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Business Immigration: RCOS Allocation

The Tier 2 Cap For Sponsored Workers Has Been Hit For The Third Consecutive Month

The limit on restricted certificates of sponsorships (RCOS) has been reached for the third month in a row. What impact does this have on an employer’s ability to recruit into essential roles to meet their workforce needs?

Background

To secure recruitment from overseas, employers who hold a Tier 2 licence for sponsored workers must apply for a RCOS. The annual limit of RCOSs is 20,700 divided into 12 monthly allocations. Each month employers must apply for the number of RCOSs they require. Applications are allocated points for being in a shortage occupation, being a PhD level role or for passing a resident labour market test and for salary, with roles attracting a higher salary being awarded a greater number of points. These applications are ranked according to their score with the minimum score being 21; 20 for passing a resident labour market test plus 1 point for reaching the minimum salary threshold.

In every month from April 2016 to November 2017 inclusive, all applications which achieved a score of 21 points or above were granted an RCOS. Throughout this 20 month period there was a surplus of RCOSs available. Employers could therefore anticipate being able to secure an RCOS for international recruitment with very little difficulty.

What Has Changed?

In December 2017 the full allocation of RCOSs was used and 91 additional RCOSs were taken from the allowance available in January 2018. Given the huge increase in demand, no RCOSs were issued for applications which scored less than 55 points. In real terms, this means that an application which satisfied the resident labour market test would have required a salary of at least £55,000 per annum to secure an RCOS in December 2017.

The unusually high demand for RCOSs has continued into January 2018 and February 2018 with the threshold score for achieving a grant being 46 in both months. Roles which passed a resident labour market test in these months required a salary of at least £50,000 to secure an RCOS.

Why Has This Changed?

Our clients report that they are seeing the impact of Brexit and the devaluation of the pound reduce the availability of a workforce from Europe. It is becoming much harder for employers to recruit into skilled and highly skilled roles as the UK has become a less attractive location for European nationals. Employers are therefore looking to the rest of the world to meet their recruitment needs, particularly into shortage occupations.

How Does This Affect Employers / HR Teams?

Businesses and public sector bodies such as NHS trusts and universities have very real concerns about meeting their workforce demands. At Freeths, we are aware that a number of NHS trusts, universities and businesses operating in key manufacturing and digitech sectors have undertaken an extensive recruitment process, identified suitable candidates for vital, highly skilled roles, only to find that the Home Office has blocked the recruitment process. This comes at a crucial time when many businesses and organisations are planning their recruitment for the coming financial year.

As migration from Europe continues to fall and Brexit looms, the UK government should be focussed on enabling businesses to grow and ensuring that front line public services are adequately staffed.

Emma Brooksbank, a partner in Freeths’ immigration department [add link to profile] comments that “our clients are operating in a particularly complex and competitive recruitment market. Many clients including the universities we act for compete on a global level for international talent. The Home Office must recognise that overseas recruitment is vital for the UK economy. We are calling for an urgent review of the current allocation cap with a view to increasing the numbers of RCOSs available and for shortage occupations, PhD level occupations and certain key sectors, such as education, medical, healthcare and digital, to be taken out of the restricted allocation all together”.

Freeths’ immigration team specialise in Tier 2 recruitment and sponsor licence management.


The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.

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