Employers may receive mixed messages on immigration in 2023 as the Government grapples with addressing skills shortages while aiming to bring down net migration. As the recession bites, the Home Office may step up compliance activities for sponsors and on right to work.
In this article we explore some of the main themes we expect to see across the year and how we can provide information or assistance. To find out about the employment law trends of 2023, read our articles for Great Britain, Northern Ireland and Ireland.
Sponsorship of workers
Many more businesses now hold a licence to sponsor a worker under the Skilled Worker and Senior or Specialist Worker routes, which are the two main sponsored work routes in the UK (previously Tier 2 under the pre-Brexit Points-Based System). According to the Home Office's UK Visa & Immigration Transparency data Q3 2022, the number of sponsor licence holders in these routes has climbed from 30,278 at the end of Q4 2020 to 49,916 at the end of Q3 2022. This represents a 65% increase since the end of freedom of movement between the UK and the EEA. As the graph below shows, prior to this, sponsor numbers had remained relatively stable for some years.
* This information relates to sponsors under the Skilled Worker and Senior or Specialist Worker routes from 1 December 2020, and the predecessor Tier 2 routes before 1 December 2020
Demand for sponsor licences continues to be strong and we would anticipate the rise to continue in 2023. It remains to be seen whether the rate of increase tapers off as the UK labour market softens and/or the businesses needing to sponsor workers already have the necessary licence in place to do so. The Home Office has expanded capacity to process sponsor licence applications and remains committed to revising service standards to reduce the time it takes to sponsor a worker.
All sponsors of workers will need to be aware of their sponsorship duties, likely increases in compliance activity and system changes throughout 2023. Some of these are highlighted below. It may be beneficial for sponsors to consider sponsor licence refresher training or a mock audit to limit the risk of a licence being suspended or revoked.
Corporate restructuring and redundancies
The level of corporate restructuring activity remains high and this is expected to continue as businesses reposition themselves and look for efficient structures to respond to market conditions and shareholder expectations. Restructuring may have implications for sponsor licences, including the need to make reports to the Home Office and in some cases a requirement to apply for a new sponsor licence. See our article for some of the considerations for sponsors involved in a corporate restructure.
Also, where businesses implement redundancies or restructure job roles, they will need to consider how sponsored workers may be affected. This may include:
- Making notifications to the Home Office;
- Making fresh immigration applications where a role significantly changes; and/or
- Determining whether and what immigration-related assistance forms part of a redundancy package.
New services for sponsors
Part of the rolling programme of IT transformation changes outlined in the Home Office's 'sponsorship roadmap' is expected to take effect during 2023. This was pushed back by about a year due to resourcing issues at the Home Office. A new service, 'Sponsor a Visa' is due to launch in early 2023 and will allow visa applicants to access a partly-populated online application form once the details of their role have been approved. Employers will need to be aware of this change and will likely need to adjust their internal processes accordingly.
Improved sponsor licence management capabilities are due to be delivered for sponsors by late 2023, through the 'Manage a Licence' service. The 'Become a sponsor' service, which will provide a new process for intending sponsors, is not due to be available until early 2024. For further information on the sponsorship roadmap itself, see our earlier article here.
Increased sponsor compliance activity
The Home Office has confirmed its 'sponsorship roadmap' that sponsor compliance visits will remain a priority as it reforms the sponsorship system. Subject to resource availability, it is also possible that the Home Office will seek to increase scrutiny of sponsors if efforts to reduce net migration are stepped up.
Shortage occupation list review
Last August the MAC was commissioned by the Home Office to review the shortage occupation list for Skilled Worker sponsorship. The review is currently on hold 'pending clarification of the Government's priorities surrounding the Skilled Worker route'. It is to be hoped that during 2023 the MAC will be asked for input on current labour shortages and policy options to address them rather than the Home Office reforming the route without the benefit of this.
Increased salary thresholds for sponsorship
Inflation has pushed up wages significantly in 2022, which means that the existing salary thresholds for sponsorship could now lead to sponsored workers being paid less than other workers in the same occupation. It is likely that the Home Office will look to remedy this by increasing both occupation-specific and general salary thresholds in line with current market rates. Other eligibility factors such as the financial requirement could also see increases due to the raised cost of living in the UK.
Exemption from Immigration Skills Charge for certain Senior or Specialist Workers
Due to new regulations that came into effect from 1 January 2023, Sponsors of Global Business Mobility route Senior or Specialist Workers are exempt from paying the Immigration Skills Charge if all the following apply:
- The Certificate of Sponsorship is assigned on or after 1 January 2023;
- The worker is a national of an EU country or a Latvian non-citizen (note that nationals of Iceland, Norway, Liechtenstein and Switzerland are excluded);
- The worker is being assigned to the sponsoring UK business by an EU-based business within the same group; and
- The assignment is for no more than 36 months, as confirmed by the CoS start and end dates.
This will provide a cost saving for sponsors of some intra-company transferees where the assignment to the UK is for a relatively short duration and there is no intention for the worker to settle in the UK. For further information on this change, see our article here.
Right to work
At the end of 2022, the Prime Minister committed to stepping up immigration enforcement activities, including increasing raids on illegal working by 50%. Employers, especially those in 'high risk' sectors such as social care, hospitality and personal services, should consider additional training for staff and internal audits to ensure that they are compliant and that any internal process deficiencies are addressed.
The area of right to work saw significant change during 2022, including an end to COVID-19 adjusted right to work checks, the introduction of Identity Service Providers for digital right to work checks, and a reduction in the range of documents that can be accepted for manual checks. This year, employers may see further adjustments to right to work guidance and processes as the Home Office attempts to simplify its policy in this area. We would suggest making provision for a rolling training program in this area and ensuring that internal process documents and communications to employees are updated where appropriate.
Biometric Residence Permits (BRPs) and Biometric Residence Cards (BRCs) are due to be phased out by the end of 2024, with many holders' immigration permission expiring after this date. Since 6 April 2022, BRP and BRC holders have already been required to prove their right to work online. The Home Office will be communicating the steps BRP and BRC holders must take to prove their immigration status beyond the expiry of their BRP or BRC, although whether this will start in 2023 or 2024 is not yet clear.
Ongoing international skills shortages combined with tax, social security, employment law and regulatory requirements mean that being able to recruit and mobilise international talent will remain key for businesses worldwide over the coming year. However, countervailing economic, geopolitical and pandemic factors may slow down global mobility or mean that some countries are more successful at attracting talent than others.
From 5 January 2023, passengers arriving in England from mainland China must have a negative pre-departure COVID-19 test, and some will be invited to re-test on arrival. Measures to detect and assess new COVID-19 variants have also been implemented by other countries around the world.
Although the UK Government considers its actions to be precautionary and temporary, it is possible that 2023 will see new COVID-19-related travel requirements introduced and that this may make global mobility more complex and costly.
The UK will continue to negotiate new bilateral trade agreements with trading partners over the coming year. Our article covers the anticipated commencement of trade deal negotiations with Switzerland and the interim extension of the UK-Switzerland Services Mobility Agreement to the end of 2025.
Immigration law changes may flow from concluded agreements, most likely in the areas of youth mobility, service supply and intra-company transfers.
Electronic Travel Authorisations for visitors to the UK
The Home Office expects to commence the initial stages of a permission to travel scheme in 2023. The eventual plan is for all travellers to need a British or Irish passport, eVisa or Electronic Travel Authorisation (ETA) at the point they enter the UK.
The ETA will be for non-visa national visitors, including nationals who are currently eligible for an electronic visa waiver. It is a digital authorisation to allow an individual to board a carrier travelling to the UK. Obtaining an ETA will involve an online application (including providing biometric details), and payment of a small application fee.
A private beta release for ETAs is due in Q1 2023, with nationals who are currently eligible for an electronic visa waiver being able to access the new system in Q2-Q3 2023. ETAs are expected to be required for non-visa nationals from the rest of the world in Q3-Q4 2023, although this timeline will depend on whether the earlier phases complete on time. See the discussion on ETAs and other plans for a digital immigration system in our article here.
Regulation of travel to the EEA
During 2023 the EU is introducing systems for entry and exit monitoring and advance electronic travel authorisation. These will have a significant impact on compliance monitoring capabilities for British citizens travelling to Europe for short-term business or recreational reasons.
On 25 January 2023 we are running a webinar on British citizens travelling in the Schengen Area, which you can sign up for here. We have also produced a useful factsheet on Schengen visas.
To ensure compliance with immigration laws in EEA countries, UK employers will need to keep pace with the evolution of how these countries are regulating the entry and stay of British citizens. To keep up-to-date on global mobility developments across the EEA and worldwide, you can subscribe to Ius Laboris's Immigration & Mobility insights here.
EU Settlement Scheme
We expect to continue to see instances where individuals need or are eligible to make a late application for inclusion in the scheme. Common scenarios include where:
- A person held permanent residence under EU law, did not realise they needed to convert this to settled status and only became aware at the time of a right to work check for a new employer; or
- A person held permanent residence under EU law, left the UK and now wishes to return to the UK after an absence of less than five continuous years.
On a broader level, on 21 December 2022 the High Court held the EU Settlement Scheme to be unlawful in respect of the requirement for a person with pre-settled status to become unlawfully present in the UK if they failed to apply for further immigration permission before the expiry of their pre-settled status.
The Home Office will appeal this decision to the Court of Appeal in 2023 and it is likely the litigation may ultimately proceed to the Supreme Court. If aspects of the scheme are found to be unlawful, this would require the Home Office to make significant changes to the operation of the scheme. Guidance would need to be forthcoming for employers on right to work for affected individuals, e.g. those who present for employment with pre-settled status that has expired.
Reform to immigration laws and routes
The UK continues to have skills shortages, with a lower unemployment rate and higher economic inactivity rate than pre-pandemic. However, the prospect of a rising unemployment rate due to economic recession, as well as recent high net migration figures will act as a disincentive to the Home Office for introducing new immigration routes. Our recent Future of Work Hub report 'Eight drivers of change: 2022 and beyond' explores how migration is impacting the world of work with a spotlight on the current skills shortage.
The Migration Advisory Committee (MAC) has advised against the Government opening new visa routes unless there is a strong economic rationale, particularly where doing so may reintroduce freedom of movement on a sectoral basis, or may lead to low-wage workers being exploited. This opinion may make the implementation of a 'growth visa', initially raised under the Liz Truss Government, less likely. Nevertheless, the MAC has suggested consideration of a rural visa pilot and there are some routes that may be reformed alongside ongoing work to make the law and guidance underpinning the immigration system more user-friendly.
Immigration law consolidation and simplification
In January 2022, the Law Commission started a project to prepare a draft bill to consolidate primary immigration legislation. It is not yet known when a bill may be introduced to Parliament, however work on the draft will continue during 2023, possibly with stakeholder consultation.
The Home Office will also continue its existing project to simplify the Immigration Rules and associated guidance. In 2023 this is expected to include a further restructuring of the Rules, possibly to remove redundant Parts and Appendices, and to review and improve guidance on GOV.UK, both to Home Office caseworkers and to applicants. Two main sets of changes to the Rules and Guidance are expected to be published in the Spring and Autumn.
Route for business angel investors
In February 2022, following the closure of the Tier 1 (Investor) route, the Government announced an intention to launch a route for skilled and experienced professional business angel investors to invest in innovative businesses in the UK. However, this was not included in the Autumn 2022 Statement of Changes.
It is not currently clear whether or when this route may be brought forward under the current Home Secretary. However, some investors may be eligible to apply under the UK Expansion Worker or Skilled Worker routes.
Rural visa pilot
In its 2022 Annual Report, the MAC suggested piloting and evaluating a rural visa targeted at rural communities across the UK facing depopulation. To incentivise use of the visa, it proposed relaxing the skill level and/or visa fees for the Skilled Worker visa, but not creating regional salary thresholds. The Government may choose to explore this option during 2023.
Reforms to immigration routes for the agricultural sector
During 2022, the Seasonal Worker route has proven to be controversial, with agricultural sector employers calling for additional capacity to recruit workers from abroad to meet skills shortages, in part exacerbated by the war in Ukraine, set against a series of media reports of worker exploitation.
Defra has confirmed that in 2023, the cap on Seasonal Worker visas for the horticulture sector will be raised from 30,000 to 45,000, with a potential additional 10,000 places becoming available if necessary, and subject to employers demonstrating they have improved and complied with worker welfare standards, including providing a minimum number of paid hours per week.
The Home Office has agreed to take the following actions, in response to the Independent Chief Inspector of Borders and Immigration's report on immigration routes for the agricultural sector:
- To review the Seasonal Worker route, anticipated to be complete by April 2023;
- To establish a dedicated team to monitor how the immigration aspects of the Seasonal Worker route operate in practice, including introducing new guidance and training, developing specialist staff and using enhanced intelligence to counter abuse of the route;
- To publish a communications and engagement roadmap for the agricultural sector by April 2023; and
- To prepare a document outlining the roles and responsibilities of Home Office units that deal with the Seasonal Worker route by July 2023.
It is anticipated that reforms to the Seasonal Worker route and/or the Skilled Worker route may flow from the review of the Seasonal Worker route and other government initiatives aimed at supporting the agricultural sector.
Amendments to the Scale-up route
The Scale-up route was launched on 22 August 2022 to enable skilled individuals to move to the UK to work at a recognised UK scale-up business.
At the end of December 2022, only ten employers were approved as Scale-up route sponsors. The Home Office will be monitoring the progress of the route during 2023 and it is possible that adjustments may be made to increase uptake or in response to initial feedback about how the route has been working in practice.
Amendments to family, private life and settlement routes
The Home Office is expected to continue its planned simplification of the family, private life and settlement routes, including taking into account the recommendations of the Independent Chief Inspector for Borders and Immigration in his report on the processing of settlement applications under the partner and parent routes. No clear date has yet been identified for amended Rules and guidance to come into effect.
The Home Office intends to bring down processing times for family route entry clearance applications, potentially also reintroducing priority services.
Simplification and reform of these routes may be beneficial for employers as it may provide a more streamlined, flexible and cost-effective option than employer sponsorship for some individuals. It may in some cases be an alternative option where a prospective employee is not eligible for sponsorship. Sponsorship may however be a faster option until such time as processing delays in these routes are resolved.
Restrictions to existing immigration routes
For the year ending June 2022, the Office for National Statistics estimated overall net migration at 504,000. This was stated to be due to unique factors, including:
- General lifting of COVID restrictions;
- International students arriving in the UK after studying remotely;
- International students arriving in the UK following successful efforts by UK universities to attract them, and in view of the availability of the Graduate route making study in the UK more attractive;
- Arrivals on humanitarian routes including the Ukraine schemes, Afghan resettlement programme and Hong Kong BNO scheme; and
- Introduction of the post-Brexit immigration system.
Although the most recent net migration figure may not provide an indication of what the levels may be on a sustained basis, the Government has stated an intention to bring down net migration over time, with restrictions on students, student dependants and graduate route participants all being mooted.
Need more detailed information or assistance?
We will be monitoring immigration law developments throughout 2023 and will publish further information once it becomes available.
Through our Immigration Solutions for HR, we can offer training, compliance guides and mock audits of your systems to identify any areas of risk, suggest improvements and prepare you for a real Home Office sponsorship or right to work audit.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.