How can businesses prepare for the new points-based immigration system?

The new points-based immigration system which will apply from 1 January 2021 presents opportunities as well as challenges. Businesses keen to get ahead are advised to take steps now to prepare

27 February 2020

Overview

On 19 February 2020, the UK government published a policy statement setting out the new points-based immigration system (the ‘New System’) which will apply from 1 January 2021. The New System will introduce some significant changes, most of which will affect the current Tier two work visa route and will have wide-ranging and long-term effects on various sectors in the UK. 

Key changes

Under the New System, EU and non-EU migrant workers will be treated the same. All would be migrants, who must speak English, will need a job offer that is

  • from an approved sponsor
  • at the required skill level and
  • paid at the required salary

Points are awarded for each of these elements and a migrant will need to obtain 70 points to obtain a Tier two visa.

Job offer from an approved sponsor

Under the New System, a job offer by an approved sponsor is worth 20 points. Businesses wishing to employ EU and non-EU nationals will need to register as a sponsor with the Home Office. This involves submitting documents showing that the business is genuine, that the business has policies and procedures in place to meet the sponsor’s obligations, and putting in place personnel with responsibility for immigration compliance. Most businesses will be audited by the Home Office before a sponsor licence is issued. 

Requirement to speak English

The applicant must be able to speak English to a certain level and satisfying the English requirement will score the applicant ten points. There is currently no guidance as to what the required level is.

Salary

The minimum salary threshold will be set at £25,600 (with no regional variation across the UK) and meeting the minimum salary threshold will score the applicant 20 points. However, if the applicants can demonstrate that they have a PhD (which is relevant to the job) or a job offer on the Migration Advisory Committee’s ‘shortage occupation’ list, then the salary threshold is lowered to £20,480 (because they will be given extra points accordingly). The current shortage occupation list includes nurses, social workers, civil engineers and IT business analysts. The list will be under regular review so employers should be checking it from time to time.

Skill level

The job offered must be at an appropriate skill level. Following the recommendation by the Migration Advisory Committee, the skill level will be lowered from Regulated Qualifications Framework (‘RQF’) level six (equivalent to a bachelor’s degree) to level three (equivalent to A level). If the role falls within RQF3 or above, then the applicant will score 20 points. 

Lower skilled and lower paid workers

A major concern is that there are no provisions for lower paid workers or lower skilled workers (i.e. below RQF3). The Home Office have stated that UK employers will need to move away from a reliance on the UK’s immigration system for low paid workers and should, instead, look to invest in staff retention and productivity and to increase investment in technology and automation.

This poses a real challenge for sectors, such as social care, hospitality, retail, construction and farming, which are heavily dependent on lower skilled and/or lower paid workers. Whilst the government may explore sector specific options – for example, allowing 10,000 seasonal agricultural workers to pick and pack crops – workforce planning is going to become more costly and complicated. Employers will need to consider if there is any technology or automation they can introduce to reduce reliance on low-skilled workers (although this is unlikely to be a quick solution), They also need to be mindful of the fact that wages may increase as the market becomes more competitive and so it may be worth considering whether there are incentive arrangements which might be introduced to encourage loyalty etc.

Other options

It is worth noting that there are other immigration options for EU and non-EU nationals to come to the UK. For example graduates who have studied in the UK will be able to remain in the UK under the two-year post-study work visa which will be reintroduced shortly. The new Global Talent visa (the rebranded version of the Tier one (Exceptional Talent) visa) does not require the applicant to have a job offer, skilled role or an appropriate salary level. Instead, the applicant will need an endorsement from a recognised endorsing body (eg the Arts Council, Tech Nation or UK Research and Innovation). The Start-up and Innovator visas or other categories (eg family visas or UK Ancestry visas) which are outside the point-based system should also be considered. See Personal Immigration for further information.

EU/non-EU nationals and Right to Work checks

EU migrants living in the UK before 31 December 2020 must apply for pre-settled or settled status under the EU Settlement Scheme before 31 June 2021 to retain the right to live and work in the UK. Employers who want to continue to employ EU nationals beyond 1 January 2021 should, therefore, consider a recruitment drive during 2020. For all migrants arriving in the UK on/after 1 January 2021, the New System will treat EU and non-EU nationals equally without offering a preferential route to EU migrants (and their family members). However, there are a few practical differences:

  • Non-EU migrants will be provided with physical evidence for their status (eg Biometric Residence Permit) whereas most EU migrants will have a digital status; and
  • Non-EU migrants will have to attend an appointment at a Visa Application Centre to submit their biometric information (as they do now) whereas EU migrants can make their application online.

Employing an illegal worker carries a fine of up to £20,000 and businesses will need to ensure that they have in place robust ‘Right to Work’ checking processes and that employees carrying out the checks understand the different forms of immigration status of EU and non-EU employees. 

Next steps

The government considers that ‘UK businesses will need to adapt and adjust to the end of free movement’ and employers should be asking themselves the following questions:

  • Do you currently rely on EU workers to fill low-skilled and/or low paid roles?
  • If so, should you recruit more EU nationals before 1 January 2021 when the New System comes into effect?
  • Do you expect to employ non-UK nationals on or after 1 January 2021?
  • If so, you will need to register as a sponsor and put in place compliant systems, personnel and processes
  • How are you going to recruit and retain your workforce in the future?

How can we help?

We have been working with many employers to help them plan for these changes. If you have any questions about your workforce and/or the new points-based immigration system, please get in touch with Huw Cooke, a Senior Associate in our Employment team, or Paul Browne, our Head of International Trade.

Key contact

Paul Browne

Paul Browne Partner

  • Head of International Trade
  • Head of Real Estate
  • Nuclear

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