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 Term or acronym Meaning or definition AHQ Ad Hoc Query CJEU Court of Justice of the European Union DG Directorate General EGEM Expert Group on Economic Migration EMN European Migration Network EU European Union EU Charter Charter of Fundamental Rights of the European Union FRA Fundamental Rights Agency FTE Full Time Equivalent GDP Gross Domestic Product JRC Joint Research Centre NGO Non-governmental organisation RSB Regulatory Scrutiny Board REFIT Regulatory Fitness and Performance Programme TCN Third country national





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, seasonal work, highly skilled work, intra-corporate transfers family reunification, and concerning the status of third-country nationals who are long-term residents. 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, 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. 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 – 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. In 2019, 2 984 261 single permit decisions 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. Figure 1.First permits issued for remunerated activities by reason, length of validity and citizenship GEO/TIME 2014 2015 2016 2017 2018 2019 2020 European Union - 27 countries (from 2020) 456.614 589.552 737.482 905.331 983.742 1.197.788 903.398 European Union - 28 countries (2013-2020) 573.321 707.632 854.558 1.009.543 1.091.892 1.197.788 : 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. 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 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, 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 , 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, 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 . 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 , 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. 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.). 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. EU citizens are also indirectly negatively affected as the EU’s labour migration system insufficiently contributes to tackling skills shortages, shrinking work population and increasing old-age dependency ratio. 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. 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. It also emerged from the consultations 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 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. 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. 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. 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. 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. 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. 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 – before the TCN can apply for a visa. In other Member States, 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. This can prolong the overall procedure even up to six months. As confirmed by representatives of migrants and the civil society, 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. 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. 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 . 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 . 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 . 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, 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. 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”. 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; 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. 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 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 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 . 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 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. 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 or with regard to their skill levels 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, i.e. vacancies not covered by Member States’ or other EU nationals, 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. 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). 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. 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, 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). 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 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. 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. Estimating the scale of the problem is challenging for a number of reasons. 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 . 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. 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. Others considered that national rules already adequately addressed protection, inspections, monitoring, and sanctions . 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 . 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. 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. 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. 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 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 2020noted 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 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. 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, as the category represents a complex landscape of a diverse variety of workers. 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. 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). 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. 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, Member States consulted were opposed to including self-employed workers due to complexities surrounding this category. 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 . 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 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 . Beyond these complexities, stakeholders representing business organisation, trade unions, civil society, legal practitioners and Member States 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. Obj 1: To simplify admission procedures Obj 2: To ensure greater efficiency of application procedures Obj 3: To address EU labour shortages Obj 4: To enhance equal treatment of TCNs with EU citizens Obj 5: To protect TCN workers from labour exploitation Policy Option 1: Non-legislative option 1.1 Enhancing implementation of the Directive and practical cooperation between MS No effect Moderately effective No effect No effect No effect 1.2 Single Permit Directive Handbook, Commission guidelines, promotion of innovative approaches No effect Moderately effective No effect No effect No effect Policy Option 2: Hybrid option 2.1 Amending the provision on the "place of application" Very effective Effective Moderately effective No effect No effect 2.2 Including the entry visa as part of the single application procedure Effective Effective Moderately effective No effect No effect 2.3 Including labour market tests as part of the single application procedure Very effective Effective Moderately effective No effect No effect 2.4 Mandating the provision of adequate information Moderately effective Moderately effective Moderately effective Moderately effective Moderately effective 2.5 Non-binding recommendations to harmonise the implementation of equal treatment rights No effect No effect No effect Moderately effective Moderately effective Policy Option 3: Legislative revision 3.1 Ensuring the permits are not linked to only one employer Effective Effective Effective Effective Effective 3.2 Clarifying equal treatment for access to private housing No effect No effect No effect Effective No effect 3.3 Clarifying equal treatment in granting family benefits to family members residing in third countries No effect No effect No effect Effective No effect 3.4 Removing the possibility to exclude those working on the basis of a visa (valid for more than six months) from family benefits No effect No effect No effect Effective No effect 3.5 Further clarifying the categories falling outside the scope of application of the Directive No effect No effect No effect Effective Effective 3.6 Including beneficiaries of national protection at least in the equal treatment chapter No effect No effect No effect Effective Effective 3.7 Including provisions relating to inspections, monitoring and sanctions against exploitative employers No effect No effect No effect Effective Effective

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 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 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 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.