The spread of the COVID-19 pandemic across the globe is having significant and wide-ranging economic and public health impacts. Businesses are already feeling the adverse side effects of profoundly changed trading circumstances. This article highlights the immigration implications of a number of actions that employers may be forced to take to protect their business over the coming months, taking into account Home Office guidance as this is updated; this article has been updated as of 15 April 2020.(1)
Key points from latest guidance
The Home Office last issued revised information on GOV.UK on 14 April 2020.
The latest information confirms that individuals with an outstanding in-country application under Tiers 2 or 5 can start work with their new sponsor pending a decision on their application, provided that certain requirements are met.
Placing employees on unpaid leave
Before taking any decision to place Tier 2 employees on unpaid leave or grant voluntary periods of unpaid leave, employers must consider their sponsor compliance duties. These stipulate that a Tier 2 sponsored worker cannot take four or more weeks of unpaid leave per calendar year, according to their normal working pattern. Thus, for a person working a five-day week, the number of days taken must be fewer than 20 days and for a person working a four-day week, it must be fewer than 16 days. This is cumulative and not only in one single block.
The Home Office's standard guidance indicates that a person's leave may be cut short if this occurs, and that a sponsor may also face compliance action. However, the Home Office Coronavirus (COVID-19) immigration guidance for Tier 2, 4 and 5 sponsors initially published on 27 March 2020 states that sponsors need not withdraw sponsorship and will not face enforcement action if an unpaid absence from work of any length is authorised and due to COVID-19. The absences need not be reported on the sponsor management system. The guidance refers to absences including illness, isolation or inability to travel due to travel restrictions. Following the closure of schools and other childcare providers, an absence due to the need to care for children during the closures would arguably also be covered as being due to COVID-19. When using this concession, sponsors should make a careful assessment of whether each particular absence is due to COVID-19 and note this on the employee's HR file for audit purposes.
Cutting salaries or reducing hours
If employers are having to consider cutting salaries or reducing working hours, this may have implications for Tier 2 workers.
A drop in salary, whether made directly or as the result of a reduction in hours, must be reported on the sponsor management system within 10 working days. If a drop in salary takes a Tier 2 employee below one of the salary thresholds for Tier 2 (eg, the £30,000 general minimum for experienced workers under the Tier 2 General visa route or the minimum appropriate rate for the specific occupation under the relevant Standard Occupational Classification (SOC) code (if this is higher than the applicable general minimum)), the usual position is that they cannot continue to be sponsored. There are some specific exceptions where workers can continue to be sponsored, including where they are absent on an unpaid basis due to parental or long-term sick leave.
On 3 April 2020 the Home Office announced a concession for sponsors that have temporarily reduced or ceased trading. These sponsors can temporarily reduce the salary of sponsored workers to 80% of the salary recorded on their Certificate of Sponsorship (CoS) or £2,500 per month, whichever is lower. This concession sets aside the requirement for sponsored workers to satisfy the minimum salary threshold for their job type and visa category, including where they are being furloughed. Once the temporary salary reduction has ended, the salary must be returned to at least the same level as previously indicated on the assigned CoS.
Usually, if employers have to drop the salary for someone who was granted a Tier 2 General visa based on the fact that the employer did not need to run the resident labour market test as their salary was above £159,600, and the drop takes them below this salary level, the standard guidance requires the person to make a new visa application. However, the latest Home Office guidance does not appear to discount any type of Tier 2 sponsored worker from the salary reduction concession, including high earners, as long as the policy is company-wide with a view to avoiding redundancies and all workers are treated the same. This arguably means that sponsored workers are not to be treated more or less favourably than non-sponsored workers. The concession also does not appear to be restricted to the situation where the salary reduction occurs as the result of a sponsored worker being furloughed. The Home Office may provide further clarity on these points in due course.
Tier 2 workers must be paid in accordance with the information set out in their CoS, taking into account any subsequent changes reported on the sponsor management system. If employers choose to defer a sponsored worker's salary, this should be reported on the sponsor management system. Employers should also ensure that the deferral arrangement is appropriately documented on the worker's HR file.
If deterioration in the business's financial circumstances results in the deferral becoming a salary reduction, the information above on cutting salaries would apply.
Employers may consider seconding a Tier 2 worker (eg, where there is reduced need for them to carry out their role in the business) if the secondment means that:
- the employer can fulfil a contractual obligation with the receiving business;
- the worker will provide a service or work on a project with a specific end date; and
- the service or project will not be operated by the employer or anyone else after that time.
Employers must also continue to have genuine responsibility for deciding the duties, functions and outcomes of the job that the worker will do while on secondment, as well as being able to monitor the worker for the purpose of complying with their reporting duties.
Employers may also consider altering the duties of a sponsored worker such that the new duties do not fall within the job description on their CoS. This could happen as part of a secondment or due to changed operational needs. If so, a change of employment application (possibly including resident labour market testing) may need to be made. The only exception would be where the new duties still fall within the sponsored SOC code and the worker would not be moving from a shortage occupation within the code to a non-shortage occupation.
Normally, a change of employment application must be approved before a person can start working in their new role. However, the Home Office's guidance on GOV.UK has stated since 14 April 2020 that a Tier 2 or Tier 5 worker with a pending in-country change of employment application may start work in their new role before their application is decided, provided that certain requirements are met (for further details please see "Guide to immigration implications of COVID-19 for employers").
On 20 March 2020 the government announced the Coronavirus Job Retention Scheme ('furlough scheme') to provide UK employers with support for paying wages of staff who would otherwise have been laid off or made redundant (furloughed) as a result of COVID-19.
Under the furlough scheme, the government will reimburse up to 80% of the wage costs of employees who would have been laid off or made redundant, up to a maximum of £2,500 per month. Furloughed employees must be paid at or above the rate reimbursed by the government (ie, it is open to employers to top up the amount that they receive) but they should do no work for their employer during the furlough period.(2)
The Home Office appears to have made provision for the furlough scheme to be applied to sponsored workers, although the furlough scheme itself is not specifically mentioned. This is set out in a concession first published on 3 April 2020 as an update to the Home Office's COVID-19 guidance for sponsors.
Under the concession, sponsors can temporarily reduce the salary of sponsored workers to 80% of the salary recorded on their CoS or £2,500 per month, whichever is lower. The reduction in salary must be part of a company-wide policy to avoid redundancies in which all workers are treated the same. It would arguably be unacceptable for sponsored workers to be furloughed as a group because of their visa status, or for them otherwise to be treated more or less favourably than non-sponsored workers.
Once the furlough period ends, the salary must return to at least the rate specified on the sponsored worker's CoS. All changes in salary must be reported on the sponsor management system within 10 working days of the change.
There will also be extra considerations for employees who employers intend to furlough who are working for them on a Tier 2 sponsored work visa.
During any furlough period, Tier 2 employees are permitted to undertake training or do voluntary work in some circumstances. Supplementary employment is allowed, but only in a shortage occupation or in the same role and at the same level as their sponsored role. Supplementary employment also must be for no more than 20 hours a week and outside of the working hours stated on the sponsored worker's CoS.
In addition, the pay-outs from the government under this scheme derive from public funds. This may cause confusion or doubt given that Tier 2 sponsored workers and their dependants are prohibited from having recourse to public funds. In accordance with the government's guidance to employers on the furlough scheme and the definition of 'public funds' under the Immigration Rules, receiving funds that are made payable to employers through the scheme will not constitute recourse to public funds. However, where the government indicates that any reduction in salary may entitle workers to support through the welfare system, it is important to note that this is not available to Tier 2 sponsored workers or their dependants. To claim benefits in this way would be a breach of their immigration conditions, which could lead to the individual's immigration permission being cut short or future applications being refused. It could also potentially lead to compliance action against employers as a sponsor.
If employers are considering furloughing Tier 2 workers, they should seek counsel for specific advice on appropriate actions, including:
- reporting all changes in salary or working hours on the sponsor management system as a change in migrant circumstances;
- keeping detailed records of what has occurred, including records of the actions they have taken across the business to avoid redundancies, in case of future audits; and
- reminding such workers of the immigration conditions that may restrict their ability to work, train or volunteer.
Terminating employment of Tier 2 workers
Unfortunately, employers may be forced to consider terminating the employment of sponsored workers or making them redundant as a result of the economic downturn. In this circumstance, employers must notify the Home Office of the termination by submitting a report on the sponsor management system within 10 working days of the employee's last day of employment.
In normal circumstances, notifying the Home Office of a sponsored worker's termination or redundancy will initiate the process of visa curtailment and, after they have left the United Kingdom, a 12-month cooling-off period.
The Home Office will then issue the worker with a curtailment notice shortening their permission to stay in the United Kingdom to 60 calendar days and confirming the new visa expiry date. If there are fewer than 60 days remaining on the visa when the Home Office letter is issued, no change will be made to the expiry date. The curtailment will also apply to any dependent family members.
Between termination of employment and the new expiry date, an individual is permitted to seek alternative sponsorship or submit an application for leave to remain in an alternative category for which they qualify. However, if they are unable to find a new sponsor, they and any dependent family members will be expected to leave the United Kingdom or face enforced removal.
On leaving the United Kingdom, the 12-month cooling-off period will be triggered, and they will need to wait for this to end before they will be eligible to apply under the Tier 2 category once again. The cooling-off period can be bypassed only where the individual's new guaranteed salary exceeds the high earner threshold of £159,600 for Tier 2 General migrants or £120,000 for Tier 2 Intra-company Transfer migrants or where their original Tier 2 CoS was assigned for three months or fewer.
The Home Office's COVID-19 guidance for UK visa applicants and temporary UK residents currently confirms that people with a visa expiring between 24 January 2020 and 31 May 2020 will be allowed to extend their stay in the United Kingdom in circumstances where they would normally have to apply from abroad, but that all other requirements and fees for applications remain unchanged.
For now, aside from sponsors not needing to report working from home due to COVID-19, or COVID-19-related absences, all other reports must be made as normal. Further requirements may be waived once the Home Office has had an opportunity to further consider the implications of the situation as it develops, but this is not guaranteed.
Endnotes
(1) This article is being maintained on an ongoing basis here.
(2) General FAQs on the furlough scheme can be found here.
