Ten years after “the rollover,” the Cayman Islands is no longer really debating whether there should be a term limit on foreign workers’ residence. Instead, the discussion appears to have shifted toward expanding that policy and proposals that would fundamentally change the nature of the British Overseas Territory’s work permit system.
During its next planned phase of an immigration system overhaul, the Cayman Islands government will set aside many long-held beliefs that have guided its guest worker policy for the past 30 years and reexamine them.
“Phase 2” of immigration reform is expected to focus on a number of areas, including the role appointed boards should have in the work permit approval process, whether the Immigration Department should continue to be the lead agency in approving work permits, whether non-Caymanian civil servants should face residency term limits in the same way as private sector workers and if, in the end, local companies can truly be forced to hire employees they don’t want.
The Ministry of Home Affairs, which has responsibility for immigration-related matters, has started a consultant’s review of the entire work permit process, employing the Deloitte accounting firm on a competitively bid $80,000 contract. The review is expected to be substantially complete by year’s end, but any changes that may be adopted would have to wait for legislative approval – unlikely before the end of the government’s current 2014/15 budget year .
It is possible that the review might recommend the removal of the Cayman Islands Immigration Department as the chief government agency in directing the application for, processing of and approval of work permits.
The issue was discussed recently by Employment Minister Tara Rivers and her ministerial councilor, George Town MLA Winston Connolly, at a press conference with the workforce agency.
Both elected members indicated a willingness to accept legal changes that would make government’s labor-related agencies, such as the National Workforce Development Agency and the Department of Labour and Pensions, responsible for work permit vetting and approval.
“Immigration should be about border control, and the [workforce agency] should be the central body for employment,” Connolly said during the briefing.
Rivers indicated that making such a change would be complex and would require a significant overhaul in immigration and labor legislation. “But I think it is something that can be done,” she said.
Whatever government agency ends up handling work permit approvals, ministry chief officer Eric Bush said, it is likely that the National Workforce Development Agency would have a much greater role “at the front end” of the permit process.
How that might practically happen has been a sticking point so far in work permit reform. The general concern is that the 10-member staff at the workforce agency would go from handling 800 clients currently looking for work to vetting some 20,000 applications for work permits and government contracts. Immigration officers would still have to be involved in the process for border security reasons, even if the primary permit approval responsibility was placed elsewhere.
Currently, work permit approvals are handled either by immigration officers or by politically appointed boards. Government contracts to non-Caymanian workers are approved in the civil service.
The Cayman Islands Chamber of Commerce has previously advocated that ultimate responsibility for work permit approvals should be taken away from the Immigration Department, although it agreed some border control measures must be included in the permit approval process.
It’s clear that local business demand for work permits will continue for years to come, based on statistics from both the Immigration Department and the Department of Pensions and Labor.
In July 2014, there were more than 20,000 non-Caymanians working in the territory, including those on government contracts and individuals awaiting word on permanent residence applications. The figure does not include non-Caymanian permanent residents.
The government’s most recent labor force survey, from 2013, estimated that more than 1,800 Caymanians were unemployed. However, well below half of those said to be jobless had registered with the National Workforce Development Agency.
Agency officials said approximately 800 Caymanians were registered with the agency at last count. The number includes unemployed Caymanians, those considered “underemployed” – part-time workers seeking full-time jobs – and those who already have full-time work but who are seeking a new job.
Agency representatives could not give a breakdown of how many registered job seekers were unemployed versus how many were underemployed and how many were fully employed and seeking new work.
Workforce agency director Tasha Ebanks-Garcia acknowledged that the unemployment figure from the labor force survey is now a year out of date. However, she said the agency believes the government statistical survey can be relied on for accurate unemployment numbers, and she believes a significant number of local jobless workers simply aren’t registering.
“Most Caymanians…are able to navigate their way through the market,” Ebanks-Garcia said. “Historically, we’re not a culture that relied on the employment agencies. So this is a huge cultural shift to encourage individuals to utilize this mechanism.”
In addition, numbers of registered unemployed or partially employed with the workforce agency change frequently, Ebanks-Garcia noted.
“You’ll find that individuals will secure employment, but not for long, and change their status from unemployed to employed,” she said. “It is very difficult…to come up with exact numbers of what the situation is.”
Acknowledging that companies cannot be forced through penalties and immigration-related enforcement to hire people they do not want to hire, Premier McLaughlin said government instead wished to “incentivize” businesses to hire Caymanians.
To this end, he said the government will seek to update and reintroduce an “accreditation” scheme for local businesses that will, in some cases, make work permits and other immigration-related applications easier to get for companies that “play by the rules.” The accreditation proposal is another matter under review by government consultants.
“We do have to be careful about how insular and restrictive we are with respect to immigration,” Mr. McLaughlin said. “There is [the tendency], particularly in tough times like this, to want more enforcement, to want to force companies to employ Caymanians and to say we don’t want more work permits.
“I have concluded that we will never, ever, through enforcement or otherwise, compel companies to hire people they do not want to hire. The Cayman Islands government would never be able to afford the level of resources necessary to have that kind of enforcement regime. For 40 years, we have striven to drive employer behavior by virtue of penalties. I’m not suggesting that we remove those provisions from the law … but we have to develop an accreditation scheme which incentivizes employers to hire Caymanians and to train Caymanians.”
An accreditation scheme for local businesses was first proposed in 2008 by then-Chief Immigration Officer Franz Manderson as a way to create positive incentives for employers to train and hire Caymanian workers. The proposal was never fully developed, although it was generally supported by both political parties at the time.
As it was introduced in January 2009, the Immigration Accreditation System created separate tiers of rankings for businesses, from those that are least compliant with the country’s immigration laws and procedures to those that are most active in the community and do the best job of training and promoting Caymanians.
Under that plan, all businesses in Cayman that hold trade and business licenses and that employed at least one work permit holder would have had to fill out a form that sought to judge the business on six criteria: compliance with Cayman’s licensing regulations, talent development programs, employment practices, support for community programs, Caymanian business ownership, and the company’s activity in creating new job opportunities. Based on the information provided, and research by Immigration Department officials, the companies would then either be accredited or not. If they were granted accreditation, they would then be ranked in one of six tiers by Immigration.
If companies were not accredited, they would not have been able to get new work permits, or have any current work permits renewed. Higher-ranked employers would have been given certain benefits under the islands’ immigration regime.
As part of the accreditation system, the government has agreed to consider what it refers to as the Singapore work permit model, in which a portion of each work permit fee charged to the employer of a non-Caymanian would be placed in a segregated fund.
“The fund should be used solely for the training and up-skilling of locals in order to teach skills and retool workers,” according to a legislative motion filed by MLA Connolly that proposed the training fund.. “Such [a] fund can also act as a workforce income supplement to replace social services for those able to work and [who are] actively looking for work and [are] willing to undergo such training.”
Another goal of the fund, according to the motion, is to “incentivize employers by supplementing salaries of locals training for employment.”
Bodden Town MLA Alva Suckoo, who seconded Connolly’s motion, said he views the accreditation plan as government being more forward-looking regarding local unemployment.
“We’re lacking representation for the labor itself, Caymanian labor,” Suckoo said. “We have no unions, and in the face of this, government is called upon to be more proactive.”
Finance Minister Marco Archer said siphoning 10 percent of work permit fees paid to the Cayman Islands government on a yearly basis would amount to $7.35 million taken from the general fund budget, a “significant amount by any standard.” The finance minister supported the proposal, but said measures would have to be put in place to ensure that Cayman gets value for money out of any worker-training -programs the government funds.
The work permit reform process also has a general goal, as stated by Premier McLaughlin last year, of reducing the involvement of appointed boards in work permit approvals.
The Deloitte review seeks to advise government on creating a work permit approval system that is faster than the current process and which also includes less subjectivity in the decision-making.
Premier McLaughlin has said he does not believe appointed boards can be entirely taken out of the work permit approval process and that, in any case, some mechanism will be needed for work permit appeals.
Consultants are also expected to consider whether all the details currently required on work permit applications are necessary for approval of a permit – for instance, requirements that permit-holders provide details on their personal living accommodations, including a landlord’s signature.
The “big-picture” idea is to eventually have as many work permit, permanent residence and other immigration-related applications as possible dealt with administratively. Now, immigration staff members approve or deny a significant number of work permits. The ruling Progressives government has said its goal is to have immigration handle all initial applications and leave only appeals of permit denials to entities like the Work Permit Board and Business Staffing Plan Board.
Whether those permit approvals are ultimately handled by the Immigration Department or the National Workforce Development Agency, the goal is the same.
Some serious discussion will be needed on this point, McLaughlin has acknowledged. “I’m told by those experts within the system that we’re probably going to need to retain a board to deal with more problematic matters [work permit applications where a qualified Caymanian applied and did not get the job, etc.].”
Civil service rollover
This proposal again has arisen some seven years after it was rejected following an internal review by the civil service and governor’s office that was never made public.
The idea is to subject non-Caymanian civil servants who do not hold permanent residence – of which there are more than 800 – to the same law that limits the time private sector workers without local connections can remain in the country. That term-limit on residency, often referred to as “the rollover policy,” was extended to nine years following amendments to the Immigration Law in 2013.
Non-Caymanian civil servants’ employment contracts are governed under the Public Service Management Law, but it has been anticipated that any changes made that affect non-Caymanian civil servants’ residency period would have to be included in the Immigration Law.
The difficulty now facing the government in enacting such a policy for civil servants is largely the same as the issues it encountered in 2007. Certain government departments that employ more foreign workers would be harder hit by a term-limit policy than others, particularly the Royal Cayman Islands Police Service and the Department of Education, both of which employ a large number of non-Caymanians. According to the Department of Education, 54 percent of all teachers in the public school system are non-Caymanian. In the RCIPS, about 58 percent of all police officers are non-Caymanian.
In the 2007 proposal, the police service would have been exempt from the term-limit policy, according to then-Deputy Head of the Civil Service Peter Gough.
Also at issue in 2007 was whether various statutory authorities and government-owned companies should continue to be “protected” from the term-limit policy. Many entities, including Cayman Airways and Water Authority-Cayman, are already required to get work permits for expatriate employees.
However, others, including the Health Services Authority, were not required to do so. The Health Services Authority staff is about 50 percent non-Caymanian at present.