Podcast: Immigration: Conundrums & Considerations

Transcript

Emma O'Connor: 00:08

Welcome to another episode of DC Talks, a podcast series from Workplace Specialist Law Firm, Doyle Clayton, where we take a look at an employment law, leadership or HR hot topic. I'm your host, Emma O'Connor, a partner in our employment team and head of client training. You can find our previous episodes of DC Talks on our website, on Spotify, or on Buzzsprout. In this episode, I'm joined by Liz Kynaston, a senior associate in our employment and immigration team here at Doyle Clayton. Welcome to the podcast, Liz.

Elizabeth Kynaston: 00:44

Thanks for having me.

Emma O'Connor: 00:45

So, Liz, I wanted to speak to you today because I know there's been a lot of chat on social media. I know that we're getting a lot of queries from clients about the Government's immigration White Paper and I thought it would be helpful for us to have a discussion. Now, I've called this podcast 'Conundrums and Considerations' because I do think that it's bringing up some real issues for our clients out there and also I thought it would be useful to cover those off, to talk about some of those, but also to give employers some tips and some considerations really that they should be thinking about now. Obviously, this is a high-level discussion, Liz. We are not going to give any advice on this podcast. So, as ever, please do get in touch with Liz and our colleagues in the immigration team if you want to find out more. Let's just take a step back if we can, Liz, and just give us a little bit of background information as to the immigration White Paper when it was published and really some of the key areas that it covers.

Elizabeth Kynaston: 01:52

Thanks, Emma. So, yes, as you say, there have been some really important changes to the immigration rules recently. So, important changes on work visas came into force on the 22 July, and it's part of, as you say, a raft of plan changes to the UK immigration system announced in the White Paper document that was published earlier this year. So, I think that the main changes for these purposes really are, well, there are two of them, and I'll kind of talk about each of them in a bit of detail, but pretty high level. We could talk for hours about the changes but the first one is the increase in the skill threshold for sponsorship under the skilled worker route. So, really broadly speaking, the number of jobs that qualifies for sponsorship under the skilled worker route has dropped significantly. So, to explain, the Home Office classifies jobs into different occupation codes. For example, there's a code for chief executives and a code for chefs. The occupation codes are graded at different skill levels. So, a chief executive role is classified as what's called RQF level six, which is degree level, and a chef role is classified at RQF level three, which is A-level level and that's just the grading of the role. So, it doesn't mean that the person needs to have that qualification, it's just how how the role is graded. So, since December 2020, the Home Office have allowed companies to sponsor people for roles RQF level three and above a nd the really important change is that from 22nd July, companies are only allowed to sponsor people for roles at RQF level six or above, with some very limited exceptions. So, that means that well over 100 jobs no longer qualify for sponsorship. So, for example, companies can no longer sponsor people looking to join the route as chefs or retail managers, just as a few examples. Just the fact that there are transitional provisions so if somebody was already, for example, sponsored in a chef role, they are still allowed to extend their visa or move to a new employer but employers can't sponsor people in those roles sort of going forward.

Emma O'Connor: 04:00

So, that impacts any new roles, new appointments as of the 22 July, Wow, gosh.

Elizabeth Kynaston: 04:07

Exactly and that's it, as you say, I mean the change is huge, really. So, since Brexit, companies have struggled to recruit from the settled workforce, particularly, you know, for certain types of roles and in particular sectors, things like hospitality, retail, I think often rely particularly on sponsored workers, and they're going to find that they can no longer sponsor people in those types of roles from 22 July and I think what's really important to bear in mind is the rule changes were announced in May. We were told on 01 July they were coming into effect on 22 July. So, it didn't really give companies that much time to prepare and to sponsor people perhaps that they've been planning to sponsor and I think on that skill level point, what we often see is companies will employ somebody perhaps who is a recent graduate on a graduate visa or who's got what's called a youth mobility scheme visa. Perhaps, you know, try them out effectively. So, maybe employ them for a year or two under that type of visa, see if they're a good fit, and if they are, then move them to sponsorship. So, I think you've got a lot of companies that perhaps plan to do that. So, we've got a pool of employees, you've got a graduate visa or a youth mobility scheme visa who they were training up, looking to then sponsor in the future, and and can no longer do that because of the rule change.

Emma O'Connor: 05:27

I mean, I can see this having a huge impact already on recruitment. As you say, you've this sort of graduate worker route as well. What's the other major change that the White Paper has brought in, Liz?

Elizabeth Kynaston: 05:39

So, the other change is the, and I think this has been getting sort of perhaps more of the press attention, the increase in the salary requirements for sponsorship under the skilled worker route. So, anyone who was sponsored on this route on or after the 1st of April 2024, the the general salary rate has increased from £38,700 per year to £41,700 per year. And so that means anybody applying for a Skilled Worker Visa now needs to be paid at least £41,700 per year or the going rate for their occupation code and essentially each occupation code has got its own minimum salary rate, essentially based on market rates. There are some situations where people could be paid less. For example, if they're what's called a new entrance, so they're under 26 or recently graduated, so they could be paid less. There are some transitional provisions for people that were sponsored before the 04 April 2024. But you can see that's pretty significant increase in salary levels, that again makes it harder for companies to sponsor people.

Emma O'Connor: 06:44

Liz, thank you for that and taking us through those two key changes and I know that there are other changes as well that yourself and the team are talking to clients about but before we go on to talk about some of the issues and the conundrums associated with the White Paper and its changes, I wonder if you could perhaps give us the wider immigration context and how changes are impacting and informing how sponsorship is viewed by clients and employers more generally.

Elizabeth Kynaston: 07:16

Yeah, so it's a really good point. I think it is important to see these changes in the wider context and I guess the uncertainty that there is for sponsors at the moment. One point, as I've already mentioned, that the Home Office have recently increased the minimum salary thresholds for sponsorship under the skilled worker route but I think it's worth noting that they also increased the salary thresholds pretty significantly in April 2024. So, we're finding quite a few clients are are getting concerned that when it comes to extending their sponsored workers' visas, essentially, you know, they don't know what the salary rate's going to be by the time they come to extend and whether they're actually going to be able to afford to sponsor somebody on that new salary. So, I think that that's creating uncertainty because you don't know whether the Home Office is going to keep increasing these salary rates. Another factor is that the immigration Home Office fees keep creeping up. So, it's already pretty expensive to sponsor somebody. If you're a large company and want to sponsor someone for five years, that's already going to cost you around £12,000 and that's assuming that the person doesn't have family members that will be joining them and almost more so at the moment, because the Home Office have announced they're going to increase the immigration skills charge fee by 32% for any certificates of sponsorship that are assigned on or after the 16th of December. So, that means for a medium or large company sponsoring somebody, say, for three years, the immigration skills charge will increase from £3,000, for the three-year visa, to £3,960, so you can see that that's a pretty significant increase and I think it's just adding to the financial pressure on sponsors. I think that the third relevant bit of context and something that we haven't really talked about yet, is that one of the changes proposed in the White Paper is to increase the period of residence required for a skilled worker to qualify for settlement. Under the current immigration rules, somebody who's got a Skilled Worker Visa will qualify for settlement after five years of living in the UK. Now, the Government's consulting on the new rules on settlement and consultation is due to close in February 2026. So, these are proposals only and we don't know what the final rules are going to look like but the current proposal is the default period of residence in the UK will increase to 10 years. So, somebody's default position would be somebody on a skilled worker for east would need to live here for 10 years to qualify for settlement, with some sponsored workers being able to qualify earlier. So, for example, if they have a high salary or they're making contributions to society, for example, volunteering, and some people having to wait longer than 10 years, in certain circumstances. Now, again, as I said, these are proposals only. We don't know how they're going to apply in practice and we don't know how they will apply to people who were already here on a Skilled Worker Visa when the new rules come into force but I think all of this is creating uncertainty for both employers and individuals. From the perspective of lots of employers, they have sponsored somebody, expecting t hat they'll need to sponsor them for five years, potentially, you know, factoring that into into budgets, etc. And now that they're facing quite a different situation, where they, potentially, may have to sponsor somebody for 10 years or maybe even 15 years before they'll qualify for settlement and so, I think that is creating a lot of extra uncertainty.

Emma O'Connor: 10:55

And it's, you know, potentially moving the goalpost, isn't it?

Elizabeth Kynaston: 10:58

Absolutely.

Emma O'Connor: 10:59

So, when we think about the direction of travel and the context which you've which you've just explained, let's think about some of the issues that you're finding, that clients are coming to you w ith, let's have a look at some of the conundrums, again, thinking about it from a kind of a high-level perspective, Liz.

Elizabeth Kynaston: 11:17

So, yes, we have been getting lots of enquiries from companies, in light of the the recent changes. I can obviously talk through some of the main issues that we've been seeing. I think before going through these in detail, this is a very lawyer comment, but I think it's really important to be aware that of course every situation needs to be decided on a case-by-case basis. This is a really complex area of law and there isn't lots of case law on it so, we'd always recommend that if you find yourself in any of these situations, as an employer, that you always take legal advice because the best course of action will often be very fact-specific. So, with that as a big lawyer caveat in mind, I think that the first issue that we're getting asked about quite a lot is whether it's okay to just have a blanket policy and not sponsoring anybody. So, we're going to recruit for a certain role but we're going to exclude applicants who don't have the right to work in the UK - are we allowed to do that? The short answer is that's risky from an employment law perspective because if somebody is automatically refused for a role, not because of their qualifications or anything like that, but simply because of their immigration status, effectively, they could bring a claim for indirect discrimination and it would then be for the company essentially to show that they can justify the policy that they took so that it was proportionate means of achieving legitimate aim.

Emma O'Connor: 12:43

Now remembering, of course, though, with discrimination law, is that an individual does not need to be an employee to bring a claim. It's one of those claims that individuals have whilst they are applying for roles, potentially, so again, that could be a huge risk area and red flag for employers.

Elizabeth Kynaston: 13:01

Absolutely and often the headlines that these kinds of issues can bring is quite a lot of negative publicity, exactly. So, I mean, the main Employment Tribunal case on this area of law involved the law firm Osborne Clarke but it's from quite a while ago, it's from 2009 but they had this sort of blanket policy in place where essentially they refused applicants for training contracts who didn't have the right to work in the UK and essentially, it sort of seems that they just assumed that those people wouldn't qualify for a work visa, so they should be excluded from consideration, essentially and that the tribunal decided that that was indirect discrimination. So, as I said, I mean the cases from 2009, it's obviously a long time ago and who knows whether it would be decided in the same way today. The immigration landscape does look quite different but it's something to be aware of. I think just more generally, it's just important that if companies are considering introducing this kind of blanket policy, that they really give serious thought about whether that policy can be justified a nd, of course, that will be fact-dependent. Again, it's a case of the importance of taking employment law advice before starting and I think probably a good example, just in the context of the recent changes, is you might have, you might be recruiting for a chef role. Now, as I mentioned, that's one of those roles that no longer qualifies for sponsorship under the skilled worker route. However, if somebody is already here with a visa as a chef, they can move to a new employer, as a chef. So, if a company said, well, we're recruiting for a chef role, that role doesn't qualify for sponsorship anymore so, we're just going to refuse applications for anybody that needs a visa, you're potentially actually excluding a category of people who were already here as chefs, who would, who could be sponsored. So, arguably that could go to the question of fairness, whether that decision could be justified essentially by that blanket policy so I think it's really important to be mindful of all of the circumstances and as I say, take legal advice.

Emma O'Connor: 15:03

What else are you seeing? What other questions are you getting, Liz?

Elizabeth Kynaston: 15:07

Something that actually we're starting to come across more, and this is quite similar to the point that I just mentioned, actually, about having blanket policies in place. It's to do with graduate visas. Essentially, somebody can obtain a graduate visa if they recently graduated from a UK university. So, at the moment, graduate visas are for two years but the Home Office is part of the White Paper reforms that I've been talking about are reducing this down to 18 months. So, if anybody applies for a graduate visa on after 01 January 2027, will only be granted a visa for 18 months. Now, lots of companies have grad schemes that are for two years and we're starting to get questions about, you know, well, can we just reject people from our grad scheme if they are on a graduate visa? Because we know that they're only going to have immigration permission for 18 months. It is a very similar issue to what I just talked about in terms of well, it is potentially indirect discrimination. Can that be justified? And I think it's it's something to think about. Does it need to be two years? Is there a legal reason for it to be two years? Or, you know, something that's required by a regulator or anything like that? Or is it just because that's how it's always been done? And I think it's, you know, and it might be that the company sort of says, well, no, we can justify a two-year grad scheme but I think these are the sorts of things that companies need to be thinking about and planning for and just sort of knowing how they're going to deal with these kinds of situations.

Emma O'Connor: 16:34

Absolutely, and not sort of assuming that, of course, two years is what it should be. What else, Liz? What's coming across your desk.

Elizabeth Kynaston: 16:46

So, I think a big one, I'm sure this won't surprise you but a big one, that we're seeing at the moment, is the situation where a company is currently sponsoring somebody on a Skilled Worker Visa, the visa is coming up for renewal and the salary rate that needs to be paid has increased so significantly from the time that they were first sponsored to the extension stage that the company says 'Well, we can't actually justify the jump in salary' and I think we're particularly finding that for people who were sponsored as new entrants initially. So, as I mentioned before, individuals on a Skilled Work er Visa might paid a bit less if if they're a new entrant, so they're aged under 26 or a recent graduate. Now, somebody might have been employed under the new entrant rates in, say, March 2024, perhaps on a salary, just as an example, £23,000 a year. Now they're looking to extend under the general salary rules and are having to meet a minimum salary threshold of £31,300 per year. Now, that's that's a pretty significant jump over the course of perhaps a two year sponsorship and I think lots of companies are, sort of, questioning 'Well, do we need to extend this person's visa? Do we need to increase their salary to make sure that they meet the minimum salary requirements for sponsorship?', and it's a really difficult question because actually, particularly if the person's been with you for two years or more, at that point they qualify to bring an unfair dismissal claim and so the short answer is you've got to be really careful about how you handle this and again, take legal advice. So, I mean, the starting point is you don't have to sponsor anybody, usually and I suppose in that situation that the salary on offer role doesn't meet the salary requirements for the role, as stated by the Home Office and, of course, a company can't say that they're going to sponsor somebody and pay them £35,000 and then only pay them £28,000. That's not allowed, the Home Office would treat that as a serious compliance issue. So, it's a really difficult question an d again, I think, sorry to sound like a broken record, but I think it's going to be something that companies need to consider whether they can essentially justify on a case-by-case basis. I suppose there might be a situation where a salary just needs to be increased by £500 to qualify for sponsorship. Would it be reasonable or expected for a company to increase the salary in those circumstances? But then equally you might find yourself in a situation where effectively you're artificially inflating the salary of sponsored workers and then so you have British workers arguing that that's discriminatory against them, because they're British. It's a really difficult situation and I think all I can say is , I think you would need to look at it on a case-by-case basis and be really careful before taking action and then I would strongly recommend taking employment law advice. I think something that I guess companies can take away is the need to be, I suppose, proactive and be looking at this as a potential issue now. So, if you've got somebody who is sponsored by you and you think maybe they won't meet the salary threshold, think about how you're going to deal with that now and of course, we don't know what the situation is going to be in a year's time or whatever but I think it's just being mindful of these issues and the need to plan and keep it in mind.

Emma O'Connor: 20:02

I think it's incredible, sound advice there, particularly when we think about where things are potentially going with immigration changes. So, absolutely planning is key, isn't it really? And also being mindful, as you said, not just of the individual's situation but also of that wider context. If we're increasing salaries for one individual, how does that impact upon others within the team? Particularly when you have, for example a difference in sex between workers. So, again, some really key issues to think about there. Planning, yes, what other tips, what other considerations should employers be thinking about?

Elizabeth Kynaston: 20:46

So, yeah, as you say, Emma, I think the planning is really important. Companies should make sure that they are aware of the changes that have already come into force but also the ones that are in the pipeline and, sort of, keep an eye on those and how they're likely to affect their businesses and their workforce. So, that's key. A related point, is auditing of your staff. So, make sure you know who you've got employed, who's on a visa and when it's likely to expire. To make sure that you're planning, you're looking forward to any decisions that may need to be made and sort of have at the front of your mind the impact that any changes in immigration might have on those workers. I think that that's another key point. I think another really important point is to, I guess, recognise the complexity of this area and not make any knee-jerk reactions. The interplay between immigration/ employment law can be really complicated and it might be that something is sort of allowed under immigration law but actually isn't advisable under employment law and I think it's often a case of sort of balancing those risks and really importantly taking legal advice to, I suppose, understand the risks and to make sure that you are taking the best possible course of action. I guess as well making sure that managers are aware of the risks that making these decisions, to do with sponsorship, could have employment law implications and so to be aware of that and to take advice as needed, or go to HR as needed, etc. And I suppose, related, we sometimes see a situation where a company's got somebody who's on a visa that's about to expire and they've got performance concerns about them and they're trying to use visa expiring as an excuse to effectively dismiss them for performance reasons and, as from an employment law perspective, that's not ideal. I think it's just being aware of these kinds of issues, you know, just because somebody's visa is due to expire doesn't mean that that you can simply decide not to re-sponsor them, without any potential implications, I suppose. So, that's another key point and I think that the last takeaway is always, you know, we recommend you take employment advice before taking action because as I say, this is just a complex area of law and there are so many potential pitfalls that it's best to be prepared and and I think as well to take employment advice as early as possible so that, you know, we can help guide you through the process and help you plan rather than almost just responding to a situation where, perhaps, it's it's gone wrong and looking for advice at that point. It's always best to take advice as early as possible. I think those would be my key takeaways.

Emma O'Connor: 23:24

Thanks Liz, some great points there and I think you're absolutely right, early intervention, being proactive, knowing your people, knowing your teams and your staff, auditing again is a fantastic point there. Thank you very much Liz for joining me today and thank you again for explaining that complex interplay between employment law and immigration law and to get on top, stay on top and ahead of the curve do subscribe to our immigration updates and as ever, this is an overview and it's no substitute for taking legal advice. Please do subscribe to our podcasts and follow us as well please, until next time, thank you again.