Employment and Immigration Law Update – New immigration system

The Government has released a policy statement regarding plans for our new immigration system from 1 January 2021.

Speed-read – ten things you need to know

1. It will be slightly easier than it is now for non-EU nationals to work in the UK, but MUCH harder for EU nationals who don’t have pre-settled or settled status.
2. More employers will need a sponsor licence.
3. Minimum skill level for sponsorship will drop from degree to A level.
4. Minimum salary for experienced workers will drop from £30,000 to £25,600, or £20,480 for those in shortage occupation or with STEM subject PhD relevant to job. Will still have minimum salary linked to SOC code.
5. No requirement for resident labour market test and no restriction on numbers for sponsored workers, making process of obtaining a visa from outside the UK up to 8 weeks quicker.
6. Still possible to bring dependants.
7. No visa route for “low skilled” workers means certain sectors will be hit hard. Still only 10,000 places for seasonal agricultural workers in 2020.
8. Global Talent route launching 20 February will continue, as will Innovators, Ministers of Religion, Sportspeople, Creative and Youth Mobility.
9. No specific route for the self-employed, but potential unsponsored route to be discussed.
10. Key routes to open from autumn 2020, so visa applications can be made ready for 1 January 2021.

Detailed commentary

End of free movement

The Government has confirmed that free movement of people will end on 31 December 2020. EU nationals will become subject to the same Immigration Rules as other migrants. This means that it will become considerably harder for EU nationals to move to the UK from 1 January 2021. Employers with recruitment plans in the pipeline will wish to maximise free movement opportunities by encouraging EU national recruits to relocate to the UK before the end of the year.

Visitors

EU nationals will not require visas for visits of up to six months. They will continue to be permitted to use e-Gates at the border, but this will be kept under review. But the removal of free movement rights means that EU nationals visiting the UK (and their overseas employers) will need to become familiar with the restrictions on what visitors are and are not permitted to do. The Government has promised “simplified rules and guidance”.

Australian-style points-based system

The Government is promoting our departure from the EU as an opportunity to re-vamp our immigration system. The practical reality is that adding EU nationals into the system is going to increase the burden on individuals, employers, education providers and the Home Office itself. Some changes will clearly have to made if the system is to function.

Boris Johnson and Priti Patel have been particularly keen to introduce “an Australian-style points-based system”. Those of us who have been practising immigration law since the current “Australian-style points-based system” was introduced in 2008 reserve the right to be cynical. The plans published in February indeed bear no resemblance to the Australian system and in many ways are not radically different to what we have now.

Currently the most popular visa route to work in the UK is Tier 2. The current Immigration Rules require a migrant to obtain 70 points. Those points are obtained by having a certificate of sponsorship which confirms they have a job offer from a licensed sponsor, for a role that is deemed suitably skilled and paid at a certain minimum level, meeting an English language requirement and demonstrating they have funds available for maintenance in the first month they are here.

Under the new proposals, would-be workers will need to score 70 points. However, the points are accrued in a slightly different way. There is still an absolute requirement for a job offer from a licensed sponsor, for a role that is suitably skilled and paid, but there is no need to show maintenance funds and the minimum salary requirements have slightly more flexibility, for example if the migrant holds a PhD in a STEM subject, or is filling a shortage occupation.

In reality, the biggest change is not the implementation of a points-based system, but a reduction in the requirements that need to be met to get points.

Skill level

Currently workers can only be sponsored for roles that have been classified as RQF level 6 (degree level) or above. From 1 January 2021, sponsorship will be permitted for roles at RQF level 3 (A level) and above. This will increase the range of roles that can be sponsored.

The MAC has recently made recommendations about adjustments to the list of roles skilled to RQF3. In particular, they suggested removing waiters/waitresses, whilst adding some (but not all) construction roles, childminders, teaching assistants and educational support assistants. It remains to be seen if those recommendations will be accepted.

Minimum salary

The policy statement confirms the government will not introduce regional salary variations and will not allow the overall minimum salary to be pro-rated for part time workers. However, they have indicated they may give further consideration to potential flexibility for migrants returning to work after having children.

The Government has accepted the MAC’s recommendation that as the required skill level has been reduced, the overall minimum salary required for skilled workers should also be reduced. They intend to lower this from £30,000 to £25,600.

It will continue to be the case that in addition to being paid the overall minimum salary, the migrant will need to be paid a minimum salary determined by their SOC code, which the Government refers to as “the going rate”.

As part of the new plans to trade points for shortage occupations and PhDs against minimum salary rules, there are cases where the overall minimum will actually be £20,480.  The going rate may also be 10 or 20% lower than it would normally be. The greatest leeway will be for shortage occupations, or migrants holding a STEM subject PhD relevant to the role. There will be a lesser concession for those holding other PhDs in other subjects relevant to the job.

When an employer considers whether they are paying a salary that is sufficient for the migrant to get a visa, there will be multiple different requirements to consider, making the system even more complicated than it is now.

In reality, the biggest change is not the implementation of a points-based system, but a reduction in the requirements that need to be met to get points.

Recruitment processes

Currently it is only possible to sponsor a migrant worker, if the role is deemed to be a shortage occupation, or a resident labour market test (RLMT) has been completed (or an RLMT exemption applies).  The RLMT involves advertising the role for at least 28 days in a particular way and demonstrating there is no suitable settled worker who applies for the job.  This places a considerable burden on sponsors and acts as a brake on recruitment. We welcome the Government’s announcement that from 1 January 2021, the RLMT will no longer be required.

Under our current system there is a quota on how many Tier 2 General migrants can come from outside the UK.  There is a monthly process to request a restricted Certificate of Sponsorship.  Again this slows down recruitment and at times when the quota has been exceeded, has prevented hiring altogether.  It is good news that from 1 January 2021, the Government will cease to apply this quota on skilled workers.

“Low skilled” workers

Previous policy announcements made under Theresa May had suggested the Government would provide a temporary visa route for workers, that would allow them to come to the UK for up to 12 months, followed by a 12 month cooling off period. Whilst work could have been done at any level, this was seen as really being there to help employers of lower skilled workers, who would otherwise face a cliff edge in being able to recruit EU nationals.

However, the current administration has declared that they will not implement a route for lower skilled workers. They suggest the EU nationals already in the UK will meet the demand and note that the ongoing option to bring dependants, means they could fill these vacancies.They also refer to the youth mobility scheme which brings around 20,000 young people to the UK each year. Note at this time there is no suggestion of this being expanded to include EU countries.

The Government’s position is that employers will have to adapt and adjust to the end of free movement.  This is particularly bad news for sectors that currently rely on large numbers of EU nationals to do work below RQF3 and in particular those where there is a steady turnover of staff. In particular agriculture, hospitality and social care sectors are likely to be affected. There are also concerns for the construction industry, that at a time when a lot of large projects are planned there will not be sufficient numbers of labourers.

The current sector based scheme for seasonal agricultural workers will be expanded to 10,000 places for 2020, but this is a drop in the ocean. It seems there is currently no desire to put other sector based schemes in place.

Highly skilled workers

The Global Talent route (see article below) will be expanded to include EU nationals.

Self-employed workers

The announcement confirms there will be no dedicated route for self-employed people.  They will be restricted to the existing Innovator route (aimed at those setting up a business which will employ other people), or existing short term provisions for visiting artists, entertainers and musicians. This will have an impact on sectors which rely on freelancers and consultants.

In particular, we anticipate that this may result in changes to the construction sector, where a significant proportion of the workforce is currently engaged on a self-employed basis.

There is the suggestion of a possible future unsponsored route within the points-based system, for limited numbers of people. The Government is keen not to repeat mistakes previously made with Tier 1 General visas and proposals will be explored over this coming year.

Students

Student visa rules will also be extended to EU nationals. This means that they will require an offer from an approved educational institution, a minimum level of English and must hold funds for maintenance. The cost of study will increase for them, as they will not only require a visa but will also have to pay the immigration health surcharge.

Most universities already hold a sponsor licence, but schools and colleges may find they are affected if they currently have EU students but no Tier 4 provision. We are still awaiting news on what the tuition fee regime will be for EU students.

Visa application processes

New Immigration Rules should be introduced from the autumn, to allow migrants to apply for visas in time for 1 January 2021.

Applications will continue to be made on online. The Government has confirmed that when submitting their application, EU nationals will need to be pay the Immigration Health Surcharge, as well as visa application fees.

Non-EU citizens will continue to enrol biometrics at visa application centres. However, the plan is for EU nationals to enrol facial biometrics using smartphone self-enrolment (with no fingerprints required initially).

EU nationals will be issued with e-visas, in a similar way to the settled status scheme.  Employers will therefore need to check their right to work online.

Actions for employers

Employers need to start preparing now for the new system.

If you do not already hold a sponsor licence and anticipate that you will need to sponsor migrants in future, you should start the process of applying for a licence. This includes understanding the Home Office’s expectations of sponsors. Our Immigration Team has a wealth of experience in providing support with sponsor licence applications and training on your sponsorship duties and management.

It is important that employers understand and budget for increased recruitment costs that will arise from sponsorship. Whilst some costs may be passed onto the migrant, others (such as the Immigration Skills Charge) must be covered by the employer.

We recommend developing a policy on what you will pay for and what you would expect the migrant to cover. If you are providing additional financial support, then you may wish to implement clawback agreements to ensure some proportion of costs can be recovered if the migrant leaves employment earlier than expected.

Once free movement ends, we anticipate that the war for talent will intensify further and it will also become harder to recruit for lower skilled roles. There will be an increased need to train and develop existing staff and to offer opportunities to those who are perhaps not immediately qualified to do the job. Employers will need to focus on recruitment and retention strategies. Our Employment team would be pleased to discuss these issues further with you.

This article is from the February 2020 issue of Employment and Immigration Law Update, our monthly newsletter for HR professionals. To download the latest issue, please visit the newsletter section of our website. For further information please contact a member of Birketts’ Immigration Team.