On 11 June 2015, the monthly cap that applies to Tier 2 (General) Restricted Certificates of Sponsorship (RCoSs) was reached for the first time since it was introduced in April 2011. This has led to hundreds of applications being rejected, leaving UK employers unable to fill vacancies which require specialist skills which they have been unable to source from the local labour market. Furthermore, as it is highly likely that the majority of the rejected applications will be resubmitted next month and in subsequent months, it is expected that the monthly cap will continue to be met, posing further challenges for businesses looking to fill skill gaps with workers from outside the European Economic Area (EEA).

BACKGROUND

In April 2011, the UK Government introduced an annual limit on the number of Tier 2 (General) RCoSs that employers could issue to non-EEA nationals that they wished to sponsor to work in the UK. This limit applies to non-EEA nationals who are currently outside the UK who a UK employer wishes to sponsor to undertake a permanent role in the UK, which attracts a salary below the high earner threshold (currently set at £155,300).

The UK Government set the annual cap at 20,700 and has not increased it since it was introduced. The limit is divided into 12 monthly allocations. Until April 2015, these allocations were set at 1,725 per month. However, in April 2015, the UK Government changed the spread of the allocations so that 2,550 were available in April and 1,650 would be available for each of the following 11 months. This was to take into account the fact that, historically, there has always been a high number of applications in April. If the limit is not reached for a particular month, the remaining RCoSs are rolled over to the following month to ensure that the 20,700 limit remains available for the whole year.

In order to obtain a RCoS, companies that possess a Tier 2 Sponsor Licence must apply before the 5 of each month to a panel operated by UK Visas and Immigration (UKVI), the Home Office department responsible for immigration. On the 11 of the same month, the UKVI panel notifies those companies whether they have been allocated one of the RCoSs available that month.

Until this month, although the monthly limit had previously occasionally been exceeded, the number of RCoSs that had been rolled over from previous months had been sufficient to cover all the valid applications received. However, in June 2015, the UKVI received more applications than it had RCoSs to allocate so a large number of applications were therefore refused.

In the situation where the limit is reached, the UKVI allocates points to each application, mainly relating to the salary that will be paid to the non-EEA worker, as follows: 

Click here to view table.

The Home Office has confirmed that, in order to be allocated a RCoS under the June panel, the application had to score 50 points which effectively means that the role had to attract a salary of over £46,000.

It also confirmed that, once it had allocated all the RCoSs which attracted a minimum of 50 points, it still had approximately 400 RCoSs left to allocate. However there were so many applications received where the salary fell into the £32,000 - £45,999.99 band that, had it allocated RCoSs to all those applications, it would have exceeded the monthly cap. Consequently, the 400 remaining RCoSs have been rolled over to next month’s cap.

EFFECT OF MEETING THE CAP

The immediate effect is that, at a minimum, there will be a delay for some UK companies in being able to hire the non-EEA nationals they need to fill skilled vacancies as they will have to reapply to July’s panel. However, the concern is that, if everyone who was unsuccessful this month applies again next month, this number, combined with those that would normally be submitted for the July allocation, will result in the limit being even more heavily oversubscribed, even though an extra 400 RCoSs will be available to be allocated. This could lead to the salary required in order to ensure a successful application being raised even higher. This could create employment law issues since a company could end up in a position where it has offered a role to a non-EEA migrant but is unable to obtain the RCoS it needs to sponsor the individual to work in the UK.

It is understood that those most affected by the June limit being exceeded are companies who:

  • employ people outside London in areas where market rate salaries are lower; 
  • operate in lower-paid fields such as the engineering, care and hospitality sectors;
  • are small and medium size enterprises which often pay lower salaries than larger companies; or 
  • operate graduate training schemes.

Ultimately, with the UK economy improving, companies will continue to create vacancies which require skills which are in short supply in the local labour market. Consequently, unless the Government agrees to raise the limit or remove certain roles from the cap, the RCoS limit is likely to be regularly exceeded for the foreseeable future, creating further challenges for UK businesses.