The transition period for the UK exiting the EU expires on 31 December 2020, at which point there will be no more free movement of people. To replace free movement, the Government are introducing an Immigration Bill which will see the introduction of a new points-based immigration system. In this hot topic we explore what is entailed with this new system and what it will mean for employers and recruitment.
Brexit – where are we now
The UK is no longer a member of the European Union and is currently in a transitional period in which the UK and EU must negotiate terms for the new relationship moving forward. This transition period ends on 31 December 2020 and at which point the free movement of people will end.
Whilst the deadline for agreeing a deal has passed, at the time of writing, it is expected that negotiations will continue into the first couple of weeks of November. However, whether there is much scope for negotiations to continue past this, is uncertain given the work involved in ratifying any new agreement into UK legislation and the need for it to go through parliament in time for 31 December.
Recruiting workers from outside the UK from January 2021
From 1 January 2021, EU nationals wishing to live and work in the UK will be required to apply to work in the UK through a new points-based immigration system. EU and non-EU nationals will therefore be treated equally in respect of coming to the UK to work.
Points Based Immigration System
EU nationals will be able to apply to work in the UK as a skilled worker. Through this skilled worker route, the job they are applying for must have a suitable rate of pay and skill level, as defined by the UK’s immigration rules. The Government’s guidance on immigration rules is due to be updated to expand the full list of occupations that will be available.
All skilled jobs have been given a standard occupational classification code (SOC) and each SOC then has a designated skill level which determines whether the job meets the requirements of the skilled worker route. At the time of writing, the list of codes is subject to change, but can be found in the following government publication.
Assuming the job meets the required pay and skill level, job applicants will need to score 70 points in which to work within the UK. People will be able to earn points by trading characteristics against a lower salary. The Government have announced the following characteristics and points that can be attained:
|Characteristic||Mandatory or Tradeable||Points|
|Job Offer (approved by Sponsor)||Mandatory||20|
|Job Offer at appropriate skill level||Mandatory||20|
|Speaks English at the required level||Mandatory||10|
|Salary between £20,480 and £23,039 or at least 80% of the going rate for the profession (whichever is the highest)||Tradeable||0|
|Salary between £23,040 and £25,599 or at least 90% of the going rate for the profession (whichever is the highest)||Tradeable||10|
|Salary between £25,600 or above or at least the going rate for the profession (whichever is the highest)||Tradeable||20|
|Job Offer in a shortage occupation||Tradeable||20|
|Education Qualification: PhD in a subject relevant to the job offer||Tradeable||10|
|Education Qualification: PhD in a STEM subject relevant to the job offer||Tradeable||20|
Anybody wishing to work in the UK as a skilled worker will need to demonstrate that:
- They have a job offer from a Home Office licenced sponsor
- The job offer is at the required skill level (RQF3 or above, which is A level or equivalent)
- They speak English to the required standard
- The salary must meet the applicable minimum salary threshold which is the higher of either
a) The general salary threshold set by the Government on advice of the independent migration advisory committee at £25,600 or
b) The specific salary requirement for their occupation known as the “going rate” .
Where the job offer is between £20,480 and the minimum threshold of £25,600, the applicant may still be eligible, but only if:
- The job offer is for a specific shortage occupation
- A PhD is relevant to the job
- A PhD in a STEM subject (science, technology, engineering, and mathematics) that is relevant to the job.
To recruit from outside the UK from 1 January 2021, Employers will be required to hold a sponsor licence for which there are several rules that govern how they are issued and used.
For an organisation to be eligible, you cannot have any unspent criminal convictions for immigration offences or certain other types of offences such as fraud. Furthermore, if an organisation has a history of failing to carry out sponsorship duties, then this will also prevent them from becoming a sponsor.
Sponsor Licence Job Roles
Employers will be required to assign the sponsorship process to key roles within the business. Depending on the size and nature of the business, the sponsorship process can either be assigned to the same role/person or shared out amongst different roles/members of staff. The key roles required will be:
|This is a senior and competent person responsible for the actions of employees who use the sponsorship management system|
|This is an employer’s main contact with the UK Visa and Immigration (UKVI)|
Level 1 User
|This is somebody who is responsible for all day to day management of the licence using the sponsorship management system|
|Level 2 User||This is an optional role that an employer can be assigned to using the sponsorship management system but with a more restricted access.|
The person(s) assigned responsibility of the sponsorship process must not have any of the following:
- Unspent conviction
- Received a fine in the last 12 months by UK Visa and Immigration (UKVI)
- Have been reported to UKVI
- Based outside of the UK for most of the time
- Be a contractor or consultant
- Be subject to a bankruptcy restriction order or be undertaking a debt relief restriction order or undertaking
- Have a history of non-compliance with sponsor requirements
- Be a key person at a sponsor that had its licence removed in the last 12 months
- Failed to pay VAT or other excise duty.
It is also a requirement of becoming a sponsor that Employers must:
- Check that their foreign workers have the necessary skills, qualifications, or professional accreditations to undertake the job
- Keep copies of documents showing the persons skills, qualifications and professional accreditations must be kept
- Certificates of sponsorships must only be given to workers when the job is defined as one that qualifies for sponsorship
- Tell UK Visa and Immigration if your worker is not complying with the conditions of their visa.
Where an employer fails to adhere to these conditions, then their licence may either be suspended, downgraded, or removed.
Employers are required to have appropriate systems in place which allows them to monitor foreign workers specifically in relations to:
- Their immigration status
- To keep copies of the relevant documentation
- Tracking and recording their attendance
- Keeping contact details up to date
- Reporting problems to the UKVI.
All documents relating to a migrant worker must be kept throughout the sponsor period and until either one year has passed from the date in which it ends or the day on which a compliance officer has examined and approved them, if less than one year after the sponsor has ended.
Change to Business Circumstances
An employer is required to notify UKVI within 20 working days of any significant change to business circumstances, which is defined as:
- A business stops trading or becomes insolvent
- A business substantially changes the nature of their business
- A business is involved in a merger or takeover
- There is a change to the business’ address
- There is a change to the allocated roles for dealing with work visas.
Sponsoring under 18s
If an employer sponsors a young person, under the age of 18 then additional responsibilities are placed on the recruiting employer. The employer must make sure that those under the age of 18 have suitable care arrangements for their travel, arrival and living arrangements whilst in the UK.
A letter from the parents is also required which gives their consent to the care arrangements and you must also obtain a disclosure and barring service check on those workers who will need it.
A breach of these requirements will lead to the UKVI removing the licence.
Types of licence
Depending on the type of recruitment an employer wishes to undertake will determine the type of license that is applied for. Both can be applied for where appropriate for the business.
Tier 2 Licence
This licence is required if you are recruiting skilled workers with long term, possibly permanent job offers.
Tier 5 Licence
This licence is required if you are recruiting skilled workers on a short-term temporary basis.
At present when recruiting from outside of the EU, UK Employers must pay to become a sponsor, and non-EU applicants are required to pay for their visa application. From 1 January 2021, these rules will be extended to include those you recruit from within the EU.
Current fees an employer must pay if to be awarded a sponsor licence:
|Type of licence||Small businesses/charities||Medium to Large Businesses|
|Tier 2 and Tier 5||£536.00||£1,476.00|
The definition of a small business is if the annual turnover is less than £10.2 million and you have less than 50 employees.
Immigration Skills Charge
In addition to paying fees for having a sponsor licence, there is also an immigration skill charge that employers must pay when recruiting from outside of the UK. As with the sponsor licence, this fee will be extended from 1 January 2021 and will apply when recruiting EU nationals too.
The fee will be charged when employing foreign nationals through the skilled worker and intra company transfer routes. It is understood that the fee will be £1,000 per skilled worker for the first 12 months with an additional £500 charge for each subsequent six-month period. Charities and small businesses will be able to pay discounted rates.
Visa Application Fee
Currently, only non-EU nationals are required to pay a fee to apply to work in the UK. From 1 January 2021, this will be extended to EU nationals.
Other Routes into the UK
There will be several ways in which Employers can recruit from outside of the UK using the new points-based immigration system:
Global Talent Route
The Global Talent Route is a type of visa for non-EU talented and promising individuals in specific sectors and because of Brexit, it will become open to EU nationals too. EU nationals wishing to work in the UK under this scheme will not require a job offer so long as they are endorsed by a recognised UK body approved by the Home Office and Employers will not need to be a Sponsor and hold a sponsor licence if recruiting under this type of entry.
There will still be a requirement to earn the 70 points, which will be awarded by the Home Office in the following circumstances:
- For initial applications where the applicant has been issued with a valid endorsement letter and that the application for leave is made within three months from the date of the endorsement letter
- For extension applications where the endorsement has not been withdrawn from the endorsement body and the applicant has earned money in the UK in their endorsed field from the date of the endorsement letter.
Those who would use this to recruit would typically be sectors such as science, humanities, engineering, the arts, and digital technology. The idea is that the scheme attracts promising individuals in these fields.
International Students and Graduates
The normal student visa route will become available to EU, EEA and Swiss nationals. To apply for a visa to study in the UK, they will need:
- A place offer on a course
- Can speak, read, write, and understand English
- Have enough money to support themselves and pay for the course.
The 70 points required will be achieved through:
|Method||Requirements||Number of Points|
|Offer to study||
Confirmation of acceptance for studies
Approved Qualification requirement
Level of study requirement
Place of study requirement
|English Language||English language requirement||10|
New Graduate Immigration Route
For international students who complete a UK degree from the Summer 2021 will be able to work, in the UK at any skill level up to two years or, if a PhD graduate, up to three years. Further details are yet to be published.
If you already have an employee working overseas but you would like to transfer them to work in your UK offices, then the employee will be able to apply for the Intra-Company Transfer. To be eligible:
- The applicant must already be an employee of the company
- Be sponsored as an Intra-Company Transfer by a Home Office licenced sponsor
- Have 12 months experience working for a business overseas linked by ownership to the UK business
- Undertaking a role at the required skill level of RQF6 or above (equivalent to graduate level)
- Be paid at least £41,500 or the “going rate” for the job, whichever is the highest.
The transfer will only be temporary, and even though they can apply several times they will not be able to stay in the UK for more than five years in any six-year period.
There are exceptions to the eligibility criteria above because an employee who is on a salary of £73,900 will not need to have the 12 months service working for the company overseas and the maximum duration of being able to work in the UK will be nine years in a 10 year period.
Intra-Company Graduate Trainee Route
Like the main intra-company transfer scheme, those employees who transfer to the UK as part of a structured graduate training programme for up to one year will have different eligibility criteria regarding length of overseas experience and salary.
Start Up and Innovator
This route is aimed at attracting entrepreneurial talent and innovation.
The start-up is aimed at those setting up an innovative business for the first time whereas the innovator route is for those with industry experience with at least £50,000 funding. Both teams and individuals can apply to work in the UK under this route.
Health and Care Visa
This visa is part of the skilled work route and will enable those in eligible health occupations with a job offer from the NHS, social care sector or organisations that provide services to the NHS can come to work in the UK.
These are short term visas for engagements in the UK for up to 12 months. The applicant must have a job offer and have their employment sponsored by a UK employer licenced by the Home Office.
This visa is for international sports people who have a confirmed job offer, sponsored by a UK employer licenced by the Home Office. In addition, they must also be endorsed from their relevant sporting body.
Seasonal Workers Pilot
This is currently in place for agriculture and is due to run until the end of December 2020. It is not yet known whether this route into the UK will continue under the points-based system.
Youth Mobility Scheme
This route into the UK focusses on helping around 20,000 young people from eight different countries to come to the UK to work and travel. It is specifically for those between the ages of 18 and 30 years of age and the visa would be in place for up to two years.
Right to Work Checks
Now until 30 June 2021
To transition to the new points based immigration system, employers will be given six months to continue to accept passports and national identity cards of EU nationals in the usual way as evidence of their right to work in the UK. EU nationals may alternatively opt to provide their evidence through the Government’s online right to work checking service. When using this method, the employee will need to provide you with a share code either directly themselves, or via the online service where you will then receive a notification email. They will be able to do this until 30 June 2021.
1 July 2021 onwards
From 1 July 2021, Employers will be required to see proof of an EU national’s immigration status either from the EU settlement scheme or from the new points-based immigration system.
Impact on Recruitment
There are sectors that are likely to be affected by the new points-based system since recruiting overseas will force businesses to recruit specifically to help to aid employee retention, productivity and access capabilities from a wider skilled pool as opposed to recruiting migrant labour only for the purpose of accessing EU nationals for low skilled work and pay.
The definition of ‘skilled worker’ under the new scheme has also been expanded to include jobs that are equivalent to A level education standards, and so there is concern within sectors such as retail, hospitality, NHS and social care, agriculture and food production for instance, on how the new system will affect their ability to recruit.
What should businesses do next?
We would recommend the following immediate actions to help you prepare for 2021 and the changes to how the UK will recruit from outside of the UK:
- Get a sponsor licence sooner rather than later. We expect a significant demand will be put on the home office in the coming weeks as businesses start preparing for Brexit. This will be compounded by the impact of the current Covid-19 situation.
- Talk to recruitment teams about wider range of jobs which can be sponsored
- Budget for increased visa costs
- Monitor EU employees’ position on whether they are applying for the EU settlement
- Plan for British employees who will need to travel to the EU next year and establish if a visa will be require
- EU nationals in UK by end of transition period but bear in mind Covid-19 and quarantine rules on entering UK
The following Government guidance publications are available:
UK Points Based Immigration System: Further Details
The UK Points Based ImmigrationSystem: An Introduction for Employers
UK Visa Sponsorship for Employers
The UK’s Points Based Immigration System: An Introduction for EU Students
Checking a Job Applicant’s Right to Work
Brexit should be a top priority for businesses alongside Covid-19; you can access our Brexit HR Audit which will help you in identifying whether you are Brexit ready, along with our GDPR Risk and Compliance audit, which will help you to assess if your current working practices remain compliant, as we expect the UK to introduce its own data protection laws post Brexit which it is anticipated will be based on the existing laws.
Now is also a good time to review your recruitment needs for 2021 to determine whether you are likely to need to recruit from outside the UK and if so, whether you will need to apply to become a sponsor. We would recommend you do this sooner rather than later; current processing times are around 8 weeks.
You can also watch our two recent webinar recordings, on demand, for further HR guidance: