Sponsor Licence and Tiers 2 & 5 Update November 2008

**ALERT- BUSINESS VISITORS** The UK Border Agency (“UKBA”) has announced that the new Business Visitor proposals, outlined in the Statement of Intent published on 4 November and which are due to go live on 27 November, are to be reviewed and re-drafted before 27 November 2008. This appears to be a reaction to suggestions made to UKBA by some interested parties that the proposed regime could allow sponsors to avoid Tier 2 and their associated sponsor obligations. UKBA’s proposal, contained in the Statement, stated that “secondees from overseas companies who have a contract with a UK company, provided they are being paid by the overseas company” may come to the UK on a short term basis to work (subject of course to tax compliance measures). Many companies had welcomed this proposal as an indication of a potentially reasonable step by UKBA towards finally clarifying the historically ill-defined business visitor guidelines, which have caused a significant headache for many employers and sponsors. Importantly the proposed approach would have meant that genuine businesses, including those in possession of a Tier 2 (ICT) sponsor licence, would have been able to safely transfer skilled employees to the UK as and when short-term urgent business needs arose. Under Tier 2 it will be virtually impossible to transfer an employee to the UK urgently. This will further complicate matters for Authorised Officers, who face the dilemma as to whether or not to comply with their obligations to report instances where business visitors in the UK have had no option but to work during a visit due to an urgent and unforeseen business situation. Such a report could lead to a mandatory ban from the UK for the individual and an investigation into the sponsor’s practices in relation to business visitors by UKBA. It is therefore highly regrettable that UKBA has decided to respond in such a way to suggestions that a more flexible route may be open to abuse. This will mean that genuine businesses are forced to sponsor more migrants under complex Tier 2 and sponsor arrangements than would have otherwise been the case. Gherson is lobbying UKBA to ensure that the amended proposals currently being drafted do allow business visitors in defined circumstances to work as and when the legitimate business needs of a responsible employer dictates. As soon as further information is published by UKBA, Gherson’s website will be updated to include an explanation of permissible activities for those entering as business visitors on or after 27 November 2008. PASSWORDS AND CD ROM FOR SPONSORS AWARDED A LICENCE UKBA has announced that those entities which have been granted a Sponsor Licence will shortly receive a CD Rom together with log-in details for the Sponsor Management System (“SMS”). The CD Rom contains 24 e-learning guides on the system. However, UKBA has also confirmed that sponsors will not be able to access the SMS until 27 November 2008. This gives sponsors no time to assign further Level 1 and Level 2 Users prior to the commencement of the scheme. IMMIGRATION RULES RELATING TO TIERS 2 AND 5 On 4 November 2008 UKBA published a Statement of Changes in Immigration Rules HC 1113 (“Rules”), a Correction to those Rules, Policy Guidance for Tiers 2 and 5 of the Points Based System and also Rules for the new visitor regime (including business visitors- though see above). There are significant contradictions in the Rules and the policy guidance with many aspects of the system remaining unclear. It is essential that sponsors are certain of their actions or refer to UKBA for clarity to avoid future problems. We are seeking clarification from UKBA on a number of issues and will provide updates on our website as and when we receive feedback. On 6 November 2008 David Cameron, leader of the Conservative Party, laid an Early Day Motion urging MP’s in the House of Commons to disapprove these changes to the existing Rules. If this action succeeds, it is likely that significant changes to the sponsor system will be forthcoming. UKBA has confirmed that the global refusal rate for Tier 1 applications, the first phase of the Points Based System, is currently 47%. This does not instill confidence for Tier 2, when applications for leave to remain and for entry clearance will be scrutinised in the same way as Tier 1 applications. It is therefore essential that sponsors take an active role in assisting their sponsored employees throughout the entire Tier 2 entry clearance or leave to remain application process. AS WE WAIT FOR TIER 2…CURRENT WORK PERMITS It is strongly advisable to continue filing work permit applications which meet the criteria under the present arrangements, rather than holding these back until Tier 2 becomes operational. If Tier 2 does proceed as planned on 27 November 2008, UKBA will only accept work permit applications which bear a genuine post mark of 26 November 2008 or before. Applications by courier must be received at UKBA’s commercial partner by no later than 5pm on 26 November 2008 and e-applications will close at midnight on 26 November 2008. It is advisable to follow UKBA’s Codes of Practice relating to Certificates of Sponsorship in relation to work permit applications filed before the end of the scheme as UKBA are taking a hard-line approach to the work permit criteria. The Codes can be found at: http://www.bia.homeoffice.gov.uk/employers/points/sponsoringmigrants/employingmigrants/codesofpractice/ This will provide essential back-up in the event of a refusal due to lack of skills of the individual or an insufficiently skilled role. It is also essential to check all work permit applications sent to UKBA between now and 26 November 2008 because if they are returned due to an administrative error (cheque/application form not signed, not dated, etc) then, depending on the date the package is returned, there may be no opportunity to re-submit the application before the work permit arrangements are abolished. Work permit documents will be valid for use in entry clearance/leave to remain applications for a period of six months from the date of issue (which could be several weeks after the application is filed). Work Permit leave of six months or less and multiple-entry permits Non-visa nationals in possession of a valid work permit for a period of six months or less will be able to continue to seek initial entry at a UK port. Individuals who hold leave as a multiple entry work permit holder should continue to be admitted under that leave until it expires (providing the employment remains unchanged). It is also expected that those in possession of work permit leave issued for six months or less will continue be able to seek re-admission at the port of entry at the discretion of the immigration officer, as under the current rules. However, given that it is critical that there is clarity on this, especially with many employees leaving the UK over the Christmas period, we have asked UKBA to confirm that they will be re-admitted and we will provide an update on our website. It is expected that the new Rules will cause wide-spread confusion at entry clearance posts and UK ports of entry. It is important that employees are informed, in advance of making applications/travel, of their legal rights in relation to entry under work permits and are also told to be polite to immigration officers! GUIDANCE FOR FINANCIAL SERVICE SECTOR SPONSORS UKBA has announced that it will issue specific guidance for employers operating in the financial services sector before 27 November 2008. WORKER REGISTRATION SCHEME AND BULGARIAN AND ROMANIAN NATIONALS Bulgarian nationals and Romanian nationals and those impacted by the worker registration scheme will be unaffected by the above rule changes coming into effect on 27 November 2008. Businesses wishing to employ nationals of these countries do not need to be licensed as a sponsor and will continue to file work permit applications for them (unless they have their own Tier 1 or other permissible immigration status). CHANGES IN WORK PERMIT CIRCUMSTANCES It is important that businesses review their current migrant workforce to ensure that they are fully aware of work permission expiry dates and to also ensure that the terms of the employment (including place of employment and the role) remain as informed to UKBA on the initial work permit application or subsequent updates submitted to UKBA. Any changes that UKBA have not already been made aware of should be notified to them as a matter of urgency in order that records can be updated to reflect the current employment position. This will also assist with avoiding problems in the future for the employees who hold work permits and to also avoid any allegation that the sponsor does not possess sufficient information about immigration procedures to discharge the sponsor duties. We understand that UKBA is reviewing its records against the details held by other government bodies such as HMRC and may take action against sponsors if incorrect or out-of-date information has been provided in relation to migrant workers. Additionally, employees who are entering the UK on an inaccurate or out-of-date approval could find their leave is curtailed and they could, in extreme circumstances, be accused of attempting to gain entry to the UK by deception and could face an entry/re-entry ban of up to ten years. SPONSORSHIP AND LEAVE UNDER TIER 2 (GENERAL AND INTRA COMPANY TRANSFER (ICT)) If Tier 2 does go live as planned on 27 November 2008, employers who have a sponsor licence may sponsor skilled workers under Tier 2 (General and ICT) in the following categories: Shortage occupations - the Migration Advisory Committee (MAC) has identified skilled occupations where there is a shortage in the UK. The list appears on UKBA’s website at: http://www.bia.homeoffice.gov.uk/sitecontent/documents/workingintheuk/shortageoccupationlist Resident Labour Market Test (“RLMT”) - where jobs have passed the RLMT employers will have to demonstrate that they have advertised the vacancy and have been unable to fill it from the resident labour force before they issue a Certificate of Sponsorship to the skilled migrant. Details of suitable RLMT methods can be found in the Codes of Practice (referred to above). Intra Company Transfers (ICT) - employees who have been working for a linked company overseas for a continuous period of six months immediately prior to the application for entry clearance can be transferred to the UK to work for the UK entity providing the sponsor has a licence that covers the linked entity overseas. The sponsor will be not need to undertake a RLMT. The employee must also earn a remunerative package appropriate for that job in the UK as referred to on the Codes of Practice and the job must be skilled at NVQ 3 or above. Payment of salary to the employee An employee who has entered the UK under the Tier 2 (ICT) provisions may be paid either in the UK or abroad. All employees entering under Tier 2 (General) must be paid in the UK, even if they are, for instance, the subject of an ICT but have not yet completed six months with the linked entity overseas. Employers who fail to adhere to this rule will be jeopardising their sponsor licence as and when UKBA carries out a compliance visit. (Please note that there are separate provisions for Tier 2 Sports Persons, Entertainers, Ministers of Religion and Tier 5 applicants which are outside the scope of this update). As yet, UKBA has not published practical advice to sponsors on issuing a CoS nor has it published information on how to maintain a sponsor licence, such as when to notify UKBA of changes in the organisation, the type of changes to be notified, what changes in personnel are to be notified, when and how, etc. Certificates of Sponsorship and applications for Entry Clearance and Leave to Remain The fee for issuing a Certificate of Sponsorship (“CoS”) will be £170. If the CoS is not activated within three months of issue, or the application for entry clearance or leave to remain is refused, or the potential employee accepts a role elsewhere and asks UKBA to cancel the CoS, the CoS and associated fee (including leave to remain/entry clearance fee if paid) will be lost. A new CoS will need to be issued and a fresh entry clearance/leave to remain application will need to be filed, with the associated fees payable again if the employment in the UK is to proceed. Under Tier 2 (ICT and General) an individual may only hold one ‘live’ CoS at any time. If an individual has two job offers, s/he will have to decide which to accept in order that the prospective employer may issue a CoS. If the individual then declines the role, they will have to request that the sponsor withdraws that CoS (the fee will be lost) in order that a new sponsor can issue a CoS. If the initial sponsor does not withdraw the CoS the individual may write to UKBA and request such action is taken by them. All individuals in possession of a ‘live’ CoS for entry under Tier 2 General and ICT must either obtain entry clearance before coming to the UK (even if they are coming to the UK for a period of six months or less) or they must apply for leave to remain if they are already in the UK in a category which allows them to switch into Tier 2. A CoS is live for three months from the date it is issued, so entry clearance/leave to remain must be applied for within that time or the CoS will expire. Additionally, the Tier 2 endorsement permits the individual (and defined dependants) to enter the UK under that leave no more than 14 days before the date employment is due to commence as indicated by the sponsor on the SMS. Such information on the system will be checked by the entry clearance/immigration officer as part of the application process. If information provided by the sponsor and the applicant does not match, UKBA has stated that it is likely that a referral will be made to the sponsor team or the application may even be refused. In theory sponsors should change the date on the SMS if the start date of employment changes for any reasons, for instance if the applicant applies for entry clearance/leave to remain but there is a delay of several weeks, for instance due to biometric processing times. In theory sponsors should also change the end date on the SMS if the individual is coming to the UK for a project of a defined length of time (i.e three months), or they may find the project has to be cut short when the individual’s leave expires or they have to issue a new CoS and the individual has to apply for further leave to remain. However, we have just learned from UKBA that the information on the CoS cannot be altered once it has been issued, and the SMS for the individual will not go-live until entry clearance/leave to remain has been issued. We have therefore asked UKBA how sponsors are meant to update the start date of employment and will update our website with the response. Applicants applying for Tier 2 leave to remain must send their applications including supporting documents to UKBA. Those applying for entry clearance will send them to the entry clearance post once biometrics have been taken. We understand that there will be no facility for a same-day service in the UK until at least Spring 2009. Processing times may vary significantly depending upon the numbers of applications received by UKBA and the resources available to process applications. If a passport is withdrawn for any reason, for instance business travel, then the application will also be withdrawn. Additionally, the sponsor should ensure that the date of commencement of employment is constant throughout the employee’s file so that clear evidence of Right to Work checks being undertaken before the commencement of employment can be provided, if this is required in the future, to establish a defence against a civil penalty. UKBA will have to issue practical guidance for sponsors on this issue and how they are to know when the entry clearance/leave to remain application is going to be approved so that the SMS can be up to date (subject to the above) and they do not fall foul of their sponsor duties. It is also hoped that UKBA will revisit the practicalities for a sponsor in having to monitor such information for potentially many sponsored employees who are waiting for approval of entry clearance, leave to remain and extension applications, in addition to discharging their other sponsor duties in relation to sponsored migrants whose employment has already commenced in the UK. Refusals and mandatory bans A CoS does not guarantee approval of entry clearance/leave to remain and skilled migrants will be subject to stringent entry clearance checks, including verification checks, on any document which is to be relied upon as proof of their eligibility under the scheme. For instance, entry clearance officers will scrutinise evidence of their qualifications, evidence of employment if an ICT or Post Study migrant, evidence of maintenance and of English language skills. It is also expected that entry clearance officers will closely check information provided by the sponsor on the SMS. Where evidence is unclear, inconsistent or cannot be verified as being genuine, it is likely applications will be refused or significantly delayed whilst checks are made with UKBA and the sponsor. A refusal leads to a loss of both the CoS and all fees paid. The individual will also have a refusal of UK entry clearance/leave to remain moving forward (this could affect applications to enter other countries and lead to further UK applications being heavily scrutinised). If an application is refused because the Entry Clearance Officer believes that the individual has attempted to deceive them, or because the individual has previously worked in the UK illegally, or has overstayed, or in a number of other circumstances, the applicant may also receive a mandatory ban from entering the UK for up to ten years. Refusals may also lead to compliance visits to the sponsor by UKBA officials and it is essential that sponsors take legal advice before engaging with UKBA in relation to any suggestion at all that they have breached their sponsor duties in issuing Certificates incorrectly or in negligently or intentionally assisting in illegal employment of or deception by a sponsored migrant worker. Appeals and administrative reviews Those who have applied for entry clearance which has been refused may seek an administrative review of the decision, but will have no right of appeal unless there is an allegation that the refusal infringes their human rights or is based on racial discrimination. Those applying from inside the UK who are refused leave are presently entitled to limited rights of appeal, although it is likely UKBA will restrict these rights. All other challenges will have to be by way of Judicial Review to the High Court. Tier 2 points Under Tier 2 skilled migrants seeking entry clearance or leave to remain will be subject to a points based test. The pass mark is 70 points, with an additional 10 points being required for maintenance and 10 points for English Language ability (other than under the initial phase of an ICT). Under the attributes test, points are awarded for the type of CoS (ie if the RLMT was passed, if it is an ICT job or a shortage occupation), qualifications and prospective earnings. Points table:- Section Sponsorship Academic or equivalent qualifications Prospective Earnings (£) A (50 points needed) Job on shortage occupation list Job that passes specified Resident Labour Market Test Intra Company Transfer or switch from Tier 1 (Post Study) 50 30 30 No relevant qualifications NVQ3/ SVQ3 Bachelors/ Masters PhD/ equivalent 0 5 10 15 17,000 - 19,999 20,000 - 21,999 22,000 - 23,999.99 24,000 + 5 10 15 20 B Maintenance requirement 10 C Competence in English 10 Prospective earnings and allowances The salary must be paid in the UK (unless ICT) and includes:- - basic salary (excluding overtime); - allowances (including daily payments to cover additional cost of living whilst in the UK but not including expenses to cover travel between the source country and the UK). In the cases of allowances made available solely for accommodation, and regardless of whether or not they are made in cash or in kind, this element of the salary package must not account for more than 30% of the total gross salary (regardless of the country from which the individual is being transferred); - if the applicant is working in the UK on a short term contract for less than 12 months s/he can claim points for projected yearly earnings (this does not apply to part-time workers); - UKBA will only award points for contractual hours up to a maximum 48 hour working week, even if the applicant is working more than 48 hours. Maintenance The maintenance test requires applicants either to have a minimum of £800 or equivalent in personal savings (and to have maintained that balance every day over the last three months, subject to transitional measures) or to have a written undertaking (in the form of a letter) from an ‘A’ rated sponsor confirming that the sponsor will maintain and accommodate the migrant during the first month of employment, should it become necessary. If the applicant wishes to be accompanied by dependants to the UK, there must also be available £533 for each dependant. A sponsor cannot provide an undertaking for dependant’s funds. The dependant maintenance test will also be subject to the three months rule and applicants may therefore find that they have to transfer to the UK before their dependants are able to do so. The level of maintenance is the same regardless of the country of origin of the employee. English language Individuals seeking entry under Tier 2 will be required to speak English to A1 of the Council of Europe scale. UKBA intends to provide guidance on other English language tests. Those entering the UK under the ICT provision will only need to demonstrate the required English language ability if they seek to remain in the UK beyond three years. Competency in English can be proved by: - passing relevant test in English equivalent to the appropriate level; - coming from a majority English speaking country (a list of countries has been published by the Home Office); - having taken a degree taught in English (as verified by NARIC). Job Skill level A sponsor may only issue a CoS to a migrant if the job skill level is at NVQ 3 or above and the applicant’s pay is at the UK appropriate rate for the job. Information and codes to be entered onto the CoS by the sponsor can be found at: http://www.bia.homeoffice.gov.uk/employers/points/sponsoringmigrants/employingmigrants/codesofpractice/ Applicants seconded outside the UK and those coming to the UK for short term business purposes Applicants who have leave under Tier 2 may be seconded out of the UK and may return to the UK for work purposes without making any further application providing they still have leave (and are returning for the employment as specified in the CoS). If an applicant is based overseas and required to enter the UK for work on a regular basis the sponsor can issue a CoS to them for use on multiple entries. The individual may return to the UK under the entry clearance associated with that CoS on each occasion they are required for work. Period of Stay and extensions Successful applicants will be granted leave for the duration of their role, as indicated by the employer on the Sponsor Management System (“SMS”) at the time the CoS was issued or up to an initial maximum period of three years and one month. They may then seek an extension of stay up to two years and 14 days. Under the current legislation, they may apply for Indefinite Leave to Remain (“ILR”) after a continuous period of 5 years residence in the UK. If a work permit holder is seeking to extend their stay under the transitional arrangement (see below) their leave will be extended up to the period of time the migrant needs to gain settlement, or the period stated in the CoS, whichever is shorter. Change of Employment An applicant who has previously received permission to work in the UK under Tier 2 (General) may apply to a different sponsor for a new CoS to be issued to enable them to change employment. The new sponsor will be required to complete a RLMT on all occasions (unless the job is one falling in a shortage occupation). Change of Circumstances- Migrant and Sponsor If the individual’s personal details, criminal convictions, contact details or representatives details change, they must inform UKBA on a Migrant Change of Circumstances form available at: http://www.bia.homeoffice.gov.uk/workingintheuk/tier1/general/changeofcircumstances/ Please be advised that this form currently relates to Tier 1 migrants and may be updated to include information more applicable to Tier 2 migrants once the programme goes live. In addition the sponsor must update the SMS as to any relevant changes described in the SMS guide relating to those employees to whom it has issued a CoS. Failure to report changes in accordance with the guide could cause the sponsor’s ranking to be downgraded to a ‘B’ rating, or in severe circumstances could result in a removal of the sponsor’s licence. There is also a Sponsor Change of Circumstances form changes in Sponsor details which must be reported to UKBA by hard form or in relation to requests for more CoS’, changes to ICT structures and so on. Curtailment of leave If the sponsor’s licence is withdrawn by UKBA or the sponsor does not apply to renew it, then UKBA may curtail the leave of any currently employed sponsored workers to 60 days. If a sponsored worker has leave for less than 6 months it is unlikely that UKBA will curtail their leave unless they are complicit in the events leading to the withdrawal of the sponsor licence. The sponsored workers will be required to either leave the UK, or must file a further application for leave. Transitional arrangements If a sponsored worker has completed less than five years in the UK with standard or ICT work permit leave (not TWES leave or MEWP leave) and seeks an extension then, providing they remain in the same job, they may apply for further leave to remain from inside the UK providing they have a valid CoS. The sponsor will not need to run a fresh RLMT and the individual will not need to meet the English language requirement (unless the migrant is seeking to switch from ICT to General employment). It is also likely that they will not need to satisfy the maintenance test. Indefinite Leave to Remain We are awaiting clarity from UKBA as to what constitutes a continuous period of residence in the UK. Under the present rules an individual will qualify for ILR providing their absences are due to business travel or permitted annual leave. Additionally, they must not be outside the UK for any period of more than three months continuously and should not be away from the UK for more than six months in total during the five years before the application. They must intend for the UK to be their main home and they must also provide a schedule of absences throughout the five year period. Once they have held ILR for one year, applicants can under the present rules apply for naturalisaiton as a British citizen (this is however expected to change). Employees who wish to gain settlement should be advised to maintain a record of all their travel to and from the UK in the five year period prior to the settlement application as this will be required for that application. Miscellaneous The above relates primarily to the Tier 2 General and ICT routes. Specific information relating to Sports persons, Entertainers, Ministers of Religion, Senior Care Workers, Tier 5 and other categories can be found in the guidance for those applications. TIER 5 UKBA has laid the Immigration Rules relating to Tier 5 temporary workers and the youth mobility scheme and a copy of the policy guidance can be found at: http://www.ukba.homeoffice.gov.uk/sitecontent/documents/employersandsponsors/pbsguidance/sponsorapplicationsguidance.pdf CIVIL PENALTIES AND SANCTIONS Gherson is being instructed on a weekly basis by growing numbers of very concerned bona-fide established UK companies in relation to action taken against them by UKBA concerning illegal workers. Specifically current UKBA action indicates that it will issue civil penalties in all cases where the steps set out in the guide to illegal working measures have not been followed, regardless of attempts made by the company to follow them and expense incurred in training staff on the procedures. This is despite the fact that the UK’s illegal migrant problem has arisen primarily due to UKBA and its predecessor’s inability and inaction over decades to prevent individuals from entering the UK who do not possess appropriate permission One fine for a sponsor will lead to a downgrade to a ‘B’ ranking. Further fines will signal removal of the licence and consequent affects for the sponsor and sponsored migrants (curtailment, affects on business etc). We also consider that the naming and shaming of bona-fide establishments simply because, for instance, one HR/recruitment person mistakenly failed to take a clear copy of a passport, alongside employers who have intentionally brought illegal workers to the UK to undercut UK businesses, may infringe the right to private life of the employer of that bona-fide establishment trying its best to comply in a busy business environment. We have written to UKBA and informed them of the potential infringement and will take the strongest action to preserve the reputation and sponsor licenses of our clients who are undertaking checks on their employees. GHERSON’S SERVICES Gherson offers a complete package of assistance, advice and training to UK businesses in relation to all aspects of business related immigration law, including illegal working compliance, sponsor licensing and applications under the Points Based System, assistance in relation to CoS applications and entry clearance/leave to remain applications. We have provided an end to end service to corporate clients and their employees for many years ensuring that work permit applications follow correct UKBA procedures and are converted into entry clearance and leave to remain endorsements, which are fully compliant with all aspects of UK immigration legislation. The firm’s business immigration team is ranked in the number 1 band in ‘Chambers’ and has an excellent relationship with UKBA officials in the UK and entry clearance officials abroad. We will continue to provide a fully compliant service to our business clients when the new sponsorship system goes live. INFORMATION For information as to Gherson’s services and fees please contact:- Nichola Carter: nichola@gherson.com (Nichola is author of this update series and partner and head of corporate immigration and can be contacted in emergency/out of hours situations on 07956 313508) Lisa Amos: lisa@gherson.com Leslie Rosberg Sarma: leslie@gherson.com (Leslie and Lisa have provided invaluable contributions to this update series) or by telephone: 020 7724 4488 Please contact joanna.jasina@gherson.com if you would like a copy of our September and October 2008 Sponsor updates which provide further information on sponsor licence matters or visit our website at www.gherson.com Information herein is up to date as at 19 November 2008. © 2008 Gherson- Disclaimer Whilst Gherson makes every effort to ensure that the detail contained herein is correct, it is intended for information purposes only and does not constitute legal advice nor does it represent a full guide to the system. Gherson is regulated by the Solicitors Regulation Authority.