Tier 2 (General) – Restricted Certificates of Sponsorship

An Unprecedented Four Months of Exceeding the Quota

In March 2018, demand for Restricted Certificates of Sponsorship (“RCoS”) again exceeded the number available in the quota for an unprecedented fourth month in a row. With only 1,414 CoSs available, a large number of RCoS applications from licenced sponsors were refused despite meeting all of the attributes for a valid Tier 2 CoS.

In order to be successful in March 2018, RCoS applications needed to score a minimum of 56 points, meaning all RCoS requests for salaries below £60,000 per annum were rejected. A total of 1,347 RCoSs were granted in March 2018, a significant drop from February (1,707) and January (1,536).

What is the Quota?

As part of the drive to reduce net migration and to limit demand for sponsored workers from outside the resident labour market, the UK Government imposes an annual quota of 20,700 RCoSs available to assign under Tier 2 (General) across all sponsor licences.  The year for the purposes of RCoS allocations runs for 12 months from 5th April.

The annual allocation of 20,700 is released in batches each month in order to spread availability across the year.  This equates to an average of 1,725 RCoSs per month. As demand is generally higher earlier on in the sponsorship year, more RCoSs are available in the early months.  Typically, 2,200 are made available in April and 2000 each month thereafter until October when the number drops to around 1500. The Home Office has not published any changes to the annual quota or its monthly division.

In months where supply exceeds demand, the remaining available RCoSs are carried over to the following month, resulting in a higher number being available than the official quota for that month. In addition, RCoSs that have been approved but remain unused after 3 months are reclaimed and become available the following month, further increasing the available RCoSs.  Consequently, the precise number of RCoSs available each month will vary according to demand and allocation over the year.

In March 2018, the month started with just 925 available CoSs, increasing to 1,126 as 201 CoSs were carried over from February 2018. Additional CoSs were available as 303 unused CoSs were reclaimed and 15 returned. After further deductions for CoSs granted to Croatian nationals and those granted by exceptional consideration outside the monthly allocation process, the total number of available RCoSs was 1,414.

Which Tier 2 cases are exempt from the monthly Quota?

The RCoS scheme only applies to sponsored workers entering the UK from overseas on a “new hire” basis.  The following categories of workers under Tier 2 are exempt from the RCoS arrangements:-

  • Intra Company Transferees;
  • Sponsored workers already in the UK under Tier 2 and applying for an extension or change of employer;
  • Those who will be paid a salary in excess of a higher earner threshold (currently set at £159,600);
  • Individuals currently in the UK in another immigration category who are able to switch into Tier 2 (General) status from within the country (except Tier 4 (General) dependants).

How are RCoSs allocated?

If demand exceeds supply, RCoSs are allocated on the basis of a points scoring matrix.  A higher number of points will be awarded to jobs in the following sub-categories:

  • shortage occupation jobs;
  • PHD level jobs;
  • “new graduate” jobs or internships which meet the relevant provisions in the Immigration Rules;
  • jobs which are defined as key “public service occupations”.

Jobs not in any of the above categories will be awarded points based on the salary offered, with the highest salaries achieving the greater number of points, based on salary bands. Each salary band must be approved in its entirety, meaning the number of RCoSs available needs to be enough to cover the number of eligible RCoS applications within each salary band. If there are not enough RCoSs available to approve the salary band, the entire band is rejected.

This means that in most cases where demand exceeds supply, eligibility will be based on how much the sponsor is prepared to pay the worker.  When the quota was reached in June 2015, the minimum salary required to meet the point threshold was £46,000. When the quota was next reached, some 2 years later in December 2017, the minimum salary required was £55,000 and in January and February 2018 at least £50,000 per annum was required.

Reaching the monthly quota is therefore likely to have a greater impact on sponsored workers in lower paid jobs such as some IT roles and teaching. There have been numerous reports of the negative impact on the ability of the NHS to recruit much needed GPs and nurses.

What happens next?

A new RCoS year opens in April (the deadline for RCoS submission is Thursday 5th April 2018) and Home Office decisions will be communicated from 11th April 2018 onwards (although, for the past four months, decisions have been sent out much later than usual with some decisions not being received until 17th or 18th of the month). This should be considered when individuals have visas expiring or with upcoming travel plans as it could result in delays to the submission of the leave to remain application.

For any RCoS applications rejected over the past few months, as a result of the salary offered being below the minimum required by the quota, a fresh RCoS application must be made and all of the usual criteria must be met including valid external advertising (which must have started no earlier than 6 months prior to the CoS being assigned). Salary offers must be within the range stated in the advert.

We will know in mid-April the severity of the impact of the past four months. Even with a new allocation year starting and a higher number of CoSs available (expected to be 2,500), the high number of RCoS rejections is likely to result in higher numbers of RCoS applications in the lower salary bands. Consequently, the quota may again be reached and this will set the tone for the following 12 months.

Affected employers should take prudent steps at an early stage by considering whether the role is eligible for additional points in the sub-categories outlined above or by increasing salary offers (within any salary bands set out in external adverts) in order to have a greater chance of success.

How we can help

Please do not hesitate to contact your Magrath Sheldrick representative or write to Immigration@magrath.co.uk for guidance in respect of any aspect of the Tier 2 sponsorship schemes and the UK Immigration Rules generally.