Is your business ready for the new points-based immigration system?

Dentons

On 1 January 2021, the UK will introduce a new points-based immigration system for EU and non-EU citizens alike, treating all equally and signalling an end to free movement previously enjoyed under EU law. Employers will need to adapt proactively to these changes and it is prudent to plan now to become approved sponsors before applications open in autumn 2020. Doing so may save unnecessary delays in future rounds of recruitment, especially if there is an extensive backlog of sponsorship licence applications. Once obtained, licences will last for a period of four years. Employers must also take into account the extra costs related to the sponsorship of migrant workers when preparing financial projections.

In summary, the new system is largely geared towards applications from skilled workers but it will also see the Global Talent and Student routes extended to EU nationals, amongst others. Points will accumulate according to specific skills, qualifications, salaries and shortage occupations with visas being awarded to those applicants who gain the required number of points and meet the suitability criteria.

So what are some of the key changes that employers should be aware of?

Skilled workers with a job offer

Skills threshold, salary and tradable characteristics

The minimum skills requirement is to be reduced to the regulated qualifications framework (RQF) level 3 (A-levels equivalent) from the current RQF level 6 (degree level equivalent). This means that migrants in so-called "medium-skilled occupations" are eligible to apply for visas as skilled workers.

The government accepted the proposal from the Migration Advisory Committee (MAC) to reduce the skilled workers' minimum salary threshold to £25,600 from the previous figure of £30,000 and this will apply across the whole of the UK with no regional variation. As per the current rules, migrants should still receive the higher of the specific salary threshold for their chosen occupation (which is known as the "going rate") or the minimum general salary threshold of £25,600.

However, the key difference with the new system is that, should a migrant's salary be lower than £25,600, it may be possible to "trade" certain characteristics against this lower salary to boost the number of points on their application. This is providing that their salary does not drop below £20,480 and the particular characteristic that they want to trade is one that is actually capable of being traded. Bear in mind that 70 points are required if they are to be eligible to apply for a visa, and 50 of those points must come from the compulsory criteria. A visual representation may be helpful here:

Characteristics Tradable Points
Offer of job by approved sponsor No 20
Job at appropriate skill level (in other words, RQF level 3 or above) No 20
Speaks English at required level No 10
Salary of £20,480 (minimum) – £23,039 Yes  0
Salary of £23,040 – £25,599 Yes 10
Salary of £25,600 or above Yes 20
Job in a shortage occupation (as designated by the MAC) Yes 20
Education qualification: PhD in subject relevant to the job Yes 10
Education qualification: PhD in a STEM subject relevant to the job Yes 20

Removal of the Resident Labour Market Test and the upper cap

Two further changes that will be welcomed by employers are the suspension of the cap on the total number of skilled worker applications to come to the UK and the abolition of the resident labour market test (RLMT). The government's intention is to make the recruitment process simpler and more efficient.

The RLMT applies to UK employers with a Tier 2 (General) sponsor licence and, subject to exemptions, essentially means that a job must be advertised to settled workers for a period of 28 days before a migrant can be recruited to fill the post. This will no longer apply, thus saving employers' time as they will no longer need to document evidence proving compliance with this process.

Removal of the upper cap of 20,700 Tier 2 applications per year gives more clarity for employers wishing to on-board migrant workers in that it cuts the risk of their applications being excluded from the pool under the previous cap.

Highly skilled workers with no job offer

An expansion of the Global Talent application route for talented individuals, which is currently available to non-EU citizens, will be made available to EU citizens under the same terms (for more information on eligibility and process, see the Home Office "Global Talent Guidance" published on 20 February 2020).

In short, while there are no English language or employer-led sponsorship requirements, applicants must still possess the required number of points and be endorsed by a relevant and competent body. These include: the Royal Society; the Royal Academy of Engineering; the British Academy; Tech Nation; the Arts Council England; and UK Research and Innovation. There will be no cap on Global Talent visas and a fast-tracked process will be implemented for certain fields.

Unsponsored skilled workers

An unsponsored route will be introduced for skilled workers, which will operate within the parameters of the points-based system, with the biggest difference being that the total number of applicants will be capped. The intention is to permit a smaller pool of highly skilled workers to obtain a visa while maintaining the integrity of the employer-led skilled worker application route. We await further details from the government about how this route will operate which will be released following key stakeholder engagement.

New entrants

The new entrants category, which currently applies to workers aged up to 26 years old and students entering into the workplace for the first time, will have a 30% lower salary threshold compared to experienced workers in any industry. What this means is that these applicants must earn a minimum of £17,920 (excluding pension contributions and other allowances). However, if there is a "going rate", it must still be paid. As with skilled workers, no regional variations will be introduced.

Lower skilled workers

There will be no immigration route open to new unskilled and lower skilled workers, unless they apply to a specific visa category such as the Seasonal Agricultural Workers Scheme. Workers in this category who have already been accepted under the EU Settlement Scheme will be entitled to stay with no restrictions on their rights to work. This development may be of some concern for those employers operating in tourism, retail and hospitality. After the Brexit transition period, they must look domestically to fill these posts. Whether this is achievable is yet to be seen and it may result in a gap in the UK workforce.

Self-employed persons

There will be no separate application route for self-employed persons such as freelancers. It is expected that the innovator route (currently in force) and the proposed unsponsored route will cater for these types of migrants. In addition, some occupations such as artists, entertainers and musicians are already allowed to apply to be in the UK for up to six months and receive payment for certain performances or one engagement of up to a month without the need to apply for formal sponsorship or a work visa.

If you would like tailored advice relating to sponsorship, or the general makeup of your workforce, feel free to contact our dedicated team of immigration and employment lawyers who would be happy to help.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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