The impact of the flexible furlough scheme on sponsored migrant workers
19 June 2020 | Applicable law: England and Wales
The upcoming changes to the CJRS on 1 July 2020, allowing furloughed employees to work part-time, will not be limited to British and EU staff. UK businesses who hold a sponsor licence to employ migrant workers will also be permitted to furlough sponsored migrants on a part-time basis.
Furloughed employees are currently not allowed to undertake any work for their employers, except for training or voluntary work in limited circumstances. From 1 July, this complete ban on working will be scrapped, giving employers the benefit of both being able to claim Government funding for staff wages and having their furloughed employees back at work, even if only on a part-time basis.
UK sponsors should take a precautionary approach to furloughing their migrant workers, whether that be a complete furloughing under the CJRS as it stands or a flexible furloughing arrangement under the CJRS from 1 July. Furloughing sponsored workers must be part of a company-wide policy to prevent redundancies, and there must not be unequal treatment of sponsored and non-sponsored workers.
Furloughed sponsored workers can still choose to augment their reduced income through means of supplementary employment, however this is only allowed for a 'shortage occupation' role, or where the sponsored worker takes on an identical role on the same level as their sponsored role. The additional employment must adhere to the conditions of a sponsored worker's visa, meaning it must not exceed their prescribed maximum hours per week and must not take place within the hours stated on their Certificate of Sponsorship (COS).
Once the CJRS is no longer in operation, the salary of furloughed sponsored workers must return to at least what they were previously paid before they were furloughed.
Furloughing sponsored workers may jeopardise a sponsor's compliance with their duties as furloughed workers would be paid only a percentage of their wages, which does not currently fall within the remit of the Home Office's amnesty permitting a worker to remain sponsored even if they exceed the prescribed amount of unpaid leave (4 weeks per year).
The normal salary requirements and other sponsor duties still apply during the furlough period, unless the Home Office announces another concession relating to this:
- Sponsored workers must still be paid according to the details in their CoS provided no changes have been reported on the Sponsorship Management System (SMS);
- Sponsors are still required to report any drop in a sponsored worker's salary within 10 working days of the change taking place;
- Sponsorship of a worker will still have to be withdrawn if a reduction in salary results in their salary falling below the salary threshold required for their role; and
- Sponsors, if they so choose, are still entitled to defer a sponsored worker's salary so long as the change is reported accordingly on the SMS and a record of the deferral is made in the company's appropriate records.
Until the Home Office publishes further guidance specifying the impact on the immigration status of a sponsored worker who is furloughed, we advise reporting the furloughing of a sponsored employee to the SMS as a change in migrant circumstances, and also recording this change in the appropriate HR records for possible future audits.
Terminating employment / redundancy
If in the unfortunate circumstances where the financial consequences of COVID-19 put a sponsor in a position where termination of employment / redundancy is the only available option, the sponsor will have to report the termination / redundancy on the SMS no later than 10 working days from the last day of the sponsored worker's employment.
The rights of EU migrants living and working in the UK has not changed and will not change until 31 December 2020, when the Brexit withdrawal transition period ends.
Being furloughed does not currently impact an EU migrant worker's right to reside in the UK, and should not affect their right to apply for status under the EU Settlement Scheme.
If you need further explanation or help with any of the above, please speak to a member of our immigration team.