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Home Office Issued Revised Guidelines for Employers Concerning Right to Work Checks in the UK
On 21 June 2024, the Home Office issued revised guidelines for employers concerning right to work checks in the UK.
Key updates include:
EU Settlement Scheme (EUSS):
Employers are no longer required to conduct repeat right to work checks for individuals holding pre-settled status under the EU Settlement Scheme (EUSS). A single check for pre-settled and settled status holders is sufficient before employment begins.
Biometric Residence Permits (BRPS):
Employers do not need to re-check an employee’s permission until it is due to expire, even if their physical BRP card expires by 31 December 2024. The transition to digital proof of immigration status (eVisas) by the end of 2024 means BRP cards may display an expiry date of 31 December 2024, despite the holder’s permission to stay in the UK beyond that date. The expiry date of immigration permission will be visible on their online profile.
Asylum Claimants:
Employers of asylum claimants holding Application Registration Cards (ARCs) must ensure these individuals have the right to work, verified through a Positive Verification Notice (PVN) from the employer checking service (ECN). There are specific restrictions and conditions depending on when the permission to work was granted, which are detailed in the guidelines.
Compliance Requirements:
It is mandatory for all UK employers to conduct right to work checks. Failure to comply can result in penalties of up to £60,000 per illegally employed worker, loss of sponsorship privileges for migrant workers, and potential criminal convictions.
These updates aim to clarify and streamline the process for employers, ensuring they meet their legal obligations while supporting compliance with immigration rules in the UK.
If you or your connections require legal advice, please contact Jayesh Jethwa or fill out our enquiry form below.
The Importance of Holding a Sponsor Licence for UK Businesses
Recent data from the British Chambers of Commerce (BCC) reveals a concerning trend: while 59% of UK businesses are actively recruiting, a staggering 80% face significant challenges in finding suitable candidates. Sectors like manufacturing and hospitality are particularly hard-hit, with an 83% difficulty in recruitment.
To address these challenges, the BCC advocates for solutions such as expanding the shortage occupation list, which would facilitate easier hiring of sponsored migrant workers for roles in high demand. This approach highlights immigration as a crucial avenue for alleviating current labour shortages.
The importance of sponsor licences has become even more pronounced post-Brexit. Prior to the UK’s departure from the EU, EU nationals contributed significantly to the UK workforce, filling many employment gaps across various sectors. However, since 1st July 2021, these nationals now require specific immigration statuses to work in the UK. Consequently, obtaining a sponsor licence has become standard practice, even for hiring from the EU.
Benefits Of Obtaining A Sponsor Licence
Access To A Global Talent Pool
Obtaining a sponsor licence enables UK businesses to tap into a diverse global talent pool. Whether it’s the specialised technical skills of a software engineer from Berlin, the creative insights of a graphic artist from Seoul, or the strategic financial expertise of an analyst from New York, a sponsor licence bridges geographical gaps.
This not only helps businesses meet their specific staffing needs but also fosters innovation and growth by introducing diverse perspectives and approaches. In essence, acquiring a sponsor licence allows UK companies to open doors to a world of possibilities, rather than just hiring employees.
Addressing Skill Gaps
As the UK continues to navigate challenges arising from Brexit and the aftermath of COVID-19, significant skill gaps persist across various sectors. These gaps can impede progress, stifle innovation, and compromise a business’s competitive edge. Fortunately, the sponsor licence offers a lifeline for companies facing such obstacles.
With a sponsor licence, UK organisations can strategically recruit from regions known for their expertise in specific fields. For example, a UK-based startup specialising in quantum computing could recruit top-tier professionals from abroad who possess rare skills in this burgeoning field.
The sponsor licence not only helps fill critical vacancies but also ensures that hires align with a company’s vision and strategic goals. It serves as a conduit for businesses to stay abreast of global advancements and maintain leadership in their industries.
Enhancing Competitive Advantage
In an era marked by rapid technological advancement and evolving market demands, maintaining a competitive edge is crucial for business success. A sponsor licence plays a pivotal role in achieving this goal. By enabling international hiring, businesses can assemble teams with unique skill sets and diverse experiences that may be scarce locally.
For instance, a UK fintech firm can leverage a sponsor licence to recruit blockchain experts from Canada or data security specialists from Israel, countries renowned for their expertise in these domains. Such strategic hires not only elevate product and service quality but also position the firm uniquely in a crowded marketplace.
Moreover, while competitors may be constrained by local talent limitations, businesses with a sponsor licence can leverage global expertise to forge ahead. Thus, the licence becomes a strategic asset that propels businesses towards unparalleled success.
Flexibility In Recruitment
Adaptability is crucial in competitive industries. A sponsor licence empowers UK employers with unmatched flexibility in their recruitment strategies. Previously confined by the limitations of the local talent pool, companies can now cast a wider net beyond the UK’s borders to swiftly secure the precise skills they need.
While the domestic labour market has its strengths, specific niches and specialised skills may be better represented overseas. Herein lies the beauty of the sponsor licence—it liberates organisations to identify, interview, and onboard professionals as needed, without the bureaucratic constraints that may have hindered them previously.
This agility not only ensures smoother project execution but also reinforces a company’s responsiveness to market dynamics.
Promoting Workforce Diversity
Diversity is no longer merely a buzzword; it’s a catalyst for innovation. UK organisations can leverage the sponsor licence to cultivate diverse teams comprising individuals with varied backgrounds, cultures, and experiences. Such teams are often more adept at devising comprehensive solutions that resonate with a global audience.
A diverse workforce brings fresh perspectives, unique insights, and diverse life experiences that enrich brainstorming sessions and foster a more inclusive workplace culture. This blend of talents enhances creativity and productivity, leading to superior products and solutions.
Facilitating Growth and Expansion
Modern businesses often aim to expand beyond local markets. For companies seeking to establish international footholds, a sponsor licence offers more than just recruitment benefits. It serves as a foundational tool for navigating foreign markets by hiring professionals who understand local consumer behaviours, regulatory landscapes, and cultural nuances.
These international hires not only contribute professionally but also stimulate local economies by becoming consumers, taxpayers, and catalysts for international trade opportunities. Their presence can foster collaborations and partnerships that bolster the UK’s economic vibrancy.
Enhancing Reputation
In today’s interconnected world, reputation is a valuable asset. Organisations that demonstrate commitment to excellence, inclusivity, and global collaboration often enjoy enhanced credibility and attractiveness to stakeholders, clients, and prospective employees.
A sponsor licence signifies a company’s dedication to these values, showcasing its readiness to scout for top talent worldwide. Over time, such a reputation can bolster loyalty, trust, and business growth for UK sponsor companies.
Navigating The Sponsor Licence Application Process
Applying for a sponsor licence entails more than paperwork—it requires navigating Home Office guidelines, understanding skilled worker visa processes, ensuring application accuracy, and maintaining compliance. This process can seem daunting, but support is available.
Our experienced team stands ready to guide and assist throughout the sponsor licence application journey. Together, we can ensure your business is equipped to harness global talent seamlessly.
Conclusion
In conclusion, as we look ahead to 2024, it’s evident that adapting to regulatory changes, such as the upcoming revisions to right-to-work checks, is essential for maintaining operational integrity and competitiveness. The strategic acquisition of sponsor licences emerges as not just a compliance necessity but a pivotal tool for accessing global talent and driving sustained business growth.
We encourage you to take proactive measures to ensure your organisation is prepared for these regulatory shifts. Explore how obtaining a sponsor licence can not only streamline your recruitment processes but also enhance your ability to innovate and meet market demands effectively.
Contact our team today to discuss how we can assist in navigating these changes seamlessly and leveraging sponsor licences to secure the skilled professionals your company needs. Together, let’s embrace these opportunities to strengthen your business’s position in the global marketplace.
Thank you for engaging with us in this exploration of regulatory developments and strategic workforce management. We look forward to supporting your business’s success in the dynamic year ahead.
If you or your connections require legal advice, please contact Jayesh Jethwa or fill out our enquiry form below.
Flexibility, But At What Cost?
The political and economic environment over recent years has created a lot of uncertainty. It has forced businesses to adapt to changing macro-economic trends and the wants and expectations of its employees to cater for the hybrid working model that is now the norm. As a result, there is a growing demand for flexibility as businesses are increasingly considering buildings which offer flexible, serviced office spaces.
Why Opt For Flexible Office Arrangements?
Serviced office spaces are flexible workspaces that are fully equipped, serviced and typically maintained by an operator or a management company. Depending on business needs, these spaces can vary in size from a single desk to an entire floor with flexibility to increase or decrease the space required quickly which may have huge impact on cost savings for businesses.
Demand for flexible office space is increasing and further growth is predicted not only amongst tech start-ups, SMEs and entrepreneurs but also larger corporates who are increasingly drawn by the richer and more varied working environment that flexible offices are able to offer. A Savills report concluded that because of the desire for flexibility, there has been a change in the size of occupiers who require flexible office space. The typical footprint in demand now is 2,500 sq. ft+ up from 500 – 2,500 sq. ft and there is increased demand from larger occupiers for flexible office spaces over 5,000 sq. ft.
There are several reasons for this. Flexible office spaces often come with essential furniture and IT and telecoms infrastructure already installed. They provide opportunities for collaboration as spaces are shared with other businesses allowing occupiers to take advantage of the surrounding business community which in turns helps facilitate higher levels of networking. The ongoing “war for talent” in the labour market is also forcing the occupiers to provide office spaces which offer multiple amenities to make their work environments more attractive. Higher fitting out and financing costs are also another factor as the responsibility for maintaining the office spaces is typically on the operator. All of the above has led to an increase in a diversified customer base for flexible, serviced office spaces.
It is easy to see why this type of occupancy is attractive in the market. Businesses can sign a standard agreement with the operator and start trading almost instantaneously. These agreements are typically short-term flexible licences allowing a business to scale up and down when necessary to react with the changing market.
But these agreements do carry with them potential legal pitfalls which may compromise a business’ commercial interests. In the search for speed and flexibility, businesses may enter into these ‘flexible’ agreements but without considering the legal and commercial consequences. To better understand this, we must go back to basics.
Back To Basics
Underpinning the flexible office space model is the distinction between the traditional lease vs licence concept.
It is well-established in case law that where an occupier is granted an exclusive right to occupy for a fixed period then, regardless as to how the document is named, it will be as a matter of law, a lease. A lease is an estate in land, it can be bought and sold, can survive change of ownership of any superior interests and subject to conditions, afford security to occupiers even after expiry of the lease term.
A licence, by contrast, is simply a personal contractual permission – in this case, to occupy land/property. It does not confer any proprietorial rights nor any security of tenure and more importantly, it does not give exclusive possession.
Hidden Risks
With more flexibility comes limited security and control. For instance, without exclusive possession, a business can be required to move to another part of the building to accommodate other users or worse still, prevented from renewing to allow for more larger, lucrative businesses to take up space. Lack of control also means a business may not be able to govern things like signage, fit-out and who they share the space with – does this allow the business to build goodwill and brand identity? What if the allocated meeting rooms are suddenly leased to another occupier creating a shortfall in space? If a business is concerned about privacy and wants to protect confidential information, does it want to be surrounded by a high density of other businesses in the same space? All-inclusive agreements may look attractive but they also tend to be more expensive than traditional leasing option with any add-ons incurring extra costs while also allowing the operator to increase the licence fee on short notice.
While businesses are put off by commitment of a long-term lease, protracted negotiations and potentially burdensome and costly repair and maintenance obligations, businesses must have their commercial interests in mind and understand that there is an important line between flexibility and security. Ultimately, misunderstanding the correct legal nature of agreement being entered into can have serious implications.
Conclusion
The specific needs and circumstances of the business will ultimately determine whether it opts for a flexible office agreement or a lease. While there are hidden risks, there are clear advantages to flexible office agreements – smaller initial financial capital, minimal legal negotiations, modern amenities, space for collaboration and overall flexibility. However, businesses should be warned that too much focus on flexibility can result in overlooking and misunderstanding essential legal and practical realities which can prove to be costly.
Businesses should be advised that they speak with a real estate specialist to ensure that any agreement caters for their commercial interests. Businesses must understand exactly what they wish to achieve out of any occupancy arrangement, the risks they wish to avoid, the responsibilities they wish to take on and then decide what the best legal means of achieving those ends would be whether it be a short-term flexible office agreement/licence or a formal lease.
At Quastels, we have experienced lawyers in our Legal 500 ranked Commercial Real Estate Team who can guide you through any occupancy arrangement and provide you with practical and tailored legal advice to best protect your specific commercial interests.
To discuss any of the points raised in this article, please contact Nabel Shaikh or fill in the form below.