aware of some of the hurdles that need to be overcome, and that the right information is given to the right people. So that again, there aren't these timing issues.

Also that the key documents are retained, so that when the home office is asking for information about recruitment processes, the business has already got that in hand, ready to provide so it doesn't cause this back and forth, back and forth delay process.

Ruth Buchanan:
Liz, thanks so much for talking us to this morning. It's been incredibly helpful summary.

Liz Parkin:
No problem, Ruth; it's been great speaking with you.

Ruth Buchanan:
Thanks for listening. If any listeners want to get in contact with Liz or myself, then our details are on the Ashurst website, ashurst.com.

We have some more exciting podcasts on the way, including looking at how to manage changes to sponsored workers, the new global mobility routes, right to work, and onboarding.

To ensure you don't miss any future episodes, do subscribe now on Apple Podcasts, Spotify, or your favourite podcast platform. While you're there, please feel free to keep the conversation going and leave us a rating or a review.

Until then, thanks again for listening.

Speaker 3:
If you enjoy Ashurst Legal Outlook, why not check out our other two podcast series as well? Ashurst Business Agenda tackles the big strategic issues that business leaders face. And ESG Matters @ Ashurst reveals how business leaders are rising to mounting environmental, social, and governance challenges.

You can listen and subscribe to Business Agenda and ESG Matters wherever you get your podcasts.