EUROPEAN COMMISSION

Brussels, 27.4.2022

SWD(2022) 656 final

COMMISSION STAFF WORKING DOCUMENT

IMPACT ASSESSMENT REPORT

Accompanying the document

Proposal for a Directive of the European Parliament and of the Council

on a single application procedure for a single permit for third-country nationals to reside and work in the territory of a Member State and on a common set of rights for third-country workers legally residing in a Member State (recast)

{COM(2022) 655 final} - {SEC(2022) 201 final} - {SWD(2022) 655 final}

Table of contents

1.Introduction: Political and legal context

2.Problem definition

2.1.What are the problems?

2.2.How will the problem evolve?

3.Why should the EU act?

3.1.Legal basis

3.2.Subsidiarity: Necessity of EU action

3.3.Subsidiarity: Added value of EU action

4.Objectives: What is to be achieved?

4.1.General objectives

4.2.Specific objectives

5.What are the available policy options?

5.1.What is the baseline from which options are assessed?

5.2.Description of the policy options

5.3.Options discarded at an early stage

6.What are the impacts of the policy options?

6.1.Option 1: Non-legislative option – actions to enhance complementary and supporting activities

6.2.Option 2: Basic legislative intervention

6.3.Option 3: Extensive legislative intervention – Option 2 + introducing admission conditions for low- and medium-skilled workers

7.How do the options compare?

8.Preferred option

8.1.REFIT (simplification and improved efficiency)

9.How will actual impacts be monitored and evaluated?

Annex 1: Procedural information

Annex 2: Stakeholder consultation

Annex 3: Who is affected and how?

Annex 4: Analytical methods

Annex 5: Assessment of the Policy Measures

Annex 6: Executive Summary of the Fitness Check

Glossary

1.1.    Introduction: Political and legal context

During the last 20 years, the EU has adopted seven directives laying down common rules for the admission, and the rights, of third-county nationals in the EU for purposes of study and research 1 , seasonal work 2 , highly skilled work 3 , intra-corporate transfers 4 family reunification 5 , and concerning the status of third-country nationals who are long-term residents 6 . This legislative framework has contributed to developing safe legal pathways to the EU. The vast majority of migrants arrive in Europe legally. In 2019, the EU Member States issued more than 3 million first residence permits to third country nationals (hereinafter ‘TCNs’), of which over 1 million were for employment purposes. In the last decade, third-country workers filled a significant share of new jobs 7 , helping to meet labour market needs. During the COVID-19 pandemic, the contribution of TCNs to the European economies, labour markets and public services has become all the more evident. For instance, 13% of key workers performing essential functions – from doctors to nurses and drivers – are migrants 8 .

As part of the EU framework for legal migration, Directive 2011/98/EU on a single application procedure for a single permit for TCNs to reside and work in the territory of a Member State and on a common set of rights for third-country workers legally residing in a Member State 9 – hereinafter 'the Directive' – was adopted on 13 December 2011. Ireland and Denmark are not taking part in the implementation of the Directive.

The Directive establishes a single application procedure – this means that an eligible TCN does not need to apply for a work permit and a residence permit, but can obtain them combined through the same procedure. It also guarantees a common set of rights for eligible TCNs, based on equal treatment with nationals of the Member State that grants the single permit. As an ‘umbrella’ Directive, it is therefore a key instrument in EU immigration policy.

The following categories of TCNs are eligible to obtain a single permit:

·TCNs who apply to reside in a Member State to work

·TCNs who have already been admitted to a Member State for the purpose of work

·TCN who have already been admitted to a Member State for purposes other than work but who are allowed to work

The Directive nevertheless contains notable exceptions 10 .

In 2019 11 , 2 984 261 single permit decisions 12 were reported for the Directive, of which 1 212 952 decisions were for issuing first permits. The other decisions were for renewing or changing permits. Of all the permits issued in 2019, 1 172 028 (39 %) were issued for ‘remunerated activities’, 928 483 (31 %) for family reasons, 395 428 (13 %) for education and 368 509 (12 %) for other reasons based on available statistics 13 .

Figure 1.First permits issued for remunerated activities by reason, length of validity and citizenship

Source: Eurostat [migr_resocc]

During the 10 years of application of the Directive, the Commission has received 12 complaints on the implementation of the Directive by the Member States (including i.a. on the issue of not respecting statutory deadlines for issuing a single permit or social security-related issues), followed up by 6 EU Pilots and 4 infringement proceedings 14 . Two of the infringement proceedings (which dealt with disproportional fees and family benefits) have been now closed. The two pending proceedings cover mainly the area of social security and in particular access to family benefits. With regard to the EU Pilots, some of the issues raised have been solved following the agreement of the concerned Member States to adapt their legislation notably in the areas of recognition of titles, access to good and services and not respecting of deadlines. The issues that remain open relate to access to some social security benefits and not respecting statutory deadlines.

The Fitness Check on legal migration adopted in 2019 15 launched an in-depth evaluation with the view to assessing whether the EU legal migration framework is still fit for purpose, identifying any inconsistencies and gaps and looking for possible ways to streamline and simplify the existing rules. The evaluation of the Directive under the Fitness Check and the work performed in preparation of the implementation report 16 , also adopted in 2019, identified a number of personal and material gaps, inconsistencies and shortcomings as well as practical issues arising from the application of the Directive by the Member States. These included:

·Complexity and inconsistencies relating to the single application procedure, mainly as regards the participation of different authorities in the application process, which sometimes adds several administrative steps to the process of obtaining entry visas and labour market-related authorisations;

·Problems with the transposition of the equal treatment provisions, including the exclusion of some categories of TCNs and lack of coverage of some social security branches; and

·Issues with the practical application of procedural safeguards.

The Fitness Check, in particular, recommended in its conclusions ‘considering putting forward legislative measures to tackle the inconsistencies, gaps and other shortcomings identified, so as to simplify, streamline, complete and generally improve EU legislation’.

On the other hand, the Fitness Check also confirmed the numerous benefits of harmonisation in the field of legal migration. In particular, Member States clearly stressed the EU added-value of the Single Permit Directive. Harmonised and simplified procedures and a common set of rights, increased legal certainty and predictability for third-country nationals and employers were among the areas in which EU action was considered to have brought the most positive effects and the most EU added value. The Communication of the Commission on a New Pact on Migration and Asylum 17 , adopted on 23 September 2020, stressed that “the EU’s common migration policy needs to reflect the integration of the EU economy and the interdependence of Member States’ labour markets. This is why EU policies need to foster a level playing field between national labour markets as migration destinations. They should also help Member States use their membership of the EU as an asset in attracting talent.” The New Pact also sets out that: “More could be done to increase the impact of the EU legal migration framework on Europe’s demographic and migration challenges. There are a number of inherent shortcomings in the EU legal migration system (such as fragmentation, limited coverage of EU rules, inconsistencies between different Directives, and complex procedures) that could be addressed through measures ranging from better enforcement to new legislation”.

Consequently, the New Pact announced a plan to address the main shortcomings in the area of legal migration with three new sets of measures, responding to the overall objectives of attracting the talent the EU needs and facilitating intra-EU mobility of third-country workers already in the EU. The review of the Single Permit Directive is part of these measures, with the objective – as set out in the New Pact – ‘to look at ways to simplify and clarify the scope of the legislation, including admission and residence conditions for low and medium skilled workers’. The other two measures announced are the revision of the Directive on long-term residents 18 , which is currently under-used and does not provide an effective right to intra-EU mobility, and exploring the feasibility of developing an EU Talent Pool for third-country skilled workers which could operate as an EU-wide platform for international recruitment. The revision of the Single Permit Directive and of the Long-Term Residents Directive has been included in Annex II of the 2021 Commission work programme 19 .

This initiative was also included in Annex II of the 2021 Commission work programme , therefore it is part of the regulatory fitness programme (REFIT). The Fit for Future Platform also issued its opinion on how to simplify and reduce unnecessary burdens, including by modernising existing EU legislation through digitalisation, which is reflected in the proposal. The opinion was adopted on 10 December 2021. The Platform made the following two recommendations:

Suggestion 1: Streamline and digitalise the single permit application and visa applications to reduce the administrative burden and costs on applicants and on authorities.

Suggestion 2: Simplifying procedures on change of employer and increasing ownership of workers will provide concrete benefits to national administrations and applicants.

The two legislative initiatives, the revision of the Long-term residents Directive and the revision of the Single Permit Directive, are complementary as they address two different phases of the overall migration process: the latter aims at simplifying the first admission of third-country workers in the EU, and improving their rights, while the former aims at facilitating the acquisition of long-term resident status for those third-country nationals (including workers) who have settled down in the EU, as well as further improving their rights.

The European Parliament, in its Resolution of 21 May 2021 on new avenues for legal labour migration 20 , welcomed the Commission’s planned review of the Single Permit Directive, suggesting that ‘to reach a broader category of workers, the scope and the application of the directive should be expanded’.

The revision of the Single Permit Directive would contribute to better achieving the Directive’s already existing objective of establishing a more level playing field for efficient management of migration flows by ensuring simplified and efficient procedures and addressing identified shortcomings that cannot be addressed by non-legislative measures. This would also contribute to the fairer treatment of the third country nationals and have a positive, though relatively modest, impact on addressing the EU labour shortages and economic growth.

2.2.    Problem definition

2.1.2.1.    What are the problems?

The evaluation of the implementation of the current Directive, the Fitness Check and the consultation process carried out for this impact assessment have revealed a number of gaps, inconsistencies and shortcomings.

The key identified problems can be grouped in three areas:

1)complex and inefficient application procedures and unclear rights which decrease EU attractiveness for third country nationals;

2)certain categories of migrants are not covered by the scope of the Directive or any other EU legal instruments; there are differing rules on admission conditions for low- and medium-skilled;

3)third-country workers are not sufficiently protected from exploitation.

The above-mentioned evaluation and consultation process showed that migrants already residing in, or considering moving to, the EU are negatively affected by the shortcomings of the current Directive, which result in administrative burden, lengthy waiting times, uncertainty and confusion as to applicable rules and outcomes, or may even discourage them from applying 21 . Diverse sets of rights and complex procedures resulting from a fragmented implementation of the Directive hamper the EU’s attractiveness in their eyes, as well as their integration in the host societies. 

EU employers, including large companies, are negatively affected by the identified shortcomings of the Directive, in particular by the complex and inefficient application procedures, which often deter employers from resorting to international recruitment due to the risk of prolonged procedures and high related costs. This is particularly true for start-ups and small and medium enterprises (SMEs) which are likely to bear a disproportionate burden when hiring TCNs in comparison to large enterprises due to more limited resources (e.g. legal fees, understanding of immigration law and process, etc.) 22 . Even in the face of skills shortages which cannot be filled locally, employers rarely resort to international recruitment as the long procedures to obtain the necessary visas, employment authorisations and the single permit are deterrents for international recruitment 23 .

EU citizens are also indirectly negatively affected as the EU’s labour migration system insufficiently contributes to tackling skills shortages 24 , shrinking work population and increasing old-age dependency ratio 25 . This can affect the financial viability of the Member States’ welfare systems and the overall EU economic growth.

The main driver for these problems is a regulatory failure, i.e. weaknesses of the current overall EU regulatory framework on issuing single permits to TCNs. Many provisions of the Directive give a large margin of discretion to the Member States for their implementation, allowing for inconsistent rules, more or less favourable to third-country workers. This weakens harmonisation of the rules at the EU level. There are also inconsistencies between the Single Permit Directive and other legal migration Directives adopted later, particularly as regards the definition of the categories of migrants excluded from its scope.

The following table presents the main problems and underlying drivers.

2.1.1. Problem area 1: Complex and inefficient application procedures and unclear rights decrease EU attractiveness for third country nationals

Individual decisions to migrate are determined by many factors, some of which are out of the influence of the immigration policy. However, the role of an efficient labour migration system is essentially to eliminate barriers and facilitate admission while assuring a focused selection, as well as to increase the appeal of a given destination by granting an attractive package of rights and benefits which also facilitates integration. Complex, inconsistent and sometimes inefficient procedures can act as a deterrent to legal migration which is becoming increasingly crucial to filling existing and emerging skills shortages 26 .

Sub-problem 1.1: Procedures are complex and sometimes inefficient

The provisions related to the single application procedure were meant to contribute to achieving the overall objective of the EU legal framework of establishing a level playing field for management of migration (comparable procedures across the Member States) and to ensuring simplified and efficient procedures ('one-stop-shop', fixed deadlines, transparency). This also contributes to the fair treatment of the third country nationals.

Prior to the adoption of the Single Permit Directive, a number of Member States had already a range of relevant legal instruments and domestic procedures applicable to the admission of third country nationals for the purpose of paid employment. Out of 21 Member States for which information was available, 10 countries already had in place some form of a single application procedure for a joint resident and work permit. However, the other 11 Member States had two separate authorisations and procedures in place for work and residence permits. Thus, the Directive introduced an important simplification of procedures for third-country nationals that was not in place in most of the Member States.

As stated above, during the Fitness Check, Member States clearly stressed the EU added-value of harmonised rules under the Single Permit Directive. However, the ten-year experience with the Directive, supported by the conclusions of the 2019 Fitness Check on legal migration, calls for a review of some of the provisions. The evaluation of the Directive under the Fitness Check and the work performed in preparation of the implementation report, showed that in practice the procedures remain often complex, sometimes inefficient and differ between Member States resulting in a degree of confusion about the steps to follow and some of the rights granted to TCNs under the Directive.

The main identified problems are the following:

a)Inefficient rules on the place of application for a single permit

The Directive leaves up to the Member States to decide where applicants can lodge an application whether in their country of origin or once they arrive to the Member State. Only in three Member States is it possible to lodge any application and receive a permit while residing in a third country 27 . It also emerged from the consultations 28 that in some Member States TCNs already staying legally in a Member State could not apply for a single permit in the Member State where they were residing. This means that TCNs already staying in the EU may be forced to travel back to their country of origin first. An example provided was the case of students who had to return to their country of origin after finishing studies in the EU to apply for a new visa/permit allowing them to work.

b)Initial entry visa procedures create administrative inefficiencies and can prolong the overall single permit procedure

In cases where the application can only be lodged in the territory of a Member State, applicants have to obtain an entry visa. Once in the Member State, the TCN can apply for the single permit. What is considered a visa for initial entry is not defined in the Directive. In some cases, Member States issue short-stay visas for that purpose, in others a long-stay visas. Visa procedures are outside the scope of the Directive and the deadline for issuing decisions on the single permit does not take account of the time needed to obtain a visa. The practical application study of the Fitness Check 29 shows that the time required to apply for a visa sometimes extends considerably the overall procedure, in some cases by as much as three months 30 . Moreover, complaints showed that a TCN can be denied admission because the entry visa is rejected or delayed, even though the substantive conditions for issuing a permit had in principle been fulfilled 31 .

Eight Member States do not foresee any particular timeframe for the granting of an entry visa if the applicant does not yet hold a valid permit before entering the Member State 32 . Furthermore, some Member States require the documentation to obtain a single permit to be submitted and assessed twice, at the time of the entry visa application and for the application for the actual single permit, once the TCN is in the territory of the Member State concerned. This creates administrative burden for both the applicant and the employer, as well as for the authority handling the application. It can also result in unnecessarily prolonged procedures. There is a need for clear provisions that ensure coordination between the two processes, so as to provide for fair and transparent procedures.

Representatives of the Civil Society also confirmed the need to ensure a reasonable and uniform application processing period while avoiding duplication of efforts from both the migrants' and employers’ perspective, and that of the national authorities 33 .

Moreover, from the migrants’ perspective, transparency, a timely application process and smooth administrative requirements would constitute real attraction factors. Participants of the consultations representing migrants emphasised the need for digitalising the application process to simplify the procedures, improve coordination between the authorities, and avoid duplications in the requested documents and unnecessarily long procedures  34 .

Finally, the opinion of the Fit for Future Platform highlighted that lack of coordination between different administrations, inefficiencies between national visa and single permit and national requirements create duplications and lengthy procedures. The opinion quoted evidence that suggests that few Member States issue electronic permits or procedures for obtaining a physical permit after the authorities have already taken a positive decision and after the arrival to the Member State on a visa, which can take months in some cases. In some Member States, a substantive check of underlying documents takes place twice, while other Member States suggest that there are no indications of duplication in the administrative checks and in the investigations of the diplomatic representations, which receive the authorization directly from the “single access points for immigration” at the prefectures to issue entry visas.

A large number of documents for issuing residence and work permits, which are requested from applicants could be acquired ex officio, except documents which are not issued by public authorities (travel documents, evidence of qualification/professional qualifications, proof that they have not been convicted in their country of origin, etc.). Information concerning the documentation and procedure for issuing residence and work permits is not easy to retrieve and is difficult to interpret. Traditional paper submissions of applications lengthens the processing and increases costs linked to applications.

c)Rules on labour market tests vary among Member States and excessively prolong the process for a TCN to get the single permit

The Directive sets out a four-month deadline for the adoption of a decision on the single permit application. However, some Member States carry out labour market tests first. Labour market tests are a mechanism that aims at ensuring that migrant workers are only admitted after employers have unsuccessfully searched for national workers, EU citizens or legally residing TCNs with access to the labour market 35 . Member States are allowed to establish such tests to determine the number of TCNs entering their territory for work purposes.

These tests are not harmonised at EU level, therefore employers and TCNs face a variety of differing national procedures. Some Member States oblige the employer or the TCN to obtain an employment clearance before lodging an application for a single permit, while others 36 – before the TCN can apply for a visa. In other Member States 37 , the employer is required to publish the vacancy for a specific period of time (e.g. a month) locally before offering the position to a TCN. Labour market tests last generally between 15 days and one month, however in one Member State the average time in 2018 exceeded two months 38 . This can prolong the overall procedure even up to six months. As confirmed by representatives of migrants and the civil society 39 , such a long waiting time discourages many potential employers thus limiting the chances of TCNs, especially less-skilled migrants, to get employed and affecting people’s mobility in the labour market.

Similar concerns emerged from the Fitness Check public consultation. Employers, non-EU service providers and private recruitment agencies, when asked to identify the problems encountered when employing or transferring non-EU staff, highlighted among others the strict labour market tests imposed by national authorities 40 . Moreover, almost half of the TCN respondents agreed that the current conditions to enter, live and work in EU countries were an obstacle for them when migrating to the EU, referring in particular to the lengthy and cumbersome application procedures and the labour market test 41 . In addition, the opinion of the Fit for Future platform highlighted that a number of Member States have put in place additional administrative procedures (e.g. ‘labour market authorisations’ or obligations to register with local, tax and social security authorities) that can further undermine the simplification objective.

d)Applicants and general public are insufficiently informed of rights and procedures

The Fitness Check and the Implementation Report highlighted a need to further improve the information that Member States have to make available, as well as the requirements for the presentation of the information, in terms of language availability, explanations of the administrative process and documentary requirements As stated in the Implementation Report, some Member States do not even clearly set out an obligation for the competent authorities to provide adequate information on the documents required to make a complete application 42 .

Consultations also brought to light strong concerns of some stakeholders representing migrants as to the availability of information about the existence, procedures and benefits of the single permit as well as the need to ensure that TCNs receive clearer information regarding the requirements, rights, and duties stemming from the Directive. Consulates are often unaware of the procedures included in the Directive and are not properly trained to provide potential applicants with this key information 43 . All this results in increased vulnerability of migrants to exploitation, higher proportion of erroneous applications and the need for applicants to resort to services of intermediaries, in particular in cases where the application can only be done in the country of origin. Also the opinion of the Fit for Future Platform highlighted the need to inform third-country nationals about the conditions of regulating their stay and about their rights, as well as to inform the employers about the conditions of employment and work for third-country nationals through professional associations.

Lack of transparency and efficiency has also been highlighted in academic literature, underlining the need for Member States to always have information available online in at least English or another commonly used language 44 .

Sub-problem 1.2: Insufficient clarity of certain provisions on equal treatment rights

One of the main objectives of the EU legal migration framework is to ensure that TCNs subject to the EU acquis are treated fairly and fully integrated in the society of the host Member State.

Under the terms of Article 12 of the Directive, single permit holders enjoy equal treatment with nationals in a number of areas, including working conditions, freedom of association, social security benefits, education, recognition of academic and professional qualifications, tax benefits, access to goods and services and employment advice services. Pursuant to Article 12(2), Member States have the option to restrict equal treatment. Most Member States have not applied all the options, only Cyprus has chosen to adopt all optional restrictions, whereas some (BG, CZ, ES, HR, LU, RO and SK) did not apply any of the options.

The reference to equal treatment with regard to “procedures for obtaining housing as provided by national law, without prejudice to the freedom of contract…” and its relation to the exemption of Article 12(2)(d)(ii) (allowing Member States to restrict access to housing) is unclear, in particular as to whether it includes access to private housing. The Commission has received a number of complaints related to national legislation not allowing TCNs to purchase private property.

In addition, Article 12(1)(e) provides for equal treatment with regard to “branches of social security, as defined in Regulation (EC) No 883/2004”. These branches include also family benefits, with regard to which problems have arisen where a family member of the single permit holder continued to reside in the country of origin. Recital 24 of the Directive contributes to the confusion by stating that the Directive “(…) should not grant rights in relation to situations which lie outside the scope of Union law, such as in relation to family members residing in a third country. This Directive should grant rights only in relation to family members who join third-country workers to reside in a Member State on the basis of family reunification or family members who already reside legally in that Member State”.

In a recent judgment referring to Italian legislation 45 , the European Court of Justice found that a provision excluding children residing outside the EU from the calculation of family benefits is not compatible with EU law if family members of the citizens of the Member State concerned living abroad are taken into account for this purpose 46 .

The Court concluded that “it cannot be inferred from [recital 24] that Directive 2011/98 must be interpreted as meaning that the holder of a single permit whose family members reside not in the territory of the Member State concerned, but in a third country is excluded from the right to equal treatment provided for by that directive” 47 .

Also with regard to family benefits, the Directive allows Member States to exclude from family benefits TCNs who are allowed to work on the basis of a visa. Some Member States issue long-stay visas that allow the holder to work before obtaining the single permit. In these cases, the duration of the visa can be longer than 6 months, leaving the TCN without access to family benefits merely on the basis of the type of permit issued.

Lack of clarity concerning equal treatment rights combined with insufficient information on procedures and rights, as highlighted above, can lead to confusion for potential applicants that can negatively affect the attractiveness of the EU or TCNs’ integration in the host society.

Drivers

The main driver for this set of problems is a regulatory failure, as the existence of numerous optional clauses in the Directive and wide discretion left to the Member States has led to a very complex landscape in the way national migration authorities implement the single application procedure, inefficiencies and lack of clarity on the equal treatment rights. The differences in the implementation by Member States of the Single Permit Directive are due mainly to the 'optional clauses' that the Directive authorises as a result of a compromise achieved by co-legislators. Divergences also result from different interpretation and bad application of some provisions. This leads to fragmentation that many stakeholders identified as negatively affecting simplification and transparency. This is confusing for the prospective employers or TCN applicants and decreases attractiveness of the EU. In particular:

a)Article 4(1) obliges Member States to allow the application to be introduced by TCNs from a third country or, if so provided for by national law, in the territory of the Member State in which the TCN is legally present. Where the application can only be lodged from abroad, the TCNs may have to travel back to their country of origin first.

b)According to Article 4(3) the single application procedure is without prejudice to the visa procedures that may be required for initial entry. Where applications can only be lodged in the destination Member States, the procedure to first obtain an entry visa can significantly extend the duration of the overall procedure;

c)Article 1(2) of the Directive states that its provisions are “without prejudice to the Member States’ powers concerning the admission of TCNs to their labour markets”. During the consultations, stakeholders representing legal migration practitioners and economic and social partners referred several times to the impact of labour market tests on the duration of the procedures and the role they play in discouraging international recruitment 48 ;

d)Article 9 obliges Member States to provide, upon request, adequate information to the third country national and the future employer on the documents required to make a complete application. However, it does not specify any minimum requirements in this regard. The wording of Article 14 is very general and only requires that Member States make available to the general public a regularly updated set of information concerning the conditions of admission and residence in their territory in order to work. 

e)In relation to equal treatment rights, regulatory failure takes the form of a lack of clarity with respect mainly to access to family benefits and housing and the exclusions of specific categories of third-country workers, which may lead to incorrect implementation and ambiguity.

Problem area 2: Certain categories of migrants are not covered by the scope of the Directive or by any other EU legal instruments and there are differing rules on admission conditions for low- and medium- skilled TCNs

Sub problem 2.1: The Directive is not clearly aligned with other EU instruments covering some categories of TCNs

The personal scope of the Directive, laid down in Article 3, excludes seasonal workers and intra corporate transferees. These two categories of TCNs are subject to sectorial directives which were adopted later 49 . As a result, the Single Permit Directive certainly does not apply to seasonal workers and intra-corporate transferees that are covered by the sectorial directives, nor does it currently cover categories of TCNs considered as seasonal workers or intra corporate transferees under national law.

Furthermore, it is currently unclear if the exclusion of workers posted from third countries in Article 3(2)(c) refers only to TCNs that have been posted from one Member State to another or also those posted from a third country. Directive 96/71/EC on the posting of workers only applies to posting within the EU. Workers posted by an employer established in a third country are not covered by any other Directive. As a result, workers posted from third countries in the framework of the movement of persons under GATS Mode 4 50 may be also excluded from the scope of the Directive and not benefit from the single permit procedure and related rights.

These problems result in administrative inefficiencies and in particular in the lack of clarity for migrants’ employers, who do not know exactly what legal regime and attached rights apply to them.

Sub-problem 2.2: Some categories of TCNs cannot benefit from the single permit procedure and related rights

Self–employed TCNs are expressly excluded from the scope of the Directive and are therefore deprived of the benefits of a single application and procedure, as well as of certain procedural guarantees and equal treatment rights provided by the Directive. Unlike seasonal workers and intra corporate transferees who are covered by EU sectorial directives, self-employed TCNs are mostly covered by national rules. For self-employed TCNs, the coherence and the effectiveness of the legal framework are affected by the fragmented system in place.

Some consultations saw calls for a clear definition of self-employed TCNs 51 at EU level which could cover third-country nationals who would like to move to a Member State without a job offer but are interested in starting their own business or conducting self-employed activities. Stakeholders representing Public Employment Services, however rejected the idea of EU-harmonised admission conditions for self-employed TCNs, rather advocating for admission of this category to remain regulated at the national level 52 .

The above applies also to the beneficiaries of protection according to national law, international obligations or the practice of a Member State. It is currently not clear whether, if allowed to work, they are covered by the procedure of Chapter II and the equal treatment provisions of Chapter III. The European Migration Network study on national protection 53 noted that in a number of areas, such as labour market, education, integration services and social benefits, beneficiaries of protection according to national law are unable to benefit from equal treatment. The Fitness Check concluded that there is currently a gap at EU level as regards the rights of holders of purely national protection statuses 54 .

Sub-problem 2.3: Differing rules on admission of low- and medium-skilled workers reduce attractiveness of the EU for legal migration

Low- and medium-skilled workers encompasses a heterogeneous range of workers defined with focus on their qualifications 55 or with regard to their skill levels 56 ranging from agricultural workers to some types of health workers. The conditions of admission and residence of low- and medium-skilled TCNs are not covered by the EU legal migration directives, with the exception of seasonal workers covered under Directive 2014/36/EU. As a result, there is no level-playing field between the Member States in attracting such migrants who can contribute to addressing existing and future labour shortages in the EU. At the same time, the complexity arising from diverging rules is confusing for prospective migrants and acts as a deterrent of legal migration. In addition, certain rights of low- and medium-skilled workers are not guaranteed by EU law unlike those of other categories of workers regulated at EU level (e.g. EU Blue Card for the highly skilled, intra corporate transferees, etc.). These schemes contain a number of advantages like for example the right to intra-EU mobility which can act as incentives to move to the EU.

In terms of application procedure and the right to equal treatment, the Single Permit Directive covers most categories of third-country workers, including low- and medium-skilled workers, other than seasonal workers.

The EU experienced significant labour shortages in the third quarter of 2019 57 , i.e. vacancies not covered by Member States’ or other EU nationals 58 , in those Member States where unemployment reached a record low. Despite concerns that the Covid-19 pandemic would result in a long-term economic downturn, the unemployment rate in the EU has been steadily decreasing since March 2021, albeit still exceeding the pre-crisis levels 59 . While some Member States face shortages in highly skilled jobs, for others shortages are rather in medium and low-skilled occupations, hence there are disparate labour market needs between different Member States. In several Member States (for example, Greece and Spain), there are no quantitative labour shortages, with unemployment levels not having recovered in the aftermath of the global financial crisis. In contrast, in Belgium, the relatively high levels of unemployment are coupled with high vacancy rates, indicating low levels of labour market matching efficiency, which is indicative of qualitative labour shortages. Czechia, on the other hand, stands out for its very high job vacancy rate and comparatively low unemployment rate, indicating that quantitative labour shortages are a major issue for the economy.

Average job vacancy rate versus average unemployment rate by Member State – Beveridge points, EU27, Q3 2020

Source: Eurofound, Tackling labour shortages in EU Member States

The European Commission’s 2020 analysis identified sectors of most widespread shortages in European countries and regions covered by the report (topped by four healthcare related occupations, five software related occupations and ten craft occupations), as well as the main sectors with most severe shortages (topped by the same four healthcare occupations and five software related occupations) 60 .

Drivers

On the one hand, one of the drivers of the problems above is the regulatory gap at EU level, which consists in excluding from the scope of the Directive several categories of TCNs that could potentially contribute to the Single Permit’s objectives, such as self-employed persons, or those benefitting from protection under national law. These gaps can affect the EU overall competitiveness, particularly in relation to innovative entrepreneurs that could contribute to job creation and boost innovation. Although these categories are currently regulated at national level, the legal requirements are very different from one Member State to another.

In addition, there are no references in Article 3 to some categories of TCNs that are excluded from the scope of the Directive since they are covered by sectorial directives of the EU legal migration framework that were adopted later or by other legal instruments. Consequently, the current wording results in an exclusion of similar categories of workers but that do not fall within the scope of those directives from the safeguards and rights provided by the Directive.

On the other hand, another driver is the lack of a specific EU instrument for admission of medium- and low-skilled workers although the Directive confers certain rights (including equal treatment with nationals) and procedural guarantees.

Problem area 3: Workers are not sufficiently protected from exploitation

There are two main aspects of the problem:

a)Linking the single permit to one employer or activity increases the risk of exploitation and creates administrative burden

This issue is one of the recurrent concerns raised by stakeholders in various consultations by representatives of migrants, economic and social partners, and legal migration practitioners 61 . In all Member States examined under the Fitness Check, except for Greece and Portugal, certain permits to work are linked to a specific employer. The Directive establishes that on the basis of the permit, a TCN can exercise the specific employment activity authorised under the permit. Moreover, in all Member States except for Cyprus and Germany, TCNs need to apply for a change of permit if they lose their job or want to change employment. As highlighted by the opinion of the Fit for Future Platform, this results in higher risks of people losing their residence permit when they lose their job and can increase exploitation, as permits which are linked to a single employment relationship lead to dependency and exploitation and pull people into irregularity. This might create significant costs for workers, employers and public administration.

The requirements in the event of changing the employer or occupation differ across Member States.

•    In some Member States (e.g. Cyprus, Malta and Italy), if TCNs hold a permit that allows them to work, they only need to request a permission to change employer, but are not required to apply for a change of their status.

•    In contrast, in some other Member States, TCNs are required to apply for a new work permit since the permit issued is limited to a specific employer.

•    Yet in other Member States, such as Finland and Estonia, a change of status is only necessary in case of a change of employment to a different sector than that authorised by the permit.

This creates twofold issues: firstly, where a change of status is required, such requirements create administrative burden both for permit holders who are forced to apply for a new permit and for the national authorities who, as a result, have to process more applications.

Secondly, stakeholders representing migrants and the civil society have highlighted that permits linked to a single employment relationship lead to dependency, increase the vulnerability of TCNs to exploitation and can pull people into irregularity. Migrants can feel prevented from complaining, denouncing abusive working conditions or exploitative episodes or resigning from their position, out of fear of losing their job and consequently their permit. This was also confirmed by the opinion of the Fit for Future platform.

A position paper of a civil society organisation, shared in the framework of the 2020 public consultation on the future of EU legal migration 62 , advocated for the revision of this particular aspect of the Directive. Specifically, it emphasised that under the Directive, migrants should be allowed to convert their permits more easily into other types of permits/authorisations as well as to change the employer. Consulted stakeholders were in favour of making the possibility to change the employer a mandatory provision of the Directive and stressed the importance of also allowing TCNs who had lost their employment to have adequate time to look for other employment opportunities without losing their permit. The implementation report found that only in a small number of Member States did third country workers have the same rights as nationals to change their job or employer (FI, FR, IT and SI) 63 .

b)Insufficient protection of third-country workers from labour exploitation

Another area highlighted by stakeholders was the need to improve the protection of TCNs from labour exploitation 64 under the EU legislative framework. Preventing the abuse and exploitation of legally residing TCNs is highly relevant in relation to the overall objectives of the legal migration acquis, and its importance has been emphasised in the stakeholder consultations and in the literature. For example, the European platform on undeclared work considers migrant workers as particularly vulnerable to the effects of undeclared work and supports strengthening Member States' capacity to ensure equal treatment, notably as regards pay and working conditions, social security and tax benefits. Labour exploitation is tackled differently across the EU in terms of sanctions and other legal consequences. Employers can face a number of sanctions, among the most common are administrative and criminal sanctions. How sanctions are calculated and applied differs substantially from Member State to Member State 65 .

The legal migration Directives, except for Directive 2014/36/EU on Seasonal Workers, do not provide specific mechanisms to ensure the enforcement of equal treatment provisions. (i.e. there are no provisions relating to inspections, monitoring nor sanctions against employers). Directive 2009/52/EC (“the Employers' sanctions Directive”) only concerns the employment of illegally staying TCNs, therefore not covering TCNs legally residing under the legal migration acquis. Moreover, the current rules at EU level that focus on withdrawing, or not renewing permits of TCNs if the employer has been guilty of exploitative practices, may constitute in practice a disincentive for third-country workers in vulnerable situations to report situations of abuse or exploitation 66 . 

Estimating the scale of the problem is challenging for a number of reasons 67 . First, there is no universally agreed definition of ‘labour exploitation’. This, combined with the fact that labour exploitation is hard to detect, places victims of exploitation at a particular risk of being sanctioned for illegal work, while they also face numerous barriers to access justice 68 . Although data on third-country nationals working undeclared is scarce, there are hints that they could be more often engaged in undeclared work – and consequently exposed to exploitative working conditions. While irregularly staying third-country nationals are most at risk of labour exploitation, some groups of regularly-staying migrants also face this risk because of their vulnerability. Overall, legal migration pathways for third-country nationals mainly focus on high-skilled sectors, and consequently, low and medium skilled migrants risk working in undeclared employment, especially in sectors with high workforce demand, such as domestic work or agriculture, despite this sector being covered by the Seasonal Workers Directive. The International Labour Organisation estimated that in 2016 there were 684,000 victims of ‘modern slavery’ in the EU 69 .

During the targeted consultations, some stakeholders emphasised the need for a more ambitious, horizontal approach in the legal migration legislation, and conveyed dissatisfaction with the implementation of the Directive in general in some Member States 70 . Others considered that national rules already adequately addressed protection, inspections, monitoring, and sanctions 71 . The topic of labour exploitation is tackled differently across the EU in terms of sanctions and other legal consequences, with some Member States imposing financial sanctions to punish exploitation while others foreseeing a combination of both financial penalties and deprivation of liberty 72 .

Drivers

The main driver of this problem is a regulatory gap:

a)Article 11(c) of the Directive establishes that the permit holder has the right to “exercise the specific employment activity authorised under the single permit in accordance with national law”. This provision can result in difficulties regarding changing a job as it results in the need to apply for a new permit;

b)Currently the Directive does not address directly the issue of exploitation of TCNs, as this issue remains regulated under national law in a very diverse and fragmented way.

Though equal treatment provisions of the Directive aim at ensuring that TCNs have the same rights as EU nationals and therefore aim at preventing abuses and exploitation, not all equal treatment provisions are applicable to all categories of third-country workers. For example, self-employed workers are explicitly excluded from the scope of the Directive and are not covered by the EU acquis. Also, the provisions on equal treatment in the EU legal migration directives are subject to limitations and are sometimes optional for Member States, while mechanisms to ensure their enforcement are not provided for in the Directives with the exception of the Seasonal Workers Directive.

Moreover, as stated above, while inspections, monitoring and sanctions against employers constitute a further means to address, among other issues, labour exploitation, the scope of the Employers' sanctions Directive is limited to the employment of illegally staying TCNs, therefore not covering TCNs legally residing under the legal migration acquis.

2.2.2.2.    How will the problem evolve?

Without EU action the identified problems will persist: prospective employers and TCNs will continue facing excessively long and unnecessarily complex procedures which in turn will continue to be one of the factors deterring employers from filling the shortages through international recruitment and affecting EU’s attractiveness for migrants with skills needed in Europe. TCNs will continue being more vulnerable to labour exploitation as a result of insufficient safeguards and the dependency on a single employer. A number of the problems result from additional requirements introduced by the Member States in terms of duplicating procedures (such as by conducting a substantive analysis of underlying documents both at the stage of visa application and single permit application on arrival) or by requiring third-country nationals to apply for a new permit every time they want to change an employer. The revision of the Single Permit Directive can contribute to alleviating a part of the current administrative burden.

Furthermore, maintaining the status quo would have a long-term negative impact on the Member States’ ability to tackle EU’s increasing demographic challenges and the progressively shrinking labour force. Population projections of working age population

Source: Eurostat, EUROPOP2019 (proj_19np)

Therefore, without addressing the ineffectiveness and inefficiencies of the EU immigration system, the EU as a whole will have additional self-imposed difficulties with attracting workers of all skills levels it needs for its economy. Nevertheless, it should be borne in mind that the proposed revision would represent merely an incremental improvement of the procedure and increased protection of third country workers that already exists. The proposed measures are mainly technical, targeted changes that will contribute to further facilitating current procedures that can bring some real, if modest benefits, to EU competitiveness in areas where a global market for skills and talent exist. 

Further implementation efforts could be made and more infringements launched on the current Directive but these would not fix the main problems described above. The main weaknesses of the Directive are structural and, consequently, cannot be solved by better compliance and stronger enforcement of the current rules.

3.3.    Why should the EU act?

3.1.3.1.    Legal basis

The legal basis for Union action in the area is established in Article 79(2)(a) and (b) of the Treaty on the Functioning of the European Union (TFEU), in connection with Article 79(1) of the same Treaty. These provisions state that the “Union shall develop a common immigration policy aimed at ensuring, at all stages, the efficient management of migration flows, fair treatment of TCNs residing legally in Member States, (…)”. For this purpose, the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, "shall adopt measures in the following areas: (a) the conditions of entry and residence, and standards on the issue by Member States of long-term visas and residence permits (…)” and “(b) the definition of the rights of TCNs residing legally in a Member State, including the conditions governing freedom of movement and of residence in other Member States”.

3.2.3.2.    Subsidiarity: Necessity of EU action

The principle of subsidiarity applies since this is an area of shared competence 73 . A subsidiarity check was already carried out in the impact assessment at the moment of the first proposal on the Single Permit in 2007 (COM (2007) 638 final). The need for a common EU framework on legal migration is linked to the abolition of internal border controls within the EU and the creation of the Schengen area. In this context, the migration policies and decisions of one Member State affect other Member States, so it is deemed necessary to have a set of common EU rules in relation to the conditions and procedures for allowing TCNs to enter and reside in the EU, and to lay down their rights following admission 74 .

3.3.3.3.    Subsidiarity: Added value of EU action

·The TFEU empowers the Union to develop a common immigration policy, so this is a clear objective to be pursued at EU level. At the same time, legal migration is an area of shared competence between the EU and the Member States, and the Treaty also reserves explicitly to the Member States the right to set volumes of admission for labour migrants they admit. The Fitness Check showed that the legal migration Directives, including the Single Permit Directive, have had a number of positive effects that would not have been realised by Member States acting alone. While positions on specific aspects often vary (e.g. across Member States, NGOs, businesses, individual migrants), all stakeholders, including Member States, confirmed the continued overall added value of the EU legal migration acquis 75 . The main positive effects identified by the Fitness Check are: a degree of harmonisation of conditions, procedures and rights, helping to create a level playing field across Member States; simplified administrative procedures; improved legal certainty and predictability for employers, administrations and TCNs; improved recognition of the rights of TCNs (namely the right to be treated on an equal basis with nationals in a number of important areas, such as working conditions, access to education and social security benefits, and procedural rights). However, despite these positive effects, the Fitness Check also concluded that there is clearly room for further harmonisation and simplification at EU level. Through the Single Permit Directive the EU sought to address two issues which have not been fully achieved:

oto simplify administrative procedures for all third-country workers and employers throughout the EU by introducing a single permit application procedure 76 and

oto eliminate a “rights’ gap” regarding eligible third country nationals as opposed to own nationals by introducing equal treatment in certain categories of rights (this way the EU wanted to reduce unfair competition emanating from that gap, thus protecting the EU citizens from a cheap labour and treating third country workers fairly).

The revision of the Directive aims precisely at such further clarification and simplification to ensure more efficient procedures when handling an application and an improved equal treatment in employment-related fields for workers admitted to the Member States. The Directive only establishes equal treatment in employment related fields. Therefore, it does not interfere with Member States' competence to define the content of the actual rights. Since the Directive covers different categories of third-country workers, including low- and medium-skilled who may be more susceptible to exploitation, introducing provisions on employer sanctions similar to those included in the Seasonal Workers Directive would cover a much wider range of workers. By prescribing specific common processes and instruments to prevent, identify and sanction labour exploitation, it is expected to contribute to the protection of all third-country workers covered by the scope of the Directive from labour exploitation, thus contributing to strengthening the level playing field across Member States. Exploitation and sub-standard working conditions of third-country workers need to be overcome by granting certain socio-economic rights and mechanisms to monitor them in a binding, and thus enforceable, EU-level instrument.

The Directive provides only for a minimum level of harmonisation as regards procedural simplification. It imposes only a general obligation for Member States to provide for a "one-stop-shop" system and a general prohibition on issuing additional documents. Further simplification of the procedure would not interfere with the Member States internal procedures when handling an application.

4.4.    Objectives: What is to be achieved?

4.1.4.1.    General objectives

Based on the problem analysis, and taking into account the role of the Directive within the overall EU’s legal framework in the field of legal migration, the general policy objectives of the initiative are:

(1)to ensure efficient management of migration;

(2)to foster competitiveness and growth in the EU;

(3)to ensure fair treatment and protection of TCNs legally residing in the EU.

4.2.4.2.    Specific objectives

The specific policy objectives correspond to the problem areas analysed above:

(1)to simplify admission procedures;

(2)to ensure greater efficiency of application procedures;

(3)to address EU labour shortages;

(4)to enhance equal treatment of TCNs with EU citizens;

(5)to protect third-country national workers from labour exploitation.

The table below presents an overview of general and specific objectives and their relation with the identified problems and drivers:

5.5.    What are the available policy options?

5.1.5.1.    What is the baseline from which options are assessed?

The current Directive would continue to be applied without legislative changes. However, existing monitoring and enforcement activities of the current legislation would continue, as reported in the Commission implementation report of 2019. This would include ongoing follow-up to open infringement procedures and court cases, as well as EU Pilots.

The baseline should also take into account the revision of the Long-term Residents Directive, which is expected to create a more coherent, efficient and fair system to acquire the EU long-term resident status, facilitate intra-EU mobility of long-term residents and improve their rights and those of their families. However, as the number of applicants for the long-term resident status is very low and there is no clear link with single-permit holders, the likelihood that the change in rules on obtaining long-term resident permit would significantly affect third-country nationals’ decisions to migrate and apply for single permits is very limited.

Without EU action, the problems identified will continue to exist and possibly, further exacerbate. Third-country nationals falling within the scope of the Directive will continue facing difficulties when applying for a permit. They will still have to invest additional time and resources to understand, prepare and follow their applications, and encounter long waiting times before receiving the permits.

Along the same lines, Member State authorities will continue to encounter inefficiencies caused by the multi-step procedures (labour market test, visa application, single permit procedure) and as a result of the duplication of efforts and complex processes. The consequences of these persisting inefficiencies may be that employers are likely to continue being deterred from resorting to international recruitment even in the face of skills shortages. For the same reason, TCNs are less attracted to the EU as a destination, as they are deterred by the administrative hurdles and delays.

TCNs will also continue to be more vulnerable to labour exploitation and situations of undeclared work due to the fact that the single permit in some Member States is tied to a single employer and to the overall lack of monitoring of their working conditions (and associated protection measures). In addition to potentially placing them in a harmful or irregular working situation, the current problems may also give rise to an increase in irregular stays (e.g. TCNs losing their job and hence their permit to stay, continuing to stay illegally).

Problems associated with a lack of equal treatment will also persist, in particular with regard to access to housing and family benefits. The lack of equal treatment is likely to have a negative impact on the degree to which TCNs feel accepted by society and are able to fully integrate.

As mentioned above, the majority of issues raised in the ongoing infringement proceedings and EU Pilots concern excessively long processing times and equal treatment rights. However, the revision of the Single Permit Directive aims at further facilitating the application procedure and clarifying and improving the equal treatment provisions. The problems identified are not directly related to the incorrect implementation by Member States but to shortcomings of the current legal framework which can only be tackled by legislative action. The main areas to be revised cannot be followed-up through infringement proceedings as they either do not fall within the scope of the Directive or are subject to optional clauses and therefore to Member States discretion.

For the assessment of the policy options, the following main baseline assumption has been made:

Whilst a lot has been published on how migration to the EU could evolve after the COVID-19 pandemic, views expressed in literature and by experts vary greatly. For example, a Commission study from 2020 77 noted that the EU could see an increase in third-country nationals wanting to move to the EU, as a result of the anticipated global economic downturn. Initial 2020 data on the issuance of residence permits provide a mixed picture, with some Member States witnessing a strong reduction in permits issued and others seeing an increase instead. Another study assessing possible immigration scenarios 78 noted that experts expect an increase in migration towards the EU between 21% and 44 % from the recorded average annual figure for the 2008–2017 period, especially in future scenarios in which countries cooperate multilaterally. A stronger increase is expected with regard to highly skilled immigration. Overall, however, the study emphasises that experts are not confident in their responses, and disagree substantially on the size of international migration. Given these divergences and uncertainty, a linear trend has been chosen, which envisages a slightly lower number of third-country nationals being granted a single permit than was the trend over the last two years before the COVID-19 pandemic (2018 and 2019) based on a lower take-up in previous years, which still results in a more than doubling of the number of permit issuances over a 10-year period.

The detailed assumptions used to estimate the costs and the economic impacts of the policy options are presented in individual assessments, and further explained in Annex 3 and 4.

5.2.5.2.    Description of the policy options

Based on the problem definition and objectives described above, three different policy options have been identified, one non-legislative and two legislative.

Option 1: Non-legislative option

This policy option would involve non-legislative actions aimed at enhancing the implementation of the Directive:

·performing comparative analyses and targeted studies (e.g. in the framework of the EMN) on specific aspects of the implementation of the Directive,

·developing non-binding guidelines on the interpretation of the provisions of the Directive in the form of the Single Permit Directive Handbook.

·recommendations on aspects currently not deemed to be covered by the single permit procedure (such as the duration and interplay of the entry visa application procedure, labour market tests with the single permit application process) or on the provisions of the directive which allow wide discretion to the Member States,

·promoting innovative approaches e.g. to digitalisation and streamlining of processes, also possibly by adopting recommendations 

·evaluating experiences of the Member States and stakeholders in the context of enforcing the Directive, and

·enforcement activities (including launching infringement proceedings).

Option 2: Basic legislative revision of the Directive

The option aims at simplifying the application procedure and clarifying what categories of third-country workers are covered by the Directive, as well as covering beneficiaries of national protection with the single procedure.

Application procedure:

oFacilitating the application procedure by allowing TCNs to lodge applications both from outside and within the Member State territory, depending on the circumstances of the application, and clarifying that the initial entry visa shall be issued if all the conditions to issue the single permit are fulfilled 79 .

oSpecifying that only one substantive assessment of documents should be done by the competent authorities, either at the stage of the entry visa application or resident permit application, and that the visa procedure falls within the four-month period for processing the application for a single permit.

oModifying Article 1(2) to clarify that the labour market test is considered to constitute a component of the single application procedure and should fall within the four-month period.

Personal scope:

oFurther clarifying the categories falling outside the scope of application of the Directive (intra-corporate transferees, seasonal workers and workers posted within the EU) by making clear references to the relevant acquis.

oIncluding beneficiaries of protection according to national law in the scope of the Directive.

This option would also foresee adopting soft law measures (e.g. recommendations) to improve and harmonise the implementation of equal treatment rights foreseen by the Single Permit Directive.

Option 3: Legislative revision of the Directive as in Option 2 plus regulating rights and protection

The option builds on Option 2 and, in addition, aims at improving some equal treatment rights and improving protection from labour exploitation by legislative action.

Rights:

oEnsuring the permit is not only linked to one employer to avoid excessively frequent changes to the permit that makes the permit holder too dependent on the employer. In addition, ensuring the possibility to work while an application for a new permit is being processed in case of a change of employer (Art. 11(c)).

oClarifying Art. 12(2)(d) to stipulate that access to private housing is not included in the derogation provided for by this Article.

oClarifying the equal treatment of TCNs with EU nationals with regard to calculating family benefits: if calculation of family benefits of EU nationals takes into account family members residing outside the EU, this should also apply to TCNs.

oRemoving the possibility for Member States to exclude those working on the basis of a visa from family benefits if the visa has a duration of more than 6 months.    

Protection from labour exploitation:

oThis option would also seek to expand the material scope of the Directive to include provisions relating to inspections, monitoring and sanctions against exploitative employers, similarly to the Seasonal Workers’ Directive.

5.3.5.3.    Options discarded at an early stage

The following two options have been identified but not retained for further in-depth assessment.

a)Including self-employed TCNs in the scope of the Directive.

The considered option consisted in including self-employed TCNs in the scope of application of the Directive, without regulating the respective admission conditions. Including self-employed workers in the scope of the Directive would mean that these workers, when coming from third countries to establish themselves in a Member State, would also be able to benefit from the single application procedure, procedural safeguards and the right to equal treatment, if such rights are not already provided in the national legal order. In order to include this category in the scope of the Directive, it might be necessary to introduce a common definition of 'self-employed workers' in the Directive 80 , as the category represents a complex landscape of a diverse variety of workers 81 .

Distinguishing between self-employed workers and employees is difficult. In some cases, self-employment has been used by companies to reduce labour costs for salaried employment and to gain a competitive advantage by avoiding social security contributions and circumventing labour law regulations 82 . Hybrid forms of employment – such as 'dependent' and 'bogus' self-employment – have emerged, especially in the platform-driven section of the economy (for example, where platform workers, previously classed as self-employed, have been recognised by court cases as employees, e.g. Uber 83 ). These types of working arrangements can represent a significant challenge for national labour and social legislation as well as for the financing of social security systems 84 .

While some experts and stakeholder groups representing the civil society, business organisations and trade unions expressed support for including self-employed workers in the scope of the Directive 85 , Member States consulted were opposed to including self-employed workers due to complexities surrounding this category 86 .

Overall, given the inherent complexities and expressed reluctance of Member State authorities, this measure would merit a more in-depth assessment and wider stakeholder discussion, including a mapping of definitions and currently available pathways for self-employed workers in Member States. This would also aim at ensuring that a potential inclusion of this category in the scope of the Directive would not lead to abuses of this pathway and potential exploitation of workers (de facto employees).

b)Including admission conditions for low- and medium-skilled workers in the Single Permit Directive

Admission conditions for low- and medium-skilled workers are currently regulated at national level and present a complex landscape. Firstly, Member States have adopted different approaches to labour migration and admission of TCN workers, including annual quotas (e.g. Italy), points-based systems (e.g. Austria), market-based approaches (e.g. Sweden). Secondly, many Member States have specific admission channels for low and medium-skilled workers of certain nationalities 87 . Thirdly, labour market testing across EU Member States is organised differently.

Introducing conditions for low- and medium-skilled workers in the Directive would thus have to marry these complexities to establish a level-playing field and leave flexibility to Member States where needed to adapt the admission framework to their national contexts and needs.

Experts representing business organisations, trade unions, and civil society 88 suggested that for highly skilled workers, a common EU strategy indeed does make most sense, while a sectoral approach could be explored regarding low and medium-skilled workers, focusing on those areas in which most labour shortages occurred. However, civil society, trade union stakeholders have questioned the appropriateness of the sectoral approach, underlining that it would limit the availability of legal channels to Europe and the matching of skills (at all levels) with jobs available 89 . Beyond these complexities, stakeholders representing business organisation, trade unions, civil society, legal practitioners and Member States 90 expressed scepticism about the need and benefits of regulating admission conditions of low and medium-skilled workers at the EU level as in their view they are sufficiently addressed by national legislation and the single permit procedure. Furthermore, some experts have expressed the view that as the Directive is a horizontal ‘procedural’ Directive, it is not the appropriate legal instrument to introduce admission conditions only for specific categories of workers.

6.6.    What are the impacts of the policy options?

To determine the preferred option, the policy options have been assessed and compared in the light of the following criteria:

-Effectiveness, i.e. to what extent the option meets the policy objectives;

-Efficiency, i.e. the relative weight of the costs and benefits of the option;

-Coherence with the EU legal framework.

No significant environmental impact is expected from the initiative and has thus not been assessed further.

The selected impacts are assessed qualitatively and, where possible, quantitative analysis has been done based on a number of key assumptions (see Annexes 3 and 4).

The table below presents an overview of policy options and their expected effectiveness in achieving the objectives of the initiative.

6.1.6.1.    Option 1: Non-legislative option – actions to enhance complementary and supporting activities

Option 1 would involve, on top of the dynamic baseline activities, several new non-legislative actions aiming to enhance the implementation of the Directive and the promotion of complementary and supporting activities. These actions would include:

·conducting additional comparative analyses and targeted studies (e.g. in the framework of the EMN) on specific aspects of the implementation of the Directive, such as e.g. the implementation of equal treatment provisions with regard to access to property or social security benefits, the form and timing of labour market tests in different Member States and the related procedures,

·developing non-binding guidelines on the interpretation of the provisions of the Directive in the form of the Single Permit Directive Handbook. Such a handbook would be developed in close cooperation and extensive discussions with the Member State experts of the Contact Group Legal Migration, before being adopted in the form of a Commission recommendation,

·adopting recommendations on aspects that are currently not deemed to be covered by the single permit procedure (such as the duration and interplay of the entry visa application procedure, labour market tests with the single permit application process) or on the provisions of the directive which allow wide discretion to the Member States,

·promoting innovative approaches e.g. to digitalisation and streamlining of processes, also possibly by adopting recommendations, and

·evaluating experiences of the Member States and stakeholders in the context of enforcing the Directive.

Effectiveness in achieving the objectives

No major effects on simplification of admission procedures are expected.

Under Option 1, the European Commission would seek to improve the implementation of the Directive and its clarity by introducing new, non-legislative actions. Firstly, the development of guidelines in the form of a Single Permit Handbook, which would be developed in discussions with the Member State experts of the Contact Group Legal Migration and adopted as a Commission recommendation, which is expected to help Member States improve the interpretation of the provisions of the Directive. Other recommendations on issues going beyond the current scope of the Directive, such as e.g. the timing and coordination of visa and labour market test procedures with the single permit procedure would also be considered. Comparative research is expected to facilitate the improved collection of information and exchange of good practice between Member States which may focus on e.g. labour market tests, transition to digitalised application processes, but also the approaches at national level to dealing with labour shortages. This, combined with the promotion of innovative approaches, may create a virtuous circle if Member States are incentivised to follow the most effective practices as a model. The Commission would also foster sharing best practices between Member States, i.a. on providing detailed, clear and user-friendly information to TCNs on the fees, procedures and requirements of the single permit procedure, digitalisation and streamlining of processes. Some Member States 91 have already developed migration portals aimed at providing clear information on the immigration requirements while highlighting why Member States constitute attractive destinations. Sharing best practices in this area and coordinating the approach to the provision of information application across Member States could improve the quality of information provided to the employers and TCNs. As a result, applicants may become more aware of the process and documentation requirements provided that Member States decide to implement the best practices. Other Member States may become incentivised to consider digitalising their application processes more or look into improving the coordination between different procedures and competent authorities. Guidelines, especially if endorsed by the Member States in the form of a Handbook, could contribute to more consistent and transparent application procedures among the Member States.

In terms of effectiveness in achieving the objectives, actions aimed at improving transparency of the single permit procedure and facilitating the understanding of the scheme's functioning at the national level may lead to some improvement in attracting TCNs. However, the potential is expected to be overall limited by the structural shortcomings of the Directive and the non-binding nature of the measures. In addition, if considered as a standalone option, the actual impact would remain marginal, given that the different labour market needs between Member States and shortages would remain mostly unaddressed.

Limited effects are also expected with regard to enhancing equal treatment of third-country workers. Under Option 1, the enforcement of the Directive by launching and following-up on infringement procedures will be continued. However, the scope for improvement of the implementation is very limited, as the differences in implementation of equal treatment provisions by the Member States are linked to their vague wording resulting from a compromise achieved by co-legislators. The legislative practices of Member States could be somewhat approximated through an improved exchange of knowledge and information or targeted non-binding recommendations. Specific attention could also be given to the best ways to prevent labour exploitation of TCNs although this would require enhanced cooperation between Member States migration and employment authorities. Member States may also be encouraged to exchange best practices and share information on perceived trends and possible single permit scheme abuses and to inspire Member States to fight against labour exploitation better and more effectively. This, in turn, would help in protecting TCNs from abuses. However, if not supported by stronger complementary actions, the measure may prove ineffective.

Social impacts and impacts on fundamental rights

National authorities are expected to gain a better understanding of the Directive and good practices in its implementation by others through exchanges of best practices and the promotion of innovative approaches (e.g. digitalised procedures, coordination of processes between different authorities), which may lead to some efficiency gains in the single permit procedures. However, the impact is expected to remain low as the measures under this policy option are not binding.

The possible availability of clearer information on the single application procedure may result in a reduced dependency of applicants on legal practitioners. Nevertheless, considering that the policy option does not set minimum binding standards on the type of information given or how the information should be provided, this will thus mostly depend on how national authorities implement the guidelines.

Third-country nationals would benefit from some measures under Option 1 to the extent that recommendations and good practices in providing easy access to clear and comprehensive information on the process and documentation requirements are promoted and followed as a model. TCNs would then be able to make a better-informed choice while having a more efficient application experience. However, given the non-binding nature of the measures, the impact would remain limited and continue to depend mostly on national decisions to enforce and make the best use of the recommendations/guidelines promoted by the Commission. 

Option 1 is not expected to have any significant social impact on EU citizens.

No impacts are expected on third countries.

No specific fundamental rights impacts of Option 1 have been identified.

Economic impacts

The economic effects of this measure are expected to remain marginal given that the measures are not legally binding, and Member States would not be forced to invest and improve their systems.

Efficiency

Administrative compliance costs

In those Member States where information provision currently is insufficient, some administrative costs might be generated if they decide to improve information provision, such as staff costs, cost of materials (incl. online information portals, leaflets), IT costs, etc. (please see Annex 4 for further details).

Enhanced complementary and supporting activities and better exchange of information among Member States would also generate moderate additional administrative costs (i.e. organisation of meetings; cost of materials; tailored training for national administrators/officers). Expected costs also relate to IT adjustments (i.e. the transition to digitalised applications; improvement of online migration portals; campaigns).

Also, additional compliance costs might be incurred if Member States national authorities decide to implement additional changes following best practices shared.

Some marginal costs might be envisaged at the European level as the Commission would implement a series of activities, including the launching of studies, tailored research, the organisation of additional meetings and expert exchanges, in particular in the context of developing a Single Permit Handbook. This could lead to additional procurement, or to providing funding to existing EU networks, such as the European Migration Network (EMN).

Coherence with other EU policies

Overall, Option 1 would contribute to ensuring a wider awareness of the Directive among TCNs, through better-disseminated information and improved national practices. This increased awareness of the Directive among TCNs is coherent with the New Pact on Migration and Asylum’s 92 objective of attracting international skills and talent in the EU.

Overall assessment

Overall, Option 1 might moderately contribute to ensuring a wider awareness of the Directive and could help contribute to administrative simplification and ensuring a more uniform application of EU legal migration acquis. However, considering that it is a non-binding solution, its impact will ultimately depend on the willingness of Member State authorities to implement the developed guidelines and recommendations and adjust their actions in line with the best practices shared. It cannot, therefore, be expected to deliver fully the objectives of the Pact and the calls of the European Parliament for legislative action. In particular, increased enforcement (including launching infringement proceedings) would not contribute to resolving the identified problems since most of them result from regulatory failure.

6.2.6.2.    Option 2: Legislative revision of the Directive - application procedure

Option 2 foresees legislative revisions, mostly focussing on improving the overall efficiency of the Directive by simplifying the application procedure. Option 2 includes the following policy measures:

§2.1: Place of application (Article 4(1)).

§2.2: Visa procedure for initial entry (Article 4(3)).

§2.3: Including labour market tests as part of the single application procedure.

§2.4: Mandating the provision of adequate information.

§2.5: This option also foresees soft law measures (e.g. recommendations) to improve and harmonise the implementation of equal treatment rights foreseen by the Single Permit Directive.

Effectiveness in achieving the objectives

Option 2 is expected to contribute to simplifying admission procedures and thus to address specific issues that have been identified as hampering the achievement of this objective of the Directive.

Four specific measures under Option 2 are expected to particularly contribute to simplification and reduction of administrative burden:

·Requiring Member States to always allow TCNs to lodge applications both from outside the EU and within the Member States (2.1.);

·Clarifying that if an entry visa is required, visa processing is considered to form part of the single application procedure and should fall within the four-month period (2.2.);

·Clarifying that the labour market test is considered to form part of the single application procedure and should fall within the four-month period (2.3.);

·Mandating Member States to provide adequate information (2.4.).

Together, these four measures will ensure that only one substantive assessment of documents is carried out by the competent authorities, either at the stage of the entry visa application or the single permit application and that the labour market test and the visa procedure (if required) are conducted within the four-month period for processing the application for a single permit. Currently, there is evidence 93 that these additional procedures can extend the timeframe for granting the single permit in some Member States. Requiring Member States to consider these procedures as part of the single permit procedure will ensure that the duration of the overall assessment does not exceed the four-month period. The perceived benefits of such administrative simplification were strongly confirmed by the stakeholder consultations.

Some of the measures under Option 2 will help harmonise application procedures and establish a level playing field across EU Member States. Firstly, by allowing TCNs to apply from both outside the EU and the territory of the Member States (2.1.), Option 2 will ensure greater harmonisation, as currently Member States have different requirements. Secondly, clarifying that the four month period also includes visa and labour market test procedures (measures 2.2. and 2.3.) will also contribute to better harmonisation.

Greater simplification and harmonisation are expected to contribute to improving the overall attractiveness of the EU and may have some positive effects on the labour market and skills matching and on the employers’ willingness to recruit TCNs to address skills shortages. However, a direct correlation is difficult to be established due to a multitude of endogenous and exogenous factors that affect skills matching in the labour market.

Measure 2.5 of adopting non-binding recommendations (soft law) on equal treatment is expected to positively contribute to enhancing equal treatment of TCNs with EU citizens. Where ambiguities exist, such soft law interpretations would facilitate correct implementation for Member States. However, due to its non-binding nature, the expected effectiveness of this measure is lower than of adopting legislative measures which would bring greater legal certainty.

Expected impacts

Social impacts and impacts on fundamental rights

Businesses/employers are expected to benefit from Option 2 in terms of quicker, and potentially wider, access to labour resources from third countries. The streamlining of the procedure could also encourage more employers to hire third-country workers. Any simplifications in the application process are expected to benefit SMEs as they are likely to bear a disproportionate burden when hiring TCNs in comparison to large enterprises due to more limited resources (e.g. legal fees, understanding of immigration law and process, etc.).

Overall, based on the proposed simplification measures under Option 2, national authorities are expected to gain efficiencies in their application procedures due to further streamlining of their processes.

Those Member States whose procedures currently exceed the four months’ time limit are likely to incur some adaptation costs in the short run but with cost savings in the medium to long-term due to streamlining the procedures. Overall, more efficient procedures and improved equal treatment and prevention of exploitation are likely to improve EU attractiveness which will benefit Member States in skills matching and potentially satisfying labour shortages through migration.

Legal practitioners and judiciary at Member States and EU level will need to familiarise themselves with the new provisions resulting from Option 2, but ultimately Option 2 will lead to a reduction in the demand for their services by TCNs and businesses, mostly as a result of the simplification and improved information provision.

Third-country nationals are expected to benefit from Option 2 by simplifying the application procedure, which will result in potential cost reductions for TCNs as well as their quick integration into the labour market due to resulting efficiencies of the application procedure. They may also benefit indirectly from increased clarity and possibly improved Member States’ application of the Directive with regard to TCNs’ rights to equal treatment

Option 2 may result in a moderate increase in the number of TCNs arriving to the EU as a result of faster, simpler procedures. EU citizens would benefit from the positive impact of Option 2 on overall economic growth given that TCN workers would, to a limited extent, help fill labour shortages and indirectly contribute to reinforcing knowledge-based economy and job creation in the EU. Displacement of EU workers is expected to remain marginal, given that the expected increase is very limited and the fact that that Member States will continue having the option of conducting labour market tests to determine the number of TCNs entering their territory for work purposes and to ensure that the vacancies cannot be filled by EU workers. As a result, also the expected impact on domestic labour markets is expected to be marginal.  

As regards third countries (including negative effects such as brain drain), faster and more streamlined application procedure may attract more TCNs wishing to work in the EU and apply for a single permit. This is likely to result in some loss of human capital and labour force in third countries. However, simplification and harmonisation alone may not be a key driver, hence the extent to which this could be the case is very difficult to estimate due to a multitude of factors at play.

The simplification measures (2.1, 2.2, 2.3 and 2.4) are not expected to have direct effects on fundamental rights as they focus on efficiency and reducing the administrative burden. However, measure 2.5 on adopting non-binding recommendations on equal treatment is expected to positively contribute to several fundamental rights of the Charter of Fundamental Rights of the European Union, such as, inter alia, right to property (Art.17), non-discrimination (Art. 21) and social security and social assistance (Art. 21). The non-biding recommendations are expected to provide more clarity on these aspects. However, it is difficult to assess to what extent the recommendations will have a positive effect, due to their non-binding nature as well as it is unknown to what extent this tool would be used (i.e. how often would the need for such recommendations arise and the specific focus of such recommendations). 

Economic impacts

The key assumptions and calculation methods are detailed in Annex 4. The five measures under Option 2 focus on simplification of the application procedure which is expected to moderately contribute to improving the attractiveness of the EU, which in turn may have some positive effect on the labour market and skills matching.

The following types of economic impacts were considered: tax revenue, consumption, additional earnings, remittances, job vacancies and productivity. The main assumption for the Policy Option 2 and its composite measures is that, as a result of simplifying admission procedures, the EU becomes a more attractive place to live and work for TCNs, which in turn will lead to several positive economic effects, provided their integration into the economy and society is successful. As the majority of Member States apply some form of labour market test, it is assumed that these third-country nationals would nearly exclusively be accessing vacancies that are difficult to fill, or be bringing skills that are unavailable in the EU labour market. Additionally, these third-country nationals would compensate for the ageing EU workforce.

In order to provide a better understanding of the possible economic impacts resulting from the issuance of additional single permits for remunerated activities, on top of the baseline, a (cautious) two-step approach was adopted. First, a moderate increase of the number of permits was assumed at the level of 2.5%. Then, on this basis, some quantifiable impacts were calculated (according to the methodology detailed in Annex 4), as an illustrative example of the possible size of effects over a period of 10 years rather than as firm predictable results of the proposed measures:

-An increase in tax revenue of about EUR 636.9 million

-Increased additional earnings by about EUR 6.6 billion

-Increased consumption for about EUR 2.9 billion.

Resulting in a total economic benefit to the EU by approximately EUR 9.1 billion.

Remittances are expected to increase by around EUR 995.1 million.

As detailed in Annex 4, it was not possible to arrive at quantification of some possible economic impacts, including economic growth and productivity or the impact of covering self-employed workers by the single permit procedure given the high level of uncertainty and complexity of factors intervening at different levels.

Efficiency

Administrative compliance costs

A streamlined and simplified procedure for single permit applications would result in a number of cost savings for employers, TCNs, as well as national authorities.

For TCNs, there are a number of costs typically incurred by applicants (TCNs and/or their employers) in the application process, the costs of compiling the required documentation or the costs linked to legal counsel that may be needed to assist with the application process.

In addition, indirect and opportunity costs are likely to decrease. For example, the overall shorter procedures would mean that the third-country workers would commence their job sooner, which in turn could lead to more efficiency on the labour market in terms of greater job matching and shortages filled, as well as potential increases in productivity. This will also result in fiscal benefits in terms of tax contributions. 

National authorities are likely to encounter some adjustment and familiarisation costs in the short and mid-run (including costs for training, IT, etc.) but are expected to gain efficiencies due to more streamlined procedures in the long run. Possible administrative costs associated with non-binding recommendations concerning equal treatment rights are difficult to estimate. This is due to uncertainty around the specific content of the proposed non-binding recommendations and the extent to which Member States will take up the recommendations in practice.

The cost analysis showed that the following average annual costs 94 (taken for cost figures between year 2021 to year 2030) would be incurred for Option 2 (please see Annex 4 for further details):

·One-off costs for national authorities: between EUR 2.2 million and EUR 4.9 million in year 1

·Recurring costs for national authorities: between EUR 200,000 and EUR 400.000 annually

·Recurring cost savings for national authorities: between EUR 200,000 and EUR 3.6 million annually

·Recurring cost savings for TCNs: between EUR 129.4 million and EUR 545.7 million annually

·Recurring cost savings for employers: between EUR 31.7 million and EUR 101.0 million annually.

Coherence with other EU policies

Overall, Option 2 is coherent with EU legal migration law and policy. Option 2 contributes to fulfilling the objective of the New Pact on Migration and Asylum of better enforcement of current legislation in the area of legal migration.

Overall assessment

Overall, the further simplification and streamlining of the procedure foreseen by this option is expected to positively impact the majority of stakeholders concerned, including employers, TCNs and national authorities (despite some cost adjustments needed in the short run). Together, the measures envisaged under Option 2 will contribute to alleviating the administrative burden for applicants, employers and national authorities. By adopting the specific measures, the single permit procedure is expected to be further streamlined. The perceived benefits of such administrative simplification were widely confirmed by the stakeholder consultations 95 . Adopting non-binding recommendations (soft law) on equal treatment can contribute to enhancing equal treatment of TCNs with EU citizens and improving information on the application procedure and related rights.

6.3.6.3.    Option 3: Legislative revision of the Directive to simplify the procedure, improve rights and protection from exploitation

Option 3 builds on the measures included in Option 2 but, in addition, aims also at improving some equal treatment rights and improving protection from labour exploitation by legislative action and clarifying what categories of TCN workers are covered by the scope of the Directive. In addition, the option envisages covering beneficiaries of national protection with the single procedure.

§3.1: Ensuring the permits are not linked to only one employer.

§3.2: Clarifying equal treatment for access to private housing.

§3.3: Clarifying equal treatment in granting family benefits to family members residing in third countries.

§3.4: Removing the possibility to exclude those working on the basis of a visa (valid for more than six months) from family benefits.

§3.5: Clarifying the categories falling outside the scope of application of the Directive.

§3.6: Including beneficiaries of national protection in the scope of the Directive.

§3.7: Including similar provisions to Art. 17, Art. 24 and Art. 25 of the Seasonal Worker’s Directive, on sanctions, compensation, monitoring, assessment and inspections, facilitation of complaints.

Four measures aim to clarify and/or expand the scope of safeguards offered to TCNs:

·Ensuring the permit is not only linked to one employer (2.4.)

·Removing the restrictions on equal treatment for access to private housing (2.6.)

·Clarifying equal treatment in granting family benefits for family members residing in third countries (2.7.)

·Removing the possibility for Member States to exclude TCNs working on the basis of a visa from equality of treatment in respect of family benefits (2.8.).

In particular policy measure 2.4 on ensuring the permit is not only linked to one employer is likely to contribute to the protection of TCNs from exploitation. Several stakeholders consulted, namely representatives of migrants and the civil society, considered that linking the permit to a single employer placed migrants in a more vulnerable position, as they could feel prevented from denouncing abusive and/or exploitative working conditions for fear of losing their job and consequently their permit 96 . Ensuring some flexibility regarding a change of employer would thus limit the dependence of workers on their respective employers while lowering the risk of abuse by unscrupulous employers 97 . 

Another measure concerns extending the equal treatment rights under the Directive to beneficiaries of protection according to national law (2.11).

In those Member States 98 , which at present do not guarantee equal treatment rights to national protection status holders, the measure would indeed offer a higher level of protection from labour exploitation, as TCNs would, for example, be guaranteed equal working conditions and freedom of association. In these Member States, some impact may thus be expected, although the number of beneficiaries of a national protection status is relatively low (e.g. in 2019 less than 2,000 first permits were issued in these countries, no stock data is available). In all Member States, the measure would help to reduce legal uncertainty for these categories.

One of the key measures under this option is expanding the material scope of the Directive to include provisions relating to inspections, monitoring and sanctions against exploitative employers, similarly to the Seasonal Workers' Directive 2014/36/EU.

Since the Directive covers different categories of third-country workers, including low- and medium-skilled who may be more susceptible to exploitation, including specific provisions on employer sanctions similar to those included in the Seasonal Workers Directive will cover a much wider range of workers. It is also expected to strengthen the level playing field across Member States by prescribing specific processes and instruments to prevent, identify and sanction labour exploitation and thus, it is expected to contribute to the protection of all third-country workers covered by the scope of the Directive from labour exploitation.

All categories of stakeholders generally agreed on the need to improve the protection against labour exploitation through the Directive. At the same time, stakeholders representing the migrants underlined that an increased number of inspections could lead to even more underground work and exploitation 99 . In their view, instead of requiring more stringent inspections, clearer monitoring procedures implemented by all Member States could be a more practical solution. Although inspections represent the primary measure for tackling undeclared work of TCNs, they are often not as frequent and effective as anticipated by authorities. Consultations with legal migration practitioners 100 highlighted that introducing higher sanctions might have a counter-productive effect by increasing the reluctance from the employers’ perspective to hire TCNs.

Moreover, the consultation with the Legal Migration Contact Group showed that representatives of some Member States do not believe that the issue of exploitation can be tackled at EU level, as it is closely connected to the national labour market system or it should be tackled in other existing instruments, such as the Employer Sanctions Directive, which does not apply to legally residing TCNs. Similarly, some members of the EGEM group considered that the need for a European approach on protection against labour exploitation was disputable as rules for on protection, inspections, monitoring, and sanctions already existed at national level. In their view, more coordination between the European Labour Authority and the national labour law enforcement should be sufficient, including the exchange of information on different procedures and good practices. However, it should be noted that the mandate of the European Labour Authority is limited to ensuring fair and effective enforcement of the EU rules on labour mobility and social security coordination, thus it does not extend to labour exploitation of single permit holders, who are not exercising intra-EU labour mobility.

Finally, experts have also highlighted that any provisions should be aligned with the ILO's Convention on Forced Labour Protocol of 2014 to the Forced Labour Convention, 1930 to which many Member States are already signatories. 101

Expected impacts

Social impacts and impacts on fundamental rights

Businesses and employers may have to comply with new rules on prevention, inspections and sanctions against labour exploitation. Potentially tougher measures will contribute to preventing, detecting and sanctioning malicious practices of employers against TCNs. The measure is likely to have positive effects and strengthen the level playing field for law-compliant businesses, as it would deter unfair competition.

Expanding the personal scope of the Directive to beneficiaries of national protection and self-employed workers will require adaptation of legislation and practices in Member States. With regard to including provisions relating to inspections, monitoring and sanctions, some adjustment may be required in those Member States where the systems may require adaptation to meet the standards of the Directive.

Legal practitioners and judiciary at Member States and EU level are expected to benefit from the clarifications made with regard to the equal treatment provisions as improved clarity on a number of aspects is likely to facilitate their work, and reduce the extent to which third-country nationals may need to rely on legal advice.

Option 3 is expected to boost the equal treatment of TCN workers by clarifying some inconsistencies and ambiguities in the present Directive. Furthermore, by removing the link to one employer, Option 3 is expected to reduce dependency and the possibilities of labour exploitation by employers. In the Member States which currently do not guarantee the same level of equal treatment rights to the two categories of TCNs Option 3 suggests to add, these two categories of TCNs would benefit from enhanced and harmonised equal treatment rights. This would also help to better protect them against possible abuse and exploitation and improve their integration. Furthermore, establishing common provisions on inspections, monitoring, and sanctions against exploitative employers is expected to positively impact TCN workers. This would help protect TCN workers from labour exploitation by establishing or adapting relevant mechanisms in those Member States where the systems may require adaptation to meet the Directive's standards. Introducing such provisions in the Directive may help strengthen the current framework at EU level.

Option 3 may result in a moderate increase in the number of TCNs arriving to the EU as a result of improved rights (improved equal treatment and protection from labour exploitation and self-employed workers and beneficiaries of national protection included in the procedure). At the same time, the expected increase being moderate and subject to the control of Member State authorities my means of labour market tests, the impact on domestic labour markets is expected to be marginal. Considering that Option 3 will also likely lead to improved integration of TCN into the Member State of residence while contributing to more social cohesion, this, in turn, benefits both TCN and EU citizens. Displacement of EU workers is expected to remain marginal, given that the expected increase is very limited and the fact that Member States will continue having the option of conducting labour market tests to determine the number of TCNs entering their territory for work purposes and to ensure that the vacancies cannot be filled by EU workers.

Lastly, Option 3 is expected to contribute to improving equal treatment of TCNs, by achieving a level-playing field regarding their employment, and in terms of access to other benefits, such as family allowances, access to private housing, etc. This is expected to contribute to reducing downward pressure on wages and social dumping practices resulting from their vulnerable employment position, and as a result benefitting wider workforces. This may lead to fiscal benefits from tax collection.

As regards third countries (including negative effects such as brain drain), improved prevention of exploitation may positively affect remittances.

Measures under Option 3 are expected to strengthen equal treatment provisions and facilitate the prevention of exploitation, contributing to improving coherence with specific fundamental rights, such as: prohibition of slavery and forced labour (Article 5 of the Charter of Fundamental Rights); right to property (Article 17); equality (Article 20); fair and just working conditions (Article 31); family and professional life (Article 33 ) and social security and social assistance (Article 34).

Economic impacts

The key assumptions and calculation methods are detailed in Annex 4.

Measure 3.1 (de-linking permits from one employer) and 3.6 (including beneficiaries of national protection) and 3.7 (prevention against labour exploitation) may potentially have a measurable economic impact. The effects of 3.6 are expected to be marginal due to the small population size of beneficiaries of national protection. Measure 3.7 is expected to have a more significant economic impact in terms of reduction of grey and shadow economy from labour exploitation of third-country workers. Tackling exploitation is expected to reduce downward pressure on wages resulting from exploitation and social dumping practices (and as a result benefitting wider workforces). Further benefits include fiscal benefits from tax collection. The positive outcomes would include fairer payment and employers investing in fair working conditions, which may increase labour productivity in the medium to long run.

Reinforcing equal treatment provisions is expected to only marginally contribute to improving the attractiveness of the EU and may have some positive effect on the labour market and skills matching.

In order to provide a better understanding of the possible economic impacts resulting from the issuance of additional single permits for remunerated activities, on top of the baseline, a (cautious) two-step approach was adopted. First, a moderate increase of permits was assumed at the level of 5% (i.e. another 2.5% on top of Policy option 2). Then, on this basis, some quantifiable impacts were calculated (according to the methodology detailed in Annex 4), as an illustrative example of the possible size of effects over a period of 10 years rather than as firm predictable results of the proposed measures:

-An increase in tax revenue of about EUR 1.3 billion

-Increased additional earnings by about EUR 13.2 billion

-Increased consumption for about EUR 5.7 billion.

Resulting in a total economic benefit to the EU of approximately EUR 18.3 billion.

Remittances are expected to increase by around EUR 2.0 billion.

Efficiency

Administrative compliance costs

The administrative compliance costs of measure 3.2 clarifying the provisions on access to private housing are expected to be marginal. As part of policy measure 3.3 (equal treatment with regard to family benefits), an increase in transfer payments is expected in those Member States which also take into account family members of EU citizens residing outside the EU for family benefits Allowing third-country nationals to export family benefits in case their family members reside outside the EU, if in analogical case EU citizens are entitled to do so, stems directly from a recent Court of Justice judgment referring to Italian legislation 102 .

The judgement clearly states 103 that the objective pursued by the Directive is to establish “a minimum level playing field within the Union, to recognise that third-country nationals contribute to the EU economy through their work and tax payments, and to serve as a safeguard to reduce unfair competition between a Member State’s own nationals and third-country nationals resulting from the possible exploitation of the latter”.

To conduct a comprehensive impact assessment of such a measure, it is necessary to understand which countries allow the EU citizens to claim family benefit for an EU citizen if the family member does not live in the Member State territory. Data gathered showed that in five Member States (CY, FI, DE, PL, PT) the family members residing outside the EU are considered when calculating the amount of family benefits granted to EU nationals and legally staying third-country nationals. In the Netherlands, family members residing outside the EU are only provided with family benefits in the case of a bilateral agreement between the Netherlands and the country of residence.

It is not feasible to calculate the impact on social systems with the data currently available. The number of family members residing outside the EU is currently unknown.

However, this measure merely aims at setting out in the revised Single Permit Directive an obligation that Member States need to in any case respect and afford financially in the light of the Court’s case-law. 

With regard to measure 3.4 on removing the possibility of excluding visa holders from family benefits after the 6 months period allowed by the Directive, the majority of Member States already grant equal treatment with regard to family benefits after six months. Therefore the impact of this measure will be limited but it would increase legal certainty and bring into line the remaining Member States. To reinforce protection from labour exploitation, Member States are likely to incur administrative costs for implementing any adjustments in their national legislation. However, no detailed data is available to carry out such cost analysis. With regard to the cost impact to TCNs, given the hidden nature of the phenomenon of labour exploitation, any assumptions on this phenomenon would be too hypothetical.

In addition to the administrative costs of implementing a new legal provision, the expansion of material scope would result in some additional compliance costs for Member States, and possibly some cost savings for employers.

The cost analysis showed that the following average annual costs 104 (taken for cost figures between year 2021 to year 2030) would be incurred for Option 3 (please see Annex 4 for further details):

·One-off costs for national authorities: between EUR 1.9 million and EUR 7.0 million in Year 1

·Recurring costs for national authorities: between EUR 100,000 and EUR 12.4 million annually

·Recurring cost savings for national authorities: between EUR 200,000 and EUR 3.6 million annually

·Recurring cost savings for TCNs: between EUR 89.0 million and EUR 545.7 million annually

·Recurring cost savings for employers: between EUR 22.2 million and EUR 101.0 million annually.

Coherence with other EU policies

Overall, Option 3 is coherent with EU legal migration law and policy. Option 3 contributes to fulfilling the objective of the New Pact on Migration and Asylum of better enforcement of current legislation in the area of legal migration. It will also improve the coherence with the other legal migration directives by clarifying the categories falling outside the scope of application of the Directive.

Measure 3.1 (Ensuring the permits are not linked to only one employer) will also improve coherence as it is expected to offer similar conditions as the EU Blue Card (e.g. notification towards national authorities of a change of employer; new labour market testing conducted only in case of a change of profession; continued permit validity unless authorities object based on a negative labour market test or eligibility conditions no longer met). Overall assessment

Overall, this option is expected to positively impact the majority of stakeholders concerned, including employers, TCNs and national authorities (despite some cost adjustments needed in the short run). The main positive impacts of Option 2 are a further simplification and streamlining of the single procedure, clarification of the personal scope and strengthened equal treatment.

Including beneficiaries of national protection in the scope of the Directive would offer a greater degree of legal certainty and an enhanced set of rights for a category of TCNs, which in at least seven Member States are not fully treated equally.

With regard to expanding the material scope to include provisions relating to inspections, monitoring and sanctions against exploitative employers, this may help strengthen the current framework at EU level. Option 3 is expected to bring about positive change by setting up a level playing field for the prevention, protection and sanction against exploitation of a much wider range of workers than presently with such provisions regulated only for seasonal workers.

7.7.    How do the options compare?

The table below provides an overview of the ratings of the impacts of each policy option, on a score from -3 to +3 (-3 indicating the most negative impact, +3 indicating the most positive impact). It should be noted that, while these ratings allow for a comparison between options, the various ratings for a particular option cannot be cumulated since there is no objective basis to weigh one assessment criterion over another.

In the assessment of effectiveness, in line with the Better Regulation Guidelines 105 , PO0 is considered as the benchmark against which all other options are assessed and scored. Therefore, to the baseline situation is attributed the value of 0/nil for all effectiveness criteria, whereby “0” means no impact compared to the baseline.

In terms of effectiveness in achieving the objectives, the highest-scoring policy options are Option 2 and Option 3. Option 2 would be effective in achieving most of the objective of simplifying the procedure, however the effectiveness of enhancing equal treatment of migrant-workers via non-legislative actions is expected to have a modest effect due to its non-binding nature. Option 3 would have stronger similar effect on achieving the objectives, as legislative amendments aimed at enhancing equal treatment of migrant-workers and improving protection of TCNs from labour exploitation are expected to bring more legal certainty and tangible results than the soft law measure. Finally, Option 1 would generally have a very limited impact on achieving the objectives of the revision due to the voluntary nature of the non-legislative actions. While guidelines could help improve the practical implementation of the Directive, measures under Option 1 remain not binding and their outcomes are highly dependent on the willingness of Member States to follow guidelines and adapt administrative practices.

As regards social impacts, different categories of stakeholders were considered as part of the assessment and the scoring reflects the cumulative social impacts of each policy option, considering all categories of stakeholders together. Each policy option with the exception of PO0 would, to a greater (Option 2 and Option 3) or lesser (Option 1) extent, achieve a positive impact on TCNs, particularly when simplifying admission procedures, reducing legal uncertainty and boosting equal treatment. Reducing TCNs’ dependency on the employer while also lowering the possibilities of labour exploitation by abusive employers would be another important benefit. For these reasons, Options 2 and 3 would have a very favourable impact on TCNs and employers, given that they aim at streamlining the single permit procedure and increasing protection from labour exploitation. All legislative options would potentially simplify the work of national authorities, who would gain important efficiencies when processing applications. All the options would also reduce reliance on legal practitioners, leading to a reduction in the demand for their services by TCNs and employers alike. At the same time, none of the policy options proves problematic in terms of social impacts.

None of the policy options is expected to have significant environmental impacts.

Most options (with the exception of PO0 which would not result in any changes to the current situation) would also positively impact fundamental rights, with Option 3 having [a significantly stronger additional impact compared to Option 2 due to the legislative, and thus binding, nature and legal certainty that the latter is expected to bring about. Particularly relevant articles impacted by most of the policy options are the prohibition of slavery and forced labour (Article 5), the right to property (Article 17), equality (Article 20), family and professional life (Article 33) and social security and social assistance (Article 34).

Regarding coherence with other EU policies and the New Pact on Migration and Asylum Pact, Option 2 and 3 are most in line with the spirit of the New Pact, which calls for boosting the attractiveness of new legal migration channels. Both policy options address a number of inconsistencies highlighted in the Fitness Check study and are expected to create closer synergies with other EU policies, including other EU legal migration Directives (notably for PO2), and with the ‘spirit’ of the EU Charter on Fundamental Rights (specifically for PO3).

In terms of economic impacts, both Option 2 and Option 3 would have a positive impact. The key areas in which the POs are expected to contribute positively to economic impact are tax revenue, increases in earnings and consumption (please see Annex 4 for details). Both Option 2 and Option 3 are also expected to increase remittances flows. The economic impacts of Option 3 are more significant, as it is expected to make the EU more attractive for migrants and enhance their living conditions.

In terms of administrative compliance costs, all policy options other than PO0 and Option 1 are expected to have a negative effect on administrative costs for national authorities, as they will have to transpose the new legislation, organise training and guidance, implement new and revised procedures, organise communication and information activities, etc.

With regard to principles of subsidiarity and proportionality, the proposed measures in the legislative options 2 and 3 would be limited to those aspects that Member States cannot achieve satisfactorily on their own, and the administrative burden on stakeholders would not be disproportionate vis-à-vis the objectives to be achieved, also because those measures would only update or complement the already existing procedures. In particular, the required adaptations in the administrative procedures by Member States are considered proportionate in view of the envisaged improvements in the situation of third-country nationals, more opportunities for employers, and simplification for national administrations.

As regards measures against labour exploitation, by prescribing specific common processes and instruments to prevent, identify and sanction labour exploitation, Option 3 would contribute to the protection of all third-country workers covered by the scope of the Directive from labour exploitation, thus expanding the group currently covered by these safeguards at EU level from seasonal workers only and contributing to strengthening the level playing field across Member States. 

Finally, with regard to the political feasibility, the fact that Option 1 would not require legislative amendments would be met with favour by those Member States not wanting further legislation on legal migration 106 , but would contradict the call of the European Parliament to improve the Directive.

Option 2 and Option 3 would both require legislative amendments. Regarding Option 2, the majority of stakeholders consulted 107 perceived a need to simplify the single permit procedure further, including civil society, practitioners, migrant representatives, and economic and social partners. Member State representatives, although less convinced about the need for a substantial overhaul of the Directive, were aware of the shortcomings of the Directive and agreed that the application procedure could be further simplified to avoid unnecessary administrative burdens and thus, political agreement on Option 2 is likely to be feasible.

Regarding Option 3, more opposition from Member States on certain measures could be expected in comparison to Option 2. Most Member States 108 considered that the link to a single employer remained necessary, at least in the first one or two years, as the single permit is granted to fill a specific gap in the labour market. Regarding the measures aimed at clarifying the scope of equal treatment provisions in Article 12 of the Directive, Member States have acknowledged the benefits of enhancing legal certainty and further clarification. The majority of Member States also supported the idea of strengthening EU rules to prevent labour exploitation, albeit some considered that this issue was better tackled at national level.

It can be expected that all elements of both Option 2 and Option 3 would be supported by the European Parliament.

8.8.    Preferred option

After the assessment of the impacts, effectiveness and efficiency of the POs, as well as of their political feasibility and stakeholder acceptance, the preferred option is Option 3. Option 3 involves a large set of policy measures that would address existing shortcomings of the Directive and further simplifying and streamlining the single application procedure, strengthening equal treatment rights, as well as further improving coherence of the Directive with the wider EU legal migration acquis by clarifying what categories of third-country workers are not covered by the Directive. In this respect, Option 3 responds partly to Suggestion 1 of the opinion of the Fit for Future Platform proposing to streamline and digitalise the single permit application and visa applications to reduce the administrative burden and costs on applicants and on authorities. In addition, Option 3 expands the personal scope of the Directive to beneficiaries of protection under national law who are currently not fully covered by equal treatment rights, and the material scope of the Directive to include provisions relating to inspections, monitoring and sanctions against exploitative employers.

The impact assessment showed that Option 3 will be highly effective in achieving the objectives and will benefit from good political feasibility (based on the views expressed as part of the stakeholder consultations). Option 3 would also clarify and slightly expand the scope of the current Single Permit (i.e. to beneficiaries of protection under national law), as well as strengthen the rights of TCNs. Option 3 furthermore has the potential to bring strong societal benefits: including beneficiaries of national protection in the scope of the Directive would offer a greater degree of legal certainty and an enhanced set of rights for a category of TCN who currently do not, or only to some extent, benefit from equal treatment. It would also contribute to reinforcing the protection of all third-country workers covered by the Directive against exploitation, i.a. by introducing the possibility to change employers. In that respect, Option 3 would respond well to Suggestion 2 of the opinion of the Fit for Future Platform, recommending to simplify procedures on change of employer and thus increase ownership of workers. Therefore, Option 3 strikes a good balance between extending the personal and material scope and further simplification.

The preferred option aims at further clarification and simplification to ensure more efficient procedures and improved equal treatment in employment-related fields for workers admitted to the Member States, but it does not interfere with Member States' competence to define the content of the actual rights or with their internal procedures for handling an application.

The estimated costs (excluding cost savings) of the preferred option are as follows:

·One-off costs for Member State authorities are expected to range between EUR 2.0 million and EUR 7.0 million (or an average of EUR 2.0 million) in year 1 of the implementation of the preferred option.

·Recurring costs for Member State authorities are expected to range between EUR 100,000 and EUR 12.0 million (or an average of EUR 2.0 million) annually.

Total cost-savings, as also presented below, are estimated to amount to:

·Between EUR 200,000 and EUR 4.0 million annually for Member State authorities (or an average of EUR 700,000 annually).

·Between EUR 22.0 million and EUR 101.0 million (or an average of EUR 26.0 million) annually for employers. These estimates are equally dependent on the number of third-country nationals expected to apply for a permit – savings relate to reduced fees associated with applications, reduced time spent on applications and a reduction in other application-related fees.

·Between EUR 89.0 million and EUR 546.0 million (or an average of EUR 121.0 million) annually for TCNs (these estimates are wide-ranging as they are highly dependent on the number of TCNs expected to apply for a permit – savings relate to reduced fees associated with applications, reduced time spent on applications, reduced travel costs, reduced intermediary fees, etc.)

In order to provide a better understanding of the possible economic impacts resulting from the issuance of additional single permits for remunerated activities, on top of the baseline, a (cautious) two-step approach was adopted. First, a moderate increase of permits was assumed to range between 2.5% and 5% as a reasonable interval. Then, on this basis, some quantifiable impacts were calculated (according to the methodology detailed in Annex 4), as an illustrative example of the possible size of effects rather than as firm predictable results of the proposed measures:

-An increase in tax revenue of about EUR 1.3 billion.

-Increased additional earnings by about EUR 13.2 billion.

-Increased consumption for about EUR 5.7 billion.

Resulting in a total economic benefit to the EU of approximately EUR 18.3 billion.

Remittances are expected to increase by around EUR 2.0 billion.

8.1.8.1.    REFIT (simplification and improved efficiency)

8.2.8.2.    One in, one out approach 

This section describes the expected impacts of the preferred option on EU businesses and citizens.

§Impacts on EU businesses

Quicker access to labour resources from third countries. Businesses/employers are expected to benefit from Option 2 in terms of quicker, and potentially wider, access to labour resources from third countries. The streamlining of the procedure could also encourage more employers to hire third-country workers. Any simplifications in the application process are expected to benefit SMEs as they are likely to bear a disproportionate burden when hiring TCNs in comparison to large enterprises due to more limited resources (e.g. legal fees, understanding of immigration law and process, etc.).

Cost savings. A streamlined and simplified procedure for single permit applications would result in a number of cost savings for employers. In addition, indirect and opportunity costs are likely to decrease. For example, the overall shorter procedures would mean that the third-country workers would commence their job sooner, which in turn could lead to more efficiency on the labour market in terms of greater job matching and shortages filled, as well as potential increases in productivity. This will also result in fiscal benefits in terms of tax contributions.

Compliance costs with new rules on labour exploitation. Businesses and employers may have to comply with new rules on prevention, inspections and sanctions against labour exploitation. Potentially tougher measures will contribute to preventing, detecting and sanctioning malicious practices of employers against TCNs. The measure is likely to have positive effects and strengthen the level playing field for law-compliant businesses, as it would deter unfair competition.

The preferred option is not expected to entail significant costs (other than possible limited compliance costs) or disadvantages for EU businesses vis-à-vis the status quo. On the other hand, cost-savings of between EUR 22.2 million and EUR 101.0 million (or an average of EUR 26.0 million) annually are estimated for employers. These estimates are dependent on the number of third-country nationals expected to apply for a permit – savings relate to reduced fees associated with applications, reduced time spent on applications and a reduction in other application-related fees.

§Impact on EU citizens

Marginal impact on the displacement of EU workers, more social cohesion. The preferred option may result in a moderate increase in the number of TCNs arriving to the EU as a result of improved rights (improved equal treatment and protection from labour exploitation and self-employed workers and beneficiaries of national protection included in the procedure). At the same time, the expected increase being moderate and subject to the control of Member State authorities my means of labour market tests, the impact on EU citizens and domestic labour markets is expected to be marginal. Considering that the preferred option will also likely lead to improved integration of TCN into the Member State of residence while contributing to more social cohesion, this, in turn, benefits both TCN and EU citizens. Displacement of EU workers is expected to remain marginal, given that the expected increase is very limited and the fact that Member States will continue having the option of conducting labour market tests to determine the number of TCNs entering their territory for work purposes and to ensure that the vacancies cannot be filled by EU workers.

Reducing downward pressure on wages and social dumping. Lastly, the preferred option is expected to contribute to improving equal treatment of TCNs, by achieving a level-playing field regarding their employment, and in terms of access to other benefits, such as family allowances, access to private housing, etc. This is expected to contribute to reducing downward pressure on wages and social dumping practices resulting from their vulnerable employment position, and as a result benefitting wider workforces. This may lead to fiscal benefits from tax collection.

The preferred option is not expected to entail any costs or disadvantages for EU citizens vis-à-vis the status quo.

9.9.    How will actual impacts be monitored and evaluated?

The monitoring and evaluation of the revised Directive will need to be assured at all stages of the policy cycle (including implementation, application and evaluation), assessing progress and achievements against the specific objectives: 

·To simplify admission procedures;

·To ensure greater efficiency of application procedures for TCNs;

·To address EU labour shortages;

·To enhance equal treatment of TCNs with EU citizens;

·To protect third-country national workers from labour exploitation.

At the implementation stage, as for all other recasts and new directives, the Commission is expected to organise contact committee meetings with the EU-25 Member States to discuss and clarify any issues that may arise during the transposition phase. 

Once the transposition period has expired, the Commission will launch a conformity assessment of the transposition of the amended Directive into national laws in all EU-25. 

In addition, the Commission will present a report evaluating the implementation, functioning and impact of the directive approximately two or three years after the transposition deadline and every three or four years thereafter. These reports will thus also play a key role in the next phase, namely the application stage.  

During the application stage, the practical implementation and functioning of the amended Directive will be monitored against the specific objectives as listed above, using a series of relevant and measurable outcomes. It will be important to ensure that the indicators can be measured through methods and sources which are easily available and credible. Eurostat statistics and official national statistics should be used as much as possible to monitor the number of single permits issued, while existing EU agencies and networks, such as the European Migration Network, can be used to undertake punctual research into themes related to single permit.  

To obtain stakeholder views, the Commission could consider launching a Special Barometer or a Public Consultation to obtain both quantitative and qualitative inputs. It will also be key for the Commission to continue making use of the existing expert groups who have also been contributing to the impact assessment study. Finally, additional research may also be procured, where considered necessary, through public tendering. 

Indicators to monitor progress made towards the objectives of the initiative have been identified on the basis of the preferred policy option. The subsequent monitoring and evaluation of the Directive are important to assess its efficiency and effectiveness in addressing the underlying problems and meeting policy objectives. The table below includes a proposed list of indicators that could be used to assess the progress and effectiveness of the preferred option in achieving the main policy objectives, as well as methods of data collection.

Annex 1: Procedural information

10.10.    Lead DG, Decide Planning/CWP references

DG Migration and Home Affairs (DG HOME) is the lead DG. The agenda planning reference is PLAN/2021/11127.

11.11.    Organisation and timing

The Communication for the New Pact on Migration and Asylum of 23 September 2020 111 announced, among various initiatives, a revision of the Single Permit Directive, in order to look at ways to simplify and clarify the scope of the legislation, including admission and residence conditions for low and medium skilled workers and to address the shortcomings identified under the Fitness Check on Legal Migration and its implementation report.

Additionally, the 2021 Commission Work Programme announced on 19 October 2020 that the revision of the Single Permit Directive is part of the number of measures to be proposed on legal migration 112 . The proposal is included in the Commission Work Programme (Annex II), under the Commission priority “Promoting our European Way of Life”. 113  

The Inception Impact Assessment report was published on [XXX] 2021.

The Inter-service Steering Group was set up by the Secretariat-General to assist in the preparation of the initiative. The representatives of the following Directorates General participated in the ISG work: BUDG, EAC, ECHO, EMPL, ESTAT, GROW, INTPA, DIGIT, EEAS, RTD, HR, JRC, NEAR, MOVE, AGRI, JUST, TAXUD, Legal Service.

The ISG met three times on 26 November 2020, 7 May 2021 and 30 August 2021.

12.12.    Consultation of the RSB

On 22 September 2021, the Directorate-General for Migration and Home Affairs submitted the draft Impact Assessment to the Regulatory Scrutiny Board, which examined the draft Impact Assessment on 20 October 2021. The Board issued a positive opinion with reservations on 25 October 2021. The Board pointed to a number of elements of the impact assessment that should be addressed. The table below summarises the main recommendations for improvement, and how they have been addressed in this Impact Assessment report.

13.13.    Evidence, sources and quality

As detailed in Annex 2, the Impact Assessment is based on a series of studies, reports, stakeholders and experts' consultations, of which the most relevant ones are highlighted below.

A wide consultation, including a public consultation, was already conducted in the context of the Fitness Check on EU legislation on legal migration 114 published in 2019, which was supported by a study conducted by an external consultant.

Between 23 September and 30 December 2020, another online public consultation on the future of legal migration was conducted via the Commission’s ‘Have your say’ portal 115 .

Targeted consultations, asking more technical questions on the revision of the Directive, took place in the first half of 2021. Some of these consultations were carried out by the Commission independently and some in the context of a study commissioned to an external contractor.

Replies to the two above-mentioned public consultations came from EU citizens, organisations and TCNs (residing inside or outside the EU), business associations and organisations, non-governmental organisations, academic/research institutions, trade unions, ministries, public service entities. Targeted consultations included competent authorities in the Member States, business associations and organisations, non-governmental organisations, academia, think tanks and public service entities. The replies to the consultations gave a very comprehensive overview of the main problems in the functioning and implementation of the Directive. The Inception Impact Assessment collected the feedback both from the public consultation and targeted consultations.

Taken together, the consultations carried out by external consultant and the Commission independently have generated a good amount of data. However much of this data is of a general nature, especially with regard to questions of costs/administrative burdens. For this reason, the Impact Assessment relies on a qualitative methodology capable of accommodating quantitative measures and reflecting quantitative estimates from other sources. The cost estimates that are provided in the Impact Assessment are based on a combination of factors, including representative data on costs provided by certain Member States and stakeholders.

The analysis presented here has been partly constrained by limitations in data availability. The Covid-19 pandemic had a negative impact and caused distortions on the incoming migration flows and the intra-EU mobility, with led to a limited amount of reliable migration statistics for the years 2020-2021. Therefore, it was more difficult to estimate and quantify the potential impacts of the policy options and of various factors that influence the attractiveness and labour migration flows, e.g. entry requirements, level of rights and the (real or perceived) "burdens".

Annex 2: Stakeholder consultation

This annex provides a synopsis report of all stakeholder consultation activities undertaken in the context of this Impact Assessment.

1.Consultation strategy

The overall aim of the consultation activities was to collect the views of the relevant stakeholders on the policy initiatives in the area of legal migration at both national and EU level and to offer them the opportunity to inform the impact assessment and, in particular, the development of policy options addressing the problems identified. The consultations sought to collect inputs pertaining to:

(1)collect objective data, information, and evidence to feed into the Impact Assessments;

(2)collect views on the issues at stake and suggested EU involvement, as well as opinions, ideas and concerns about possible solutions and impacts.

In preparing the initiative, Commission services carried out an initial mapping of primary stakeholders, which include: (i) EU institutions and agencies; (ii) relevant authorities in the EU Member States; (iii) networks of NGOs working at the EU level; (iv) subject-matter experts; (v) economic and social partners; (vi) trade unions; (vii) international organisations and (vii) employers’ associations.

Over the course of the consultation process, Commission services used a variety of methods and forms of consultation, which included:

·Targeted consultations with stakeholders both independently and as part of the study that supported the development of this Impact Assessment.

·An opportunity for all interested parties to provide feedback on the Inception Impact Assessment via the Commission’s ‘Have your say’ platform;

The study was commissioned by the Commission’s Directorate-General for Migration and Home Affairs (DG HOME) and conducted by an external contractor.

More specifically, a wide consultation process, including a public consultation, was already conducted in the context of the Fitness Check on EU legislation on legal migration 116 published in 2019, which was supported by a study conducted by an external consultant. Subsequently, between 23 September and 30 December 2020, another online public consultation on the future of legal migration was conducted via the Commission’s ‘Have your say’ portal 117 . In total, 226 responses were received to the questionnaire and 38 written contributions from a wide range of actors representing all relevant stakeholders 118 . This public consultation aimed to identify areas where the EU framework on legal migration could be further improved, including through possible new legislation. It included questions relevant for the revision of both the Long-term residents Directive and the Single permit Directive.

The majority of respondents' views to this consultation were aligned that the EU should take both new legislative and practical measures in the area of legal migration. Improving the information on legal pathways (92% or 208 out of 226 total responses), improving systems to recognise professional qualifications and validate professional skills acquired (92% or 207 responses) and the support in the exchange of good practices (87% or 197 responses) were perceived as the most prominent practical measures that the EU should focus its initiatives on.

The European Union may, in the coming years, face shortages in certain occupations that may create the need to recruit third-country workers, also taking into account the economic impact of the COVID-19 crisis. In spite of the short-term economic impact due to the COVID pandemic, it is expected that some of these - structural - shortages will persist in the medium and long term. Respondents considered that health professionals (77% or 175 respondents) were the top shortage occupation; followed by personal care workers (68% or 154 respondents), agricultural, forestry and fishery labourers (58% or 132 respondents) and information and communications technology professionals (51% or 115 respondents).

Another key theme explored by the Public Consultation was the protection of third-country workers' rights and fighting against their exploitation. A majority of respondents strongly agreed or agreed on the importance of developing horizontal EU rules on labour inspections and employers' sanctions (77% or 174 respondents) and with the idea that through public employment services and the involvement of third-country workers into the labour market policies the EU should encourage the development of targeted support measures (74%, or 168 responses). A majority of respondents agreed or strongly agreed that the EU should strengthen its current rules to sanction those employing and exploit irregular migrants, with 73% (or 166 responses).

In light of the consultations already conducted, no dedicated public consultation took place in the framework of this impact assessment.

Targeted consultations were however organised in the first half of 2021, with the purpose to cover more technical questions compared to the ones included in the public consultations. In particular, they helped defining the policy options and assessing their impact.

This synopsis report presents a succinct overview and the conclusions of the consultations undertaken in relation to the impact assessment on the revision of the Directive. The main results are summarised below and, where appropriate, referenced and taken into account in the Impact Assessment report.

2.Overview of the consultations

A number of targeted consultation meetings were held in 2021 as part of the study in support of the Impact assessment on the revision of the Directive.

·1 March: the Portuguese presidency of the Council of the EU held a Working Party on Integration, Migration and Expulsion, to have an exchange of views on the legislative initiatives in the field of legal migration, where the Commission also presented the results of the public consultation.

·2 March: meeting of the newly established Expert Group on the Views of Migrants in the field of Migration, Asylum and Integration.

·10 March: meeting of the European Network of Public Employment Services.

·14 April: meeting of the Commission Informal Expert Group on Economic Migration (EGEM).

·20 April: meeting with representatives of the Civil Society.

·29 April: meeting of the EU Legal Migration Practitioners Network.

·5 May: meeting with Economic and Social Partners.

·18 May: meeting of the Contact Group on Legal Migration.

·Ad hoc queries were also launched in the framework of this impact assessment to the members of the European Migration Network 119 .

Ad hoc queries were also launched in the framework of this impact assessment to the members of the European Migration Network 120 .

During all targeted meetings, the Commission presented the Single Permit Directive's main objectives and proposed a discussion on several shortcomings highlighted in the Fitness Check on legal migration and the implementation report carried out it 2019. In addition, the discussions focused on the main concerns relating specifically to the subject matters regulated by the Directive, as well as recommendations to address them. Topics and areas discussed included:

·The simplification of the single application procedure (including place of application, timeframes, labour market tests, the digitalisation of the application procedure and the duplication of effort between authorities);

·The right to equal treatment (including access to housing and family benefits);

·The exclusion of categories of TCNs from the scope of the Directive (namely, self-employed, posted and seasonal workers);

·The absence of a harmonised EU instrument for admission of medium- and low-skilled workers;

·The need for protection of TCNs against labour exploitation (including the topic of dependency on a single employer, as well as provisions relating to inspections, monitoring and sanctions against exploitative employers).

An overview of the results and main points raised during the seven targeted consultations can be found in section 2 below.

3.Results

Need for simplification of the single application procedure

The majority of stakeholders 121 perceived a need to simplify the procedure further to acquire a single permit. On the other hand, most representatives from the Contact Group on Legal Migration do not consider that further simplification of the single application procedure is needed, while only three perceived the opposite.

The main point shared by representatives from the Contact Group on Legal Migration, the EU legal migration practitioners' network and the Informal Expert Group on Economic Migration is that the application procedure should be further simplified to avoid unnecessary administrative burden linked to a duplication of effort between authorities.

Concerning labour market tests, representatives from the European Public Employment Services network, the Economic and Social Partners and the EU legal migration practitioners network specified that, while they do not fall under the scope of the Directive, labour market tests often further increase the time to process the single permit application. In addition, most members of the Contact Group on Legal Migration considered that labour market tests should only be regulated at the national level, with one representative suggesting that the period time needed to conduct the labour market tests should not be counted in the timeframe within which the single permit application should be processed and another expressing the view that that the time to conduct the tests should be reduced.

Regarding timeframes, representatives from the Economic and Social Partners, the Contact Group on Legal Migration, the European Public Employment Services network, the Informal Expert Group on Economic Migration and the EU legal migration practitioners network perceived that a limited timeframe to process single permit applications should be included in the revision of the Directive as the current processing times are too long. In addition, representatives from the Civil Society and the Economic and Social Partners recommended introducing a minimum validity period of the permit to ensure stability for both employers and employees.

In addition, representatives from the Economic and Social Partners, the Contact Group on Legal Migration, Civil Society and the Informal Expert Group on Economic Migration shared the view that the digitalisation of the application procedure could be a solution to simplify administrative processes. A representative from the Contact Group on Legal Migration suggested also introducing residence permits in digital form. Members from the Civil Society underlined that digitalisation should be implemented as early as possible in the application process to avoid requesting information or documentation twice (visa and single permit) from the applicant or the employer.

Concerning the place of application, representatives from the Economic and Social Partners, the Commission Expert Group on the Views of Migrants, Civil Society and the EU legal migration practitioners' network expressed the view that the revised Directive should include the possibility for TCNs already residing in a Member State to apply for a permit directly in that Member State.

Equal treatment

Regarding the right to equal treatment, representatives from the Civil Society and the Economic and Social Partners perceived that among the key challenges is the lack of implementation of some parts of the Directive and the possibility to exclude certain aspects of social protection. In this sense, Civil Society representatives underlined that the creation of consistency in the area of social security and social assistance rights requires a horizontal approach and not a step-by-step approach in each individual Directive.

In addition, the Commission Expert Group on the Views of Migrants underlined a need to explicitly include in the Directive the possibility to open a procedure against national authorities in discrimination cases. It was also recommended that the lack of enforcement of the Directive in terms of equal treatment should be addressed by including an "accountability mechanism", which includes a conformity assessment and work with contact groups on the monitoring of its implementation.

Finally, a representative from the EU legal migration practitioners' network reported that regarding equal treatment in the area of housing in their Member State, access is limited as only persons with a permanent address may be eligible to make use of public housing opportunities, while TCNs who have a single permit, are automatically excluded from public housing opportunities. Members of the network also underlined that the situation of family members of single permit holders needs to be addressed in the revised Directive. In some cases, family members of single permit holders are not entitled to access a Member State's healthcare system and have to therefore subscribe to private insurance policies that might have insufficient coverage. It was also recommended that the revised Directive clarifies the situation where single permit holders are not entitled to be accompanied by their underage children.

Exclusion of categories of TCNs

Views on the inclusion of self-employed TCNs in the scope of the Directive varied among stakeholders. According to representatives of the Commission Expert Group on the Views of Migrants and of the Informal Expert Group on Economic Migration, the definition of self-employed workers is not clear and should be clarified before extending the scope of the Directive 122 .

A number of stakeholders supported the idea of extending the scope of the Directive to self-employed TCNs 123 . In particular, representatives from the EU legal migration practitioners' network underlined that because self-employed TCNs are excluded from the scope of the Directive, this creates situations where the latter are compelled to enter fake employment contracts. In addition, a representative from the Contact Group on Legal Migration highlighted that the possibility to include self-employed workers in the scope of the Directive should be done on a case-by-case basis. Nevertheless, while all Civil Society representatives agreed that attracting self-employed TCNs would have EU added value, some suggested being cautious, as, in situations where there is no regular pathway to access employment, TCNs might choose to apply as self-employed when they are actually employees, which lead to further abuse and exploitation.

Among those that opposed the idea of revising the scope of the Directive to include self-employed TCNs, representatives from the European Public Employment Services network underlined that this category should remain regulated at the national level. In addition, members of the Contact Group on Legal Migration pointed out that the category of self-employed workers covers a wide range of working fields, making it difficult to harmonise legislation in this area and that the latter could be covered by the Blue Card Directive or the Long-term Residents Directive.

Concerning other categories excluded from the scope of the Directive, representatives from the Informal Expert Group on Economic Migration and the Contact Group on Legal Migration considered that the Directive should also include posted workers to harmonise procedural rights. In addition, Economic and Social Partners perceive that the exclusion of seasonal workers from the scope of the Directive needs to be also addressed.

Absence of a harmonised EU instrument for admission of medium- and low-skilled workers

Views on the conditions for medium and low-skilled workers varied among stakeholders. Representatives from the Commission Expert Group on the Views of Migrants perceived that there is a need to further simplify the single permit procedure by introducing a single set of admission conditions for low and middle-skilled TCN workers in the Directive. In addition, while some members of the Economic and Social Partners supported the idea of facilitating the procedures for these categories of workers, stressing the importance of simplifying their admission in view of skills shortages, others argued that the EU already attracts low and middle-skilled workers and hence there is no need for further facilitation of the procedures. With the exception of one Member State, most representatives from the Contact Group on Legal Migration perceived that no change is needed regarding the admission conditions for low and medium-skilled workers as they are already covered by the Directive. It was further elaborated that in all categories, no differentiation should be made between low, medium, and high-skilled TCN workers, a view also supported by the Commission Expert Group on the Views of Migrants. Representatives from the Informal Expert Group on Economic Migration shared the view that there is no need to have a common approach to proactively attract low and medium-skilled workers and that a sectoral approach could be explored in the case of these workers, underlining that it would be relevant to decide at EU level which are the sectors where the issuance of the permit would benefit from more streamlined procedures. Finally, members of the Civil Society considered that the ILO classification concerning the low and medium-skilled workers should be re-evaluated, with some representatives advising to avoid these terms as they carry a negative connotation. 

Protection against labour exploitation

The majority of stakeholders 124 perceived that, in terms of protection against labour exploitation, the topic of permits being issued and valid in relation to a single employer should be addressed in a future revision of the Directive.

Among the issues underlined by stakeholders in relation to the dependency on a single employer are the increased vulnerability of TCNs as it could prevent them from complaining about abusive working conditions (Commission Expert Group (EG) on the Views of Migrants; Informal Expert Group on Economic Migration; Economic and Social Partners), the loss of the single permit when TCNs lose their jobs (Economic and Social Partners; EU legal migration practitioners' network) and preventing employees from changing employers and evolving within the same company (EU legal migration practitioners network).

In this sense, representatives from the Commission Expert Group on the Views of Migrants, the EU legal migration practitioners' network and the Economic and Social Partners shared the view that the revised Directive should introduce a period of time during which unemployed TCNs are allowed to look for other opportunities without risking to lose their permit. In addition, members of the Civil Society and the Economic and Social Partners highlighted that it is important to ensure the possibility of changing employers, which should allow a change of occupation and employment sector.

On the other hand, most Contact Group members on Legal Migration considered that the link to a single employer is necessary, highlighting arguments such as the fact that the single permit is granted to fill a specific gap in the labour market and that labour migration is demand-driven. Nevertheless, two members saw room for more flexibility, underlining that the link to a single employer imposes a burden on immigration authorities in the event of a change of employer and suggests that the transfer of "responsibility" to another employer changes jobs is facilitated.

Views on the provisions relating to inspections, monitoring and sanctions against exploitative employers varied among stakeholders. For instance, some representatives from the Informal Expert Group on Economic Migration considered that the need for a European approach to protection against labour exploitation is disputable as there are already rules at the national level for the protection, inspections, monitoring, and sanctions. Moreover, more coordination between the European Labour Authority and the National Labour law enforcement should be enough. Other members shared the view that concerns about exploitation could also be addressed in the context of the revision of the Directive, suggesting that the different procedures and good practices of Member States are embedded in the revised Directive. In addition, representatives from the Commission Expert Group on the Views of Migrants, the EU legal migration practitioners' network, the Economic and Social Partners and the Contact Group on Legal Migration expressed concerns regarding increasing inspections and sanctions, as this could have a negative effect on TCNs as it might lead to more underground work and exploitation or make employers reluctant to hire a TCN. With regard to monitoring mechanisms, members of the Commission Expert Group on the Views of Migrants expressed the view that NGOs and trade unions should be included in monitoring and evaluation mechanisms, while the Economic and Social Partners underlined that specific attention should be paid to professions for which a monitoring system is difficult to implement, such as domestic workers in private households.

1.Direct feedback on the inception impact assessment

Direct input received on the inception impact assessment stressed the need for streamlined and efficient procedures, stability and legal certainty for migrant workers, possibility of lodging in-country applications. Civil Society representatives expressed concerns regarding a full amendment of the Directive due to the risk that Member States might suggest modifications which would entail more restrictive measures.

2.Conclusion

The findings from the targeted consultation meetings showed several shortcomings that need to be addressed in the revised Directive, according to stakeholders.

Regarding the single application procedure, the majority of stakeholders perceived a need to simplify the procedure further to acquire a single permit. Among the points raised by representatives in favour of simplifying the single application procedure were:

·Simplifying the application procedure could prevent the unnecessary administrative burden linked to a duplication of effort between authorities.

·Regarding labour market tests, the view was raised by some representatives that they often further increase the time to process the single permit application and that they should only be regulated at the national level.

·A limited timeframe to process single permit applications should be included in the revision of the Directive as the current processing times are too long.

·The digitalisation of the application procedure could be a solution to simplify administrative processes.

·Concerning the place of application, representatives expressed the view that the revised Directive should include the possibility for TCNs already residing in a Member State to apply for a permit directly in that Member State.

Concerning the right to equal treatment, representatives perceived that among the key challenges is the lack of implementation of some parts of the Directive and the possibility to exclude certain aspects of social protection. Among the recommendations shared by stakeholders were undertaking a horizontal approach in the area of social security and social assistance and addressing the lack of enforcement by including an "accountability mechanism".

In addition, the definition of self-employed workers is not clear and should be clarified before extending the scope of the Directive according to some stakeholders. Those who supported the idea of extending the scope of the Directive to self-employed TCNs underlined that under the current situation, these workers are compelled to enter fake employment contracts. Among those that opposed the idea of revising the scope of the Directive to include self-employed TCNs, it was highlighted that this category should remain regulated at the national level. Some stakeholders also perceived that the Directive should also include posted workers to harmonise procedural rights and that the exclusion of seasonal workers from the scope of the Directive needs to be also addressed.

Views on the conditions for medium and low-skilled workers varied greatly among stakeholders, with some perceiving there is a need to further simplify the single permit procedure by introducing a single set of admission conditions for these workers in the Directive. Other stakeholders argued that the EU already attracts low and middle-skilled workers and hence there is no need for further facilitation of the procedures. Another point shared on the topic underlined that no differentiation should be made between low, medium, and high-skilled TCN workers. Stakeholders also shared the recommendation to undertake a sectoral approach in the case of these workers, underlining that it would be relevant to decide at EU level which are the sectors where the issuance of the permit would benefit from more streamlined procedures.

Finally, in terms of protection against labour exploitation, the topic of permits being issued and valid in relation to a single employer should be addressed in a future revision of the Directive according to stakeholders, who underlined issues such as the increased vulnerability of TCNs, the loss of the single permit when they lose their jobs and the inability to change employers and evolve within the same company. It was also recommended that the revised Directive introduces a period of time during which unemployed TCNs are allowed to look for other opportunities without risking losing their permit and that it ensures the possibility of changing employers, which should allow a change of occupation and employment sector. Among those who considered that the link to a single employer is necessary, arguments such as the issuance of a single permit in relation to a specific gap in the labour market and demand-driven labour migration were raised.

Views on the provisions relating to inspections, monitoring and sanctions against exploitative employers also varied among stakeholders, with some considering that the need for a European approach to protection against labour exploitation is disputable as there are already rules at the national level for the protection, inspections, monitoring, and sanctions. Other stakeholders shared the view that concerns about exploitation could also be addressed in the context of the revision of the Directive, suggesting that the different procedures and good practices of Member States are embedded in the revised Directive. Concerns regarding increasing inspections and sanctions were expressed, underlining the possible negative effects on TCNs. It was finally recommended that NGOs and trade unions are included in monitoring and evaluation mechanisms.

Annex 3: Who is affected and how?

14.14.    Practical implications of the initiative

Third country nationals already residing in, or considering migrating to, the EU are negatively affected by the shortcomings of the current complex EU immigration system, which results in administrative burden, lengthy waiting times, uncertainty and confusion as to applicable rules and outcomes, or may even discourage them from applying. Limited sets of rights limit the EU’s permit attractiveness in their eyes.

Countries of origin can be positively affected through brain gain, circular migration and increasing remittance flows.

EU employers, including big employers, start-ups and SMEs, can be positively affected as they currently face limitations and excessive (administrative) burden when attempting to hire TCNs and address skills shortages.

National, regional and local authorities of Member States, including ministries, consulates, embassies, can be positively affected by streamlining procedures to avoid duplications and better informed single permit applications.

Indirectly, EU citizens are also negatively affected by the current situation as the EU’s labour migration system, in addition to other obstacles, insufficiently contributes to tackling skills shortages, demographic ageing and increasing old-age dependency ratio efficiently. This affects the financial viability of the Member States’ welfare systems.

15.15.    Summary of costs and benefits

The tables below present the estimated costs and benefits associated with the preferred option (“moderate legislative intervention”). Benefits are mainly in the form of direct cost savings across three distinct groups: TCNs, employers and national authorities. On the other hand, costs were mainly identified for national authorities and include both one-off and recurring costs. Where applicable, a wide range is obtained owing to significant differences in the extent of cost savings estimated across policy actions/ measures driven in part by differing assumptions around the number of affected applications – see Annex 4 for more details.

Note: average estimates are provided in brackets. Please note that estimates have been reported to the nearest ten thousand, hundred thousand or million (as necessary)

Annex 4: Analytical methods

This annex presents the overall analytical methods used, and assumptions made, for the quantification of costs (and cost savings) and economic impacts.

The approach used for the cost-assessment is a Standard Cost Model. Costs and, where relevant, cost savings were itemised and quantified to the extent possible across each of the proposed measures. These were then aggregated across measures to estimate the overall average or total costs to all relevant stakeholder groups associated with the proposed Policy Options.

In addition, a theory-based model was used for the estimation of economic benefits to measure the impact of the proposed Policy Options on tax revenue, remittances and consumption. This model uses various equations, the parameters of which are taken from the literature or qualitative evidence such as experts’ advice and validation. No other econometric models were used, as it was not deemed feasible on the basis of the data available.

Annex 6 of the study accompanying this impact assessment includes the assumptions and methods used to estimate the costs and economic impacts of each measure and policy option, as well as Excel tables with detailed calculations.

General

For the assessment of the policy options and policy measures, the following main baseline assumption has been made:

Without EU action, the number of single permit holders (stock and flow) will evolve in a linear way, based on extrapolation using Eurostat statistics from 2013 129 -2019 130 .

Whilst a lot has been published on how migration to the EU could evolve after the COVID-19 pandemic, views expressed in literature and by experts vary greatly. For example, a Commission study from 2020 131 noted that the anticipated global economic downturn due to COVID-19 and the forecasted uneven speed of recovery across world regions may provide an incentive to for more third-country nationals to migrate to Europe, however no estimate was provided. Initial 2020 data on the issuance of residence permits provide a mixed picture, with some Member States witnessing a strong reduction in permits issued and others seeing an increase instead. Another study assessing possible immigration scenarios noted that experts expect an increase in migration towards the EU between 21% and 44% from the recorded average annual figure for the 2008-2017 period, especially in future scenarios in which countries cooperate multilaterally. A stronger increase is expected with regard to highly skilled immigration. Overall, however, the study emphasises that experts are not confident in their responses, and disagree substantially on the size of international migration. Given these divergences and uncertainty, a linear trend has been chosen, which envisages a slightly lower number of third-country nationals being granted a single permit than was the trend over the last two years before the Covid-19 crisis (2018 and 2019) based on a lower take-up in previous years, which still results in a more than doubling of the number of permit issuances over a 10-year period.    

Figure 1. Single permits baseline extrapolated based on 2018 and 2019 data

Source of underlying data: Eurostat

Costs and cost savings

The costs and possible cost-savings that the policy measures are expected to trigger have been calculated by three main stakeholder groups, namely 1) national authorities, 2) employers / businesses and 3) third-country nationals. Where possible, the specific costs per Member State were estimated, based also on evidence as to whether the policy measure would require a significant change in a Member State or not.

For each policy option assessed in the main body of the report, a cost range has been provided per cost category (one-off / recurrent costs or costs savings per main stakeholder group above). This range is based on an extraction of the minimum and maximum values of each cost category across the policy measures included in the policy option. As these ranges are wide, they can also accommodate moderate increases in the number of single permits issued which go beyond the baseline (such as the range of 2.5-5% used to calculate the economic impacts, as detailed further below).

Estimation of costs / cost savings for national authorities

The calculations of administrative/ compliance costs for national authorities were based on a general formula:

Number of hours taken per FTE * number of FTEs * hourly wages * number of authorities affected

Typically, the number of hours and number of FTEs assumed for activities, such as transposition, monitoring, reporting, familiarisation, adaptation, training, communication/ information provision, etc. were based on own assumptions. Such activities are not dependent on the number of affected applications; hence they are not included in the above formula.

The following sources and assumptions were used:

·Hourly wages were sourced from Eurostat (“Mean hourly earnings by sex, economic activity and collective pay agreement” [EARN_SES18_12__custom_1049436]; selection: “Public administration and defence; compulsory social security; education; human health and social work activities; arts, entertainment and recreation; other service activities”)

·Number of affected authorities: assumed there are on average two authorities involved (e.g. agencies/ authorities dealing with immigration and employment matters)

The calculation of cost savings were calculated using the formula below:

Number of hours saved per application * number of FTEs/ application * hourly wages *number of affected applications * number of authorities affected

Typically cost savings for national authorities would be in the form of reduced time spent on processing applications (notably as a result of simpler/ streamlined application procedures). The number of hours saved varied by measures, but was overall based on assumptions around the difference in current processing times (sourced primarily from the Fitness check on legal migration and EMN ad-hoc queries) and those when following the requirements laid out in the policy measures.

The following sources and assumptions were used:

·Hourly wages were sourced from Eurostat (“Mean hourly earnings by sex, economic activity and collective pay agreement” [EARN_SES18_12__custom_1049436]; selection: “Public administration and defence; compulsory social security; education; human health and social work activities; arts, entertainment and recreation; other service activities”)

·The number of FTEs per application: one FTE will likely look after multiple applications. The assumption is: 0.0008 FTE/application (based on own calculations and data from Finland in the Fitness check)

·The number of affected authorities: assumed there are at most two authorities involved (e.g. agencies/ authorities dealing with immigration and employment matters).

Estimation of costs savings for employers and third-country nationals

General cost savings across policy measures for third-country nationals/ employers include:

1) Application cost savings (e.g., not having to complete a visa application):

·Data were sourced on average visa/ application fees 132 (primary source: Fitness Check on legal migration) and the number of (potentially) affected applications/ applicants (primary source: Eurostat data – “Single Permits issued by type of decision, length of validity [MIGR_RESSING__custom_1048120]”. Linear extrapolation was used to obtain indicatives figures of applications over the period 2020-2030) 133 .

·A general assumption was made that 80% of all applications are made by third-country nationals themselves, the remaining 20% by employers

·Cost savings were calculated as:

Averaged visa / application fee * affected applications * 0.8 (third-country nationals)

Averaged visa / application fee * affected applications * 0.2 (Employers)

·These cost savings were assumed to occur in affected Member States only – determined by data gathered on Member States that are not yet doing what the new law mandates (primarily sourced from EMN data queries). Those Member States that already satisfy the requirements of the new rules were excluded from the calculation of cost savings

2) Time savings (typically resulting from reduced time spent on visa/ permit applications):

·Data were sourced on average time taken to complete an application, mainly from the Fitness Check on legal migration (including gathering the necessary supporting documents and waiting for an outcome – proxy data were used for waiting times drawing on data available on time taken to process applications by national authorities)

·Assumptions (drawing on expert judgment or actual wording of new law) were made as regards the reduction in the time it would take to complete an application once a specific measure comes into effect (e.g. Member States would need to process applications within a four-month timeframe, i.e. 4* 30 or about 120 days)

·Data on hourly wages were sourced from Eurostat (“Labour cost levels by NACE Rev. 2 activity”[LC_LCI_LEV__custom_1078329]; selection made: “Industry, construction and services (except public administration, defence, compulsory social security)”

·Data on affected applications sourced from Eurostat (see previous bullet point). Depending on the measure, assumed that all or a certain proportion of applications would be affected

·Time/ cost savings were calculated as:

Number of hours saved * affected applications* 0.8 * foregone hourly wages (third-country nationals)

Number of hours saved * affected applications* 0.2 * foregone hourly wages (employers)

3) Travel cost savings (e.g., from being able to complete an application within the territory of a Member States):

·Savings assumed to accrue in Member States which do not allow third-country nationals to apply within their territory and require visas (sourced from EMN data queries).

·Assumption made on proportion of applicants who have to travel back to apply from their home country

·Data on travel fares sourced from air travel platforms – estimates gathered on average cost of a two-way ticket from Europe to the other continents. An overall average air fare across all continents was used.

·It was assumed that air fares are borne by third-country nationals themselves

·Travel cost savings calculated as:

Average travel costs / air fares * affected applications

4) Other cost savings (e.g., not having to pay intermediary fees, not having to pay additional application- related fees – e.g. certification of documents, etc.):

·Data on such fees gathered from (i) Fitness Check on legal migration; and (ii) additional desk research (e.g. 2015 UNODC paper, 2019 FRA paper)

·Again, specific assumptions were made regarding the number of affected applications depending on the measure under investigation

·Cost savings calculated as:

Average fee saved * affected applications *0.8 (third-country nationals)

Average fee saved * affected applications *0.2 (Employers)

Reporting costs/ cost savings across policy options

Each policy option comprises a package of policy measures. Reporting costs/ cost savings at policy option level proved challenging as cost items were generally repeated/ duplicated across policy measures (e.g. transposition costs, monitoring costs, etc.) and could not therefore be aggregated. To avoid double-counting, it was decided to report ranges. Hence, the estimates reported across policy options should be treated as ballpark figures/ ranges, i.e. they provide a mere indication of the extent of actual costs/ cost savings associated with a particular option.

The range of figures reported for one-off vs recurring costs and cost savings (across the policy options) are based on minimum and maximum cost/ cost savings estimates gathered from estimations across policy measures. Average figures are often reported, though they should be treated with caution. This is because certain policy options comprise a larger number of measures compared to others. Hence, where averages are calculated across a larger number of measures, the resulting (average) figure is usually smaller (owing to total cost/ cost savings figures across a specific cost item/ category being divided by a larger number of measures). In the real world, however, the fact that average figures are smaller for policy options, where a larger number of measures are concerned, could be attributed to economies of scale - i.e. unit (administrative/ compliance/ enforcement) costs fall as total costs are spread across a larger number of policy actions/ measures.

Reporting ranges may also give a sense of “under-representation”. As such, some policy options build on other policy options and contain additional measures/ actions (e.g. option 2). It would make sense for cost/ cost savings estimates to be higher for these options. However, this is not necessarily the case as, when comparing option to option, the following must be considered:

ŸCosts/ cost savings could not be determined/ quantified for one or more measures (e.g. owing to a lack of data); hence overall costs/ cost savings for a particular option do not change significantly (even if that option comprises a higher number of measures than another option);

ŸSome cost items (or categories of costs) do not apply in the context of certain measures (e.g., IT set-up costs, which are often substantial, may not be relevant to all measures); as a result, as before, overall costs for a particular option do not change significantly (even if that option comprises a higher number of measures than another option).

Economic impacts

The main assumption for the policy options and the measures included is that, as a result of simplifying admission procedures and strengthening the rights of single permit holders, the EU becomes a more attractive place to live and work for third-country nationals, and that this in turn will lead to several positive economic effects, provided their integration into the economy and society is relatively successful. Moreover, as the majority of Member States apply some form of labour market test, it is assumed that these third-country nationals will nearly exclusively be filling vacancies that are difficult to fill, or will be bringing skills that are unavailable in the EU labour market. Additionally, these third-country nationals would contribute to mitigating the ageing of the EU workforce.

However, the economic impacts of the policy options were difficult to quantify given the magnitude of uncertainty and complexity of factors intervening at different levels, in addition to purely administrative and procedural ones. Different demographic, social and economic pull and push factors intervene and interact with regard to immigration, labour markets and the business cycle at macro-level, including technological transformation; factors which are independent from the measures under consideration.

Literature offers some clues on the links and, to some extent, interaction between patterns of migration from third countries, and different economic impacts based on theoretical assumptions. For example, a report by the International Monetary Fund (IMF) 134 linked immigration inflows with beneficial impacts on the economic and employment growth of the receiving country, as well as foreign direct investment and, in the long run, innovation. Migration is also often found to have a positive effect on public finances in the long term, with its overall impact estimated to be around 0.5% of GDP for advanced economies 135 . Increased migration has also been linked to the lowering of informational barriers through the knowledge of other nations' languages, regulations, and market opportunities. Whereas the impact of migration on wages and employment of natives is more contentious, there is evidence to suggest this could be null or even positive in some cases.

Limited evidence is available regarding the link between introducing more efficient admission procedures and strengthened rights on the one hand, and increased migratory flows. It has however been suggested that the decision to migrate may be affected by 'external factors' such as visa requirements, work permits, bureaucratic processes surrounding migration and related costs 136 . In fact, there is some evidence that suggests that the easing of immigration restrictions on foreign workers may lead to increased migration. However, these barriers/motivators to migration do not seem to be as well understood as, for example, employment opportunities or family reunification. Instead, increased migration flows are, within the literature reviewed, mostly associated with economic success and the growth of urban areas within countries 137 .

To address gaps and validate draft assumptions and assessments made, the study team also consulted, at several points during the study, with an Expert Panel made up of five experts from the Odysseus Academic Network for Legal Studies on Immigration and Asylum in Europe, the Migration Policy Institute and Fragomen, a law firm specialised in labour migration, inviting them to review, discuss and validate aspects for which the evidence base was poor.

In what follows, where it was considered possible to provide some estimates of possible (policy options 2 and 3), an increase of respectively 2.5% and 5% was assumed on top of the baseline concerning the number of additional single permits issued for remunerated activities, rather as an illustrative example than as firm predicted effects. These assumptions were validated by our panel of experts.

Unless mentioned otherwise, all economic impacts have been expressed over a period of 10 years, with the policy option and policy measure assessments presenting each time the total impact over that period.

Estimation of tax revenue

The impact on tax revenues of higher TCNs arriving and staying in the EU is based on the assumption that they will pay taxes on gross income. As these jobs positions were unfilled, and hence additional to the existing workforce, it is fair to assume that tax revenues would increase proportionally to the wages times the % tax rate.

For the policy measures anticipating an increase in single permit holders for the purpose of work, the increase in tax revenue, has been calculated as follows:

[% of taxes paid on gross income] * [EU-average gross annual earnings] * [Number of additional third-country nationals]

The EU average gross annual earnings in industry and services is taken from Eurostat [TPS00175]. The average EU tax share is calculated based on Eurostat data (ICW_TAX_01)

Estimation of consumption

The increase in consumption is calculated based on the assumption that third-country nationals who opt to come to the EU as a result of the policy measures, become ‘new consumers.

The additional consumption is then proportional to the number of third-country nationals times the average yearly household consumption.

Yearly consumption is based on experimental Eurostat statistics on mean and median economic resources of households by income, consumption and wealth quantiles - experimental statistics [icw_res_02]. The average median household consumption has been calculated as follows:

[yearly consumption per household] *[Number of additional third-country nationals]

Economic impact as additional earnings

The additional number of TCNs arriving into the European labour market is expected to contribute to additional earnings. This means that job vacancies are filled in and assuming TCNs will be paid the average gross annual salary, the effect results in an additional mass of earnings that contribute to the European GDP. This is calculated as follows:

[EU-average gross annual earnings] * [Number of additional third-country nationals]

Estimation of remittances

The increase in remittances is calculated by multiplying the average share of income which third-country nationals send home, estimated at 15%, with the EU average annual median income, and by the number of additional third-country nationals who come to the EU.

The share of remittances is taken from a UN online publication, “Remittances matter: 8 facts you don’t know about the money migrants send back home” 138 . It represents a global, not EU-specific share. This estimate must be taken with caution because it is based on a world-wide sample and the patterns of remittances may vary markedly across continents and type of migrants.

As the additional number of third-country nationals who additionally may come to the EU are expected to increase consumption and economic growth, some of it may be offset by the remittances sent abroad. However, the negative effect of remittances is not expected to dominate the positive benefits on the EU economy.

Remittances are calculated as follows:

[proportion of income sent as remittances]*[EU-average annual median income]*[Number of additional third-country nationals]

Impact on skills shortages

As the migrants are subject to labour market tests, we assume that nearly all of them would be accessing vacancies that are difficult to fill, or would provide skills that are unavailable in the EU labour market, these third-country will help ease skills shortages, by filling job vacancies. Statistics on job vacancies provide information on the level and structure of labour demand from enterprises.

Data on the quarterly and annual number of job vacancies is published by Eurostat 139 for a number of European countries 140 . Aggregated data at the EU-27 level are not available because some Member States do not provide harmonized data and there are differences in coverage because of divergent criteria. Nonetheless, on the basis of available quarterly data from 2013Q1 until 2021Q2, there are on average approximately 1.75 million unfilled job vacancies every quarter, which is also similar to the annual level of unmet vacancies by EU companies.

However, given the magnitude of job vacancies and the expected number of additional TCNs, such a gap would be addressed only to a limited extent when assuming an increase in single permit issuances from 2.5%-5%, namely, between 1.45 and 1.7%. Considering that the number of third-country nationals would be far below the total number of job vacancies, it is unlikely any effect on salaries in the domestic labour market resulting from the additional third-country nationals.

At the same time, if the number of job vacancies in the EU per quarter tended to remain stable between 2013 and 2019, the outbreak of the COVID-19 pandemic has resulted in a dramatically reduced number of vacancies notified to the Public Employment Services (PES) in the first two quarters of 2020 compared to similar periods in 2019 (-30 p.p. in 2020Q1 and -60 p.p. in 2020Q2). Correlatively, the job vacancy rate, not seasonally adjusted, showed an increasing tightness of the labour market since 2017 and a sharp decrease and rebound in 2020, corresponding to the height of the COVID-19 crisis 141 . In fact, the job vacancy rate reflects, in part, the actual unmet demand for labour as well as potential mismatches between the offer and demand of skills in the labour market.

Partly due to steep recovery trajectory, job vacancy rates, especially in the Euro Area, are likely to return to and remain at pre-COVID 19 crisis levels Additionally, regular and comprehensive surveys of companies recruitment needs are signalling a historically high level of employers worldwide (69%) experiencing difficulties to attract and retain suitable candidates for their recruitment needs 142 . Such difficulties were intensified by the COVID crisis and are likely to last, increasing the level of employers experiencing recruitment difficulties and the time during which unfilled vacancies will remain open in the foreseeable future in advanced economies, because of the global and simultaneous competition for suitable candidates and in-demand skills. However, while some Member States face emerging shortages in highly skilled jobs, others rather in medium and low-skilled occupations, hence there are disparate labour market needs between different Member States, also due to divergent professional credentials requirements for certain occupations such as healthcare assistants. The European Commission’s 2020 report on shortage and surplus occupations identified sectors of most widespread shortages in European countries and regions covered by the report (topped by four healthcare related occupations, five software related occupations and ten craft occupations), as well as main sectors with most severe shortages (topped by the same four healthcare occupations and five software related occupations) 143 .

Estimation of productivity

The estimation of productivity is based on the assumption, reviewed together with the expert panel, that if third-country nationals who migrate to the EU are able to integrate successfully, this will lead to an increase in their productivity. Although higher productivity could be estimated by an increase in wages, the exact figure is difficult to obtain given the uncertainty described above about the increase in migration and its effect on wage levels. For this reason, no quantification or monetisation has been attempted.

Annex 5: Assessment of the Policy Measures

Option 2: Legislative revision of the Directive - application procedure and non-legislative measure on equal treatment

Policy Measure 2.1: Place of application (Art. 4(1)) Allowing applications both from within and outside the Member States

Figure 1.Place of application (Art. 4(1)) Allowing applications both from within and outside the Member States 

Policy Measure 2.2: Visa procedure for initial entry (Article 4(3))

Figure 2.Visa procedure for initial entry (Article 4(3)) Visa to be issued if all single permit conditions are met, only one substantive assessment allowed, deadline 4 months 

Policy Measure 2.3: Including labour market tests as part of the single application procedure

Figure 3.Clarifying when the labour market test is to be launched in the procedure and that the labour market test (Art. 1(2)) is to be undertaken within the 4-months deadline for the processing of applications 

Policy Measure 2.4: Mandating the provision of adequate information

Figure 4.Provision of information (Art.9): Mandating the provision of adequate information

Policy Measure 2.5: Non-legislative measure: Non-binding recommendations to harmonise the implementation of equal treatment rights

Figure 5.Non-binding recommendations to improve the implementation of equal treatment rights

Option 3: Legislative revision of the Directive to simplify the procedure, improve rights and protection from exploitation

Policy Measure 3.1: Ensuring the permits are not linked to only one employer

Figure 6.Permit not linked to an employer: Ensuring that the permit is linked to a specific profession or sector and not to the employer (Art. 11(c))

Policy Measure 3.1.: Ensuring the permits are not linked to only one employer

Figure 7.Permit not linked to an employer: Ensuring that the permit is linked to a specific profession or sector and not to the employer (Art. 11(c))

Policy Measure 3.2: Removing restrictions on equal treatment for access to private housing

Figure 8.Equal Treatment: Housing: Removing restrictions on equal treatment for goods and services or clarifying the text to ensure that there is no exemption on access to private housing (Art. 12(2)(d)(ii)) 

Policy Measure 3.3: Access to Family Benefits - Introducing a recital in order to clarify that if EU nationals can export family benefits to third countries in case the family members reside outside the EU, this should also apply to third-country nationals

Figure 9.Access to Family Benefits - Foreseeing a provision that allows taking into account the family members outside the EU when calculating the amount of family benefits to be paid to TCNs

Policy Measure 3.4 - Removing the possibility to exclude those working on the basis of a visa from family benefits (if the visa is valid for more than six months)

Figure 10.Assessment measure: Equal Treatment: Removing the possibility to exclude those working on the basis of a visa from family benefits (if the visa is valid for more than six months)

Policy Measure 3.5: Further clarifying the categories falling outside the scope of application of the Directive (intra-corporate transferees, seasonal workers and workers posted from third countries) by making clear references to the relevant acquis

Figure 11.Assessment of measure: Personal scope: further clarifying the categories falling outside the scope of application of the Directive (intra-corporate transferees, seasonal workers and workers posted from third countries) by making clear references to the relevant acquis.

Policy Measure 3.6 Including beneficiaries of national protection at least in the equal treatment chapter

Figure 12.Assessment of measure: Including beneficiaries of national protection at least in the equal treatment chapter 

Policy Measure 3.7 Include similar provisions to Art. 17, Art. 24 and Art.25 of the SWD, including: Sanctions, Compensation Monitoring, assessment and inspections Facilitation of complaints

Figure 13.Include similar provisions to Art. 17, Art. 25 and Art.25 of the SWD, , including: Sanctions, Compensation Monitoring, assessment and inspections Facilitation of complaints