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Employers’ guide: resident labour market test

UK employers wanting to employ non-EEA nationals on Tier 2 (General) visas need to satisfy the Resident Labour Market Test (RLMT) as part of their recruitment process. If the job isn’t exempt from the RLMT, then an employer risks losing their sponsor licence if they do not comply with Home Office rules on conducting the RLMT before recruiting a non-EEA national worker. Here’s our guide for employers on satisfying the Resident Labour Market Test.

What is the Resident Labour Market Test?

The Resident Labour Market Test (RLMT) is a way of ensuring employers looking to recruit first look to UK-based candidates to fill their job vacancies. The RLMT sees that companies only recruit non-EEA nationals to fill the positions if they are not able to recruit suitable settled workers.

At its simplest, the Resident Labour Market Test is a job advert to make sure vacancies are offered to UK-based workers before overseas recruitment of non-EEA nationals takes place. At its most complex, the RLMT is full of detail and can catch out the unwary employer.

The October 2019 Home Office guidance on sponsor licences and the Resident Labour Market Test can be found here. The Home Office guidance makes it clear that employers can’t just place any job advert and expect to fulfil the RLMT. Strict compliance with the guidance on how to carry out the RLMT is necessary to avoid your sponsor licence being downgraded, suspended or revoked.

Who has to carry out the Resident Labour Market Test?

The Resident Labour Market Test has to be carried out by all UK employers, whether you are a FTSE 100 listed company, a SME, or a start-up. Whatever the size of the employer, if you want to employ a non-EEA national and the worker needs a Tier 2 (General) visa to gain entry clearance into the UK, you will need to carry out the Resident Labour Market Test, unless one of a limited number of exemptions applies.

When does the Resident Labour Market Test apply?

An employer who wants to employ a non-EEA national under a Tier 2 (General) visa has to conduct the RLMT prior to employing the overseas worker unless one of the following exceptions applies:

  • The job role is on the Shortage Occupation List.
  • The job is classed as a high earner job attracting a salary of £159,600 or above.
  • The EEA-national works for the company and is applying to extend their visa. This exemption does not apply if the worker is switching visa category or occupation within the company.
  • The job is a high-value inward investment post.

If an employer fails to carry out a RLMT, putting them in contravention of Home Office guidance, then there are potentially serious consequences for the company. If you are in any doubt about whether a RLMT is required to be carried out, it is best to take legal advice to ensure your company’s compliance isn’t compromised.

The Tier 2 (General) Visa and the points based system – a brief overview

The Tier 2 (General) visa is for applicants from outside the EEA who want entry clearance to take up employment in the UK. To secure a Tier 2 (General) visa an employee will need a UK employer sponsor.

Companies wanting to employ non-EEA national workers will need a Home Office issued sponsor licence and, unless an exemption applies, will need to carry out the Resident Labour Market Test before recruitment takes place. If the RLMT is completed correctly then an employer can apply for a restricted Certificate of Sponsorship for a non-EEA citizen recruit. In the majority of cases, you will need a restricted Certificate of Sponsorship, rather than a non-restricted certificate.

Once you have assigned a restricted Certificate of Sponsorship to the non-EEA job applicant, they can then apply for their Tier 2 (General) visa. Their application for a work visa will be assessed by UK Visas and Immigration using the Home Office points based system. Applications are scored and prioritised based on the ‘job and recruitment’ criteria and the gross annual salary being paid to the non-EEA worker. An application must score a minimum number of points to be valid. The points based system published guidance can be found here.

How to carry out a Resident Labour Market Test

It is crucial that you carry out the Resident Labour Market Test correctly, as failure to do so could result in the suspension or revocation of the company sponsor licence. The Home Office has published detailed guidance on sponsor licence and RLMT duties which you can find here.

To summarise, the RLMT process and the recruitment of a non-EEA national follows these steps:

Step Action
1. Identify the job vacancy and the full job description and other key information about the post.
2. If the job does not fall within the Shortage Occupation List or another exemption to the Resident Labour Market Test then the job must be advertised in at least two places and include prescribed information for a minimum of twenty eight days.
3. Prior to placing the job advert it is crucial that you check that the placing of the job advert and the advert content meets the Home Office Resident Labour Market Test guidelines. If they do not you may need to repeat the advert process.
4. The job must be advertised for at least twenty eight days.
5. After the job application closure date, the job applications received from settled workers must be reviewed to ascertain if any of the settled worker candidates are viewed as ‘suitable settled workers’ and able to fill the advertised role. A record of the adverts and the decision-making process must be kept.
6. If there are no suitable settled worker applicants for the post you can apply to UK Visas and Immigration for a restricted Certificate of Sponsorship using the sponsor licence management system. When allocating a restricted Certificate of Sponsorship, you need to give UK Visas and Immigration full details of how the RLMT was carried out or, if it was not conducted, provide details of the relevant exemption.
7. Once you have received the Certificate of Sponsorship reference number from UK Visas and Immigration you can allocate the Certificate of Sponsorship to your chosen successful non-EEA national job candidate.
8. The non-EEA national recruit then applies for a Tier 2 (General) visa, quoting the reference number on the restricted Certificate of Sponsorship to secure their visa and entry clearance to the UK.
9. The non-EEA national can only take up employment after illegal working and right to work checks have been carried out in accordance with illegal working legislation. For further information see our guidance on right to work checks.

Rules and regulations for the Resident Labour Market Test job advert

The Home Office rules and regulations on the RLMT job advert are precise and must be strictly followed by employers. The advert must:

  • Be advertised in at least two different places
  • Give a closing date for job applications to be submitted. The closing date must be at least twenty eight days after the adverts are published
  • Contain a job title and description, setting out the main job responsibilities
  • Set out the salary on offer (or the salary band if a precise salary has not been set)
  • Specify the location of the job
  • Indicate the qualifications, skills and experience required by the successful job applicant to fill the role.

As well as ensuring that the job is correctly advertised to meet the RLMT it is essential that the employer’s HR department retains:

  • Copies of the two adverts; and
  • Any responses to the job adverts.

This paperwork is required to prove, if required, that you met the RLMT.

Who qualifies as a settled worker in a Resident Labour Market Test?

The RLMT requires an employer to show that there is no ‘settled worker’ available to fill the advertised job. A settled worker is defined as:

  • A UK national; or
  • An EEA national exercising treaty rights to free movement and the right to live and work in the UK; or
  • A citizen of a relevant overseas territory.

Employers should be aware that after Brexit and the end of free movement the definition of settled worker may change.

Who qualifies as a suitable settled worker in a Resident Labour Market Test?

Employers will be relieved to know that if a settled worker applies for the advertised job role they are not bound to offer the job to a settled worker rather than a non-EEA national unless the settled worker is deemed ‘suitable’ for the job role.

A worker is classed as ‘suitable’ if they have the necessary skills and experience to fill the advertised job role. The definition of a suitable settled worker means it is essential that an employer:

  • Carefully prepares the job description and describes the required skills to fill the role.
  • Keeps copies of applications by settled workers so they can explain why the settled worker job applicants were not considered suitable for the role.
  • Understands that if a settled worker has the required skills and qualifications to fill the job vacancy, they must be offered the post in preference to a non-EEA national job applicant who may have more qualifications or practical experience or simply be thought a ‘better fit’ into the existing team than the settled worker job applicant. That is why it is essential that the job role and qualifications and experience required is drafted with care and attention to detail.

How will the Home Office know if there is an incorrect job advert?

The Home Office can find out if the Resident Labour Market Test has not been carried out correctly as you are under an obligation to take a full screenshot of the two relevant job adverts. If one or both of the job adverts are incorrect then the Home Office will discover this when you allocate a Certificate of Sponsorship to the job applicant. When you assign a Certificate of Sponsorship you must give:

  • Full details of the RLMT
  • Date of job adverts
  • Details of where the job was advertised
  • The job advert reference numbers
  • Details of any third party who assisted with the recruitment process

As the Home Office will know if there is an incorrect job advert this will in turn:

  • Delay your recruitment process
  • Place your sponsor licence at risk of suspension or revocation

That is why it is essential that all your HR and recruitment staff fully understand the requirements for a Resident Labour Market Test and the importance of correctly placing the job adverts.

What to do during the Resident Labour Market Test

When conducting the RLMT you must, after carefully assessing the job role and person specification, advertise the post in at least two Home Office approved job adverts locations. Each advert has to run for at least twenty eight days each but they can be placed simultaneously or consecutively, depending on your preferences and the urgency of your recruitment needs.

Employers often worry about where to place their adverts to be RLMT compliant. The Home Office rules say an advert must be placed:

  • On Universal Jobmatch; and
  • In another relevant place such as a national newspaper, career related professional journal or an internet-based job site.

The Home Office gives different guidance on carrying out the RLMT and advertising the post, depending on the size of your company. Given the complexity of the RLMT and the need to keep on top of changes in Immigration Rules, many companies and HR teams find it best to employ a sponsor management service to manage their sponsor licence and to ensure that the in-house recruitment team are fully compliant with the detailed requirements of the RLMT.

Keeping correct records

It is essential that you keep correct records to show that the RLMT was carried out correctly and, just as importantly, that you recruited the right candidate to fill your vacancy.

The Home Office guidance states that the following records should be kept:

  • Screenshots of the two job adverts, converted into PDF documents. It is essential that the dates the adverts were first published on the website are visible as well as the full website URL and the advert details.
  • The number of applicants who were shortlisted for the job together with their names and addresses.
  • Copies of all shortlisted job applicant’s applications to include their CV, completed job application form and covering letter.
  • The notes taken during assessment of shortlisted job applicants.
  • If any settled workers applied for the post, the reasons why they were not assessed as suitable for the post. If there is evidence of unsuitability, such as the failure of a completed competency or aptitude test during the assessment process, this should be retained.
  • The paperwork of the successful job applicant and any documents showing that they met all the advertised job criteria, for example a copy of their degree or a reference detailing their practical experience in a similar role. The contract of employment must be dated after the closure date of the job application.
  • Copies of the successful applicant’s right to work check documents in compliance with the illegal working legislation. It is crucial that right to work checks are completed before the job applicant commences employment and that the records prove that the necessary checks were conducted before the commencement of employment.

What are the timescales for a Resident Labour Market Test?

The timescale for the Resident Labour Market Test is a minimum of twenty eight days for the two job adverts to be listed in relevant sites. However, the reality is that the timescale for completion of the RLMT and recruitment can be considerably longer as:

  • It is crucial to get the job and person specification in the adverts correct. If you do not then you may need to re-advertise and that will extend the recruitment process.
  • Although the two required job adverts can be run simultaneously, there is no requirement to do so and it may not be practicable, for example, if you want to place the second job advert in a specialist journal or with an industry related specialist online recruiter.
  • After the expiry of the closure date for the job application, you will need to review the candidates and offer interviews to settled workers who meet the criteria in the advert. That’s why it’s crucial that the job advert is drafted with care and specifies the exact skills and experience required. You cannot refuse to employ a suitable settled worker if they meet the job specification, just because there is a non-EEA national candidate who has better qualifications or more experience.

The importance of complying with the Resident Labour Market Test

The importance of complying with the RLMT cannot be overstated. In under-resourced teams urgently looking to recruit staff, and thus putting placing pressure on HR staff to recruit quickly, it is all too easy to miss an essential part of the RLMT. For example, the Home Office can say that a RLMT was not carried out in compliance with the Home Office guidelines if something as simple as the website URL address is missing from the screenshot of the PDF job advert. That’s an easy but expensive mistake to make if it places the status of your sponsor licence at risk.

As it is essential that you comply with the detailed rules and regulations on the conduct of the RLMT it can be helpful to:

  • Use synopsis sheets and checklists and diary systems.
  • Carry out mock audits.
  • Invest in ongoing training for HR staff so they are kept up to date with new guidance on sponsor licence duties and the conduct of the RLMT.
  • If in doubt about your compliance with the RLMT and your sponsor licence duties, take legal advice before any Home Office audit so you can address any concerns, for example by the use of a sponsor licence management company or additional training for your level one and level two sponsor licence users.

What happens if you fail a Resident Labour Market Test?

Failure to comply with the Resident Labour Market Test rules can have serious consequences for your sponsor licence. The sponsor licence could be suspended or even revoked by UK Visas and Immigration, thus affecting your ability to recruit migrant workers and potentially adversely affecting turnover and profit margins. If you are worried about your sponsor licence, read our employers’ guide to a sponsor licence.

Resident Labour Market Test validity – how long is it valid for?

If you correctly complete the Resident Labour Market Test so that you can move forward with your recruitment plans, and you are not able to recruit a suitable settled worker who has the skills and experience for the job role, then you can apply under the terms of your sponsor licence for a restricted Certificate of Sponsorship to enable you to recruit a non-EEA citizen to fill the advertised job vacancy. However, you cannot put your plans on hold, as Home Office rules say that if the restricted Certificate of Sponsorship isn’t allocated to a specific non-EEA recruit within three months it is deemed to lapse. You then have to start the recruitment process again, including conducting a new Resident Labour Market Test.


What next?

If you are an employer and need advice on the Resident Labour Market Test or if you are worried about the impact of failure to fully comply with the RLMT on your sponsor licence, our business immigration law solicitors can help. Call us on or fill out the short form.

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