Urgent Home Office Guidance for Employers Regarding Furloughing Tier 2 Sponsored Workers

The COVID-19 pandemic may have passed its peak in the UK, but many businesses will face financial hardships for months, or perhaps even years to come. For employers considering furloughing Tier 2 sponsored workers, consideration must be given to Home Office rules. Non-compliance could lead to serious consequences for your Sponsor Licence status, business reputation, and migrant workers.

What is the government's furlough scheme?

More than four million UK workers have been furloughed under the British government’s job retention scheme to prevent mass redundancies following the Coronavirus pandemic. This number is expected to reach nine million over the coming weeks.

Chancellor of the Exchequer, Rishi Sunak has said, "I am determined to make sure as many people as possible return to work after this crisis”. Therefore, from 1st March 2020 to at least 1^st June 2020, employers can furlough (temporarily laid off) their workers rather than dismiss them. The British government will pay up to 80 percent of people’s wages, up to a maximum of £2,500 per month. Anyone working in a full-time job (or on a PAYE basis) on 19th March can be furloughed. This includes people on zero-hours contracts and flexible workers.

Furloughing is similar to gardening leave. Your employees are still employed by you but they cannot undertake any work for you.

You can still make an employee redundant after the furlough scheme ends; however, you must comply with statutory redundancy law and the redundancy terms in the worker’s employment contract.

Can I furlough Tier 2 sponsored workers?

Tier 2 sponsored workers can be furloughed under the approved government scheme. HM Revenue and Customs guidance say:

Foreign nationals are eligible to be furloughed. Grants under the scheme are not counted as ‘access to public funds’, and you can furlough employees on all categories of visas.

Under the furlough scheme, as an employer, you can reduce an employee’s salary by 80% or £2,500 per month, whichever is lower. You can choose to top up workers’ salaries so they don’t lose out on any income. If you chose not to do this, you must inform the Home Office of Tier 2 sponsored employee’s salary reduction and keep a record of the situation.

Be aware that the Home Office has stated that any furloughing must be done with the aim of preventing redundancies and be company-wide. You cannot furlough the only Tier 2 Sponsored workers and keep those with Indefinite Leave to Remain or British Citizenship toiling through the pandemic lockdown.

To avoid any suspicion relating to the furloughing of sponsored and non-sponsored workers, it would be wise to document your reasons for each individual worker being furloughed, irrespective of their immigration status. That way, if you receive a Home Office compliance visit in the future, you can quickly demonstrate evidence explaining why certain employees were furloughed and others remained working.

At the end of the furlough scheme, all Tier 2 sponsored workers’ salaries must be returned to the amount stated on their Certificate of Sponsorship.

Can Tier 2 workers undertake training or other employment whilst furloughed?

Tier 2 workers can volunteer whilst on furlough provided, they are not paid for their work (apart from reasonable expenses) or provide services to or generate an income for their employer. Under certain circumstances, undertaking training is also permitted.

Additional work is also permitted by Tier 2 sponsored workers but only if it is in a job featured on the Shortage Occupation List or is the same role at the same level as their existing position. Additionally, the sponsored worker cannot work in their supplementary employment for more than 20 hours per week or outside the hours of work stated on their Certificate of Sponsorship.

What should I do if my sponsored worker’s visa is due to expire?

The government has stated that anyone who is in the UK whose leave to remain expires between 24th January 2020 and 30th May 2020 will have their permission to stay in the UK extended to 31st May 2020 if they cannot leave due to travel restrictions, or are in self-isolation due to Covid-19. Employees will need to fill in an online form. If successful, the reply is:

“Your leave has been extended under existing conditions until 31st May 2020. You will not be regarded as an overstayer or suffer any detriment in any future applications. However, you must make plans to leave as soon as you are able to do so. This will only apply where you hold an existing valid visa which has already expired or is due to do between 24th January and 31st May.”

Employees should not fill in the online form without first obtaining legal advice from experienced immigration solicitors. If the application is refused, it may become an overstayer. In certain circumstances, the extension will not be the right route to take, for example, Tier 2 workers who are waiting for their employers Sponsor Licence to be approved. As there is no Certificate of Sponsorship, the extension cannot be applied. An immigration lawyer will examine the situation and advise you on the best action to take to ensure leave to remain is extended.

Is the government’s job retention scheme simply a “waiting room for redundancies?

Employer groups have advised the government to extend the job retention scheme until at least September to avoid the arrangement becoming a “waiting room for redundancies”.

CIPD Chief Executive, Peter Cheese, commented :

“The Government has worked hard to get the job retention scheme up and running so quickly. However, urgent decisions must now be taken to make it more flexible and to extend it so employers can continue to protect jobs.

“Letting furloughed staff work some hours, where possible, will enable organizations to bring back workers from furlough gradually while rebuilding their business. This will be vital as lockdown measures are eased over a number of weeks or months, and will reduce the risk of large-scale redundancies in this next phase of the crisis.?

“The Government must also consider extending the scheme to at least the end of September. This will provide more certainty for employers and ensure that there is no ‘cliff edge’ exit from furlough straight to redundancy for hundreds of thousands of workers at the end of June.

“The Government has shown its prepared to adapt and improve its rescue packages for businesses and workers as this crisis develops. It needs to do so again here. Equally, businesses must play their part. We need to see employers weigh up the ethical, legal, and financial considerations of using the scheme, to act openly and responsibly to ensure that a more flexible system is not abused and that public money goes to the businesses that need it the most.”?

In summary

Although the British government’s furlough scheme may not prevent future redundancies, it does provide employers with breathing space whilst much of the country is in lockdown. For Tier 2 Sponsor Licence holders, it will be a comfort to know that they can furlough non-EU workers, ensuring they can retain the talent needed to quickly return to operation once lockdown ends.