Introduction
Sponsorship of workers
Right to work
Global mobility
EU settlement scheme
Reform to immigration laws and routes


Introduction

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.

This article explores some of the main themes that are expected to be seen across the year. For further details about the employment law trends of 2023, see "What's happening in employment law in 2023?" and "What's happening in employment law in Ireland in 2023?".

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 United Kingdom (previously tier two under the pre-Brexit points-based system). According to the Home Office's UK visa and immigration transparency data for the third quarter of 2022, the number of sponsor licence holders in these routes has climbed from 30,278 at the end of the fourth quarter of 2020 to 49,916 at the end of the third quarter of 2022. This represents a 65% increase since the end of freedom of movement between the United Kingdom and the European Economic Area (EEA). As can be seen in Figure 1, prior to this, sponsor numbers had remained relatively stable for some years.

Figure 1: number of sponsor licence holders. 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 the rise is anticipated 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 (for further details, see "Implications of corporate restructures for businesses' sponsor licences").

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 information technology 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 (for further details, see "Home Office sets out immigration and border control strategy up to 2025"). 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 "Home Office releases points-based immigration system sponsorship roadmap".

Increased sponsor compliance activity
The Home Office has confirmed in 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
In August 2022 the Migration Advisory Committee (MAC) was commissioned by the Home Office to review the shortage occupation list for skilled worker sponsorship (for further details, see "MAC to review skilled worker SOL"). 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 United Kingdom.

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:

  • the certificate of sponsorship (CoS) is assigned on or after 1 January 2023;
  • the worker is a national of an EU country or a Latvian non-citizen (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 United Kingdom is for a relatively short duration and there is no intention for the worker to settle in the United Kingdom (for further details, see "New ISC exemption for certain senior or specialist workers").

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:

In 2023, employers may see further adjustments to right to work guidance and processes as the Home Office attempts to simplify its policy in this area. Employers may wish to provide for a rolling training programme in this area and ensure 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.

Global mobility

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.

Covid-19
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 retest 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.

Trade agreements
The United Kingdom will continue to negotiate new bilateral trade agreements with trading partners in 2023. For further details on 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, see "Extension of United Kingdom-Switzerland SMA".

Immigration law changes may flow from concluded agreements, most likely in the areas of youth mobility, service supply and intra-company transfers.

ETAs for visitors to the United Kingdom
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 United Kingdom.

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 United Kingdom. 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 the first quarter of 2023, with nationals who are currently eligible for an electronic visa waiver being able to access the new system in the second and third quarters of 2023. ETAs are expected to be required for non-visa nationals from the rest of the world in the third and fourth quarters 2023, although this timeline will depend on whether the earlier phases complete on time (for further details, see "Home Office sets out immigration and border control strategy up to 2025").

Regulation of travel to EEA
During 2023, the European Union 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.

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.

EU settlement scheme

It is expected that there will continue to be 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 United Kingdom and now wishes to return to the United Kingdom 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 United Kingdom 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 – for example, those who present for employment with pre-settled status that has expired.

Reform to immigration laws and routes

The United Kingdom continues to have skills shortages, with a lower unemployment rate and higher economic inactivity rate than before the covid-19 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.

The 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 some routes 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 Spring 2023 and Autumn 2023.

Route for business angel investors
In February 2022, following the closure of the tier one (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 United Kingdom. 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 United Kingdom 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 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 Russia-Ukraine conflict, 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 scale-up route
The scale-up route was launched on 22 August 2022 to enable skilled individuals to move to the United Kingdom to work at a recognised UK scale-up business.

At the end of December 2022, only 10 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-19 restrictions;
  • international students arriving in the United Kingdom after studying remotely;
  • international students arriving in the United Kingdom following successful efforts by UK universities to attract them, and in view of the availability of the graduate route making study in the United Kingdom more attractive;
  • arrivals on humanitarian routes including the Ukraine schemes, Afghan resettlement programme and Hong Kong British national (overseas) 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.

For further information on this topic please contact Andrew Osborne, Supinder Singh Sian, Stephen O'Flaherty or Naomi Hanrahan-Soar at Lewis Silkin by telephone (+44 20 7074 8000​) or email ([email protected], [email protected], stephen.o'[email protected] or [email protected]). The Lewis Silkin website can be accessed at www.lewissilkin.com.

Kathryn Denyer, managing practice development lawyer, assisted in the preparation of this article.