Tier 2 (General) – Restricted Certificates of Sponsorship – Demand Exceeds Supply in December 2017

In December 2017, for the first time in over 2 years, demand for Restricted Certificates of Sponsorship (“RCoS”) exceeded the number available from the monthly quota.

As a consequence, a significant number of RCoS applications from licenced sponsors were refused.

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 Government imposes an annual quota of 20,700 RCoS available to assign under Tier 2 (General) across all sponsor licences.  The year for the purposes of RCoS allocations runs for 12 months from the 5th of 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 RCoS per month. As demand is generally higher earlier on in the sponsorship year, more RCoS 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.  In months where supply exceeds demand, the remaining available RCoS rollover to the following month thereby increasing availability in that month.  In addition, RCoS that have been approved but remain unused are returned to the quota.  Consequently, the precise number of RCoS available each month will vary according to demand and allocation over the year.

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).

How are RCoS allocated?

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

* Jobs on the shortage occupation list.

* Jobs in occupation codes which are at PHD level.

* Jobs which meet provisions in the Immigration rules for “new graduate” jobs or internships.

* Jobs which are defined as key “public service occupations”.

* According to salary with the highest salaries achieving the greater number of points based on salary bands.

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 cap was last reached in June 2015, the minimum salary required to meet the point threshold was £46,000.

Reaching the cap is therefore likely to have a greater impact on sponsored workers in lower paid jobs such as some IT roles and teaching.

What happens next?

A new RCoS month opens in January and applications must be submitted by the 5th day of the month in order to be considered by the 11th.  A fresh RCoS application must be made and all of the usual criteria must be met including valid external advertising. Salary offers must be within the range stated in the advert.

We will know shortly after the 11th of January whether the available allocation has again been exceeded.  Affected employers should consider whether the role is eligible for additional points in the sub-categories outlined above.  Alternatively, employers may consider increasing salary offers, within any salary bands set out in external adverts, in order to have a greater chance of success.

It seems very likely that availability of RCoS will be limited until the new sponsorship year starts in April.

How we can help

Please do not hesitate your Magrath Sheldrick representative or write to [email protected] for guidance in respect of any aspect of the Tier 2 sponsorship schemes and the UK Immigration Rules generally.