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17 April 2020 | Comment | Article by Louise Price

Points Based Immigration System: government publishes guidance on proposal

On 9 April 2020, the government published guidance to introduce employers to the proposed points-based immigration system to come into force from 1 January 2021. The government previously published a policy statement setting out the initial details of its plans on 19 February 2020.

From 1 January 2021, free movement will end and the UK will introduce a new points-based immigration system which will treat EU and non-EU citizens equally. The new system will not apply to EU citizens already living in the UK by 31 December 2020. They and their family members are still eligible to apply under the EU Settlement Scheme and have until 30 June 2021 to make an application.

Aims of the new immigration system

The government’s stated aim is to provide a simple, effective and flexible system which allows skilled workers from around the world to come to the UK. It is designed to be an employer-led system. Under the new points-based immigration system, points will be assigned for specific skills, qualifications, salaries and also for shortage occupations. Visas will then be awarded to those who gain enough points.

The government recognises that this represents a significant change for employers in the UK, who will need time to adapt. This guidance is intended to provide an overview of the new system and the steps employers can take to prepare.

Skilled workers

From 1 January 2021, anyone coming to the UK to work will need to demonstrate that:

  • they have a job offer from a Home Office approved sponsor;
  • the job offer is at the required skill level – RQF 3 or above (A Level and equivalent); and
  • they speak English.

In addition to this:

  • they must earn more than the required minimum salary threshold; or
  • if they earn less than the required minimum salary threshold, but no less than £20,480, they may still be eligible if they can demonstrate that they have a job offer in a specific shortage occupation or a PhD relevant to the job.

Anyone coming to work in the UK will need to be paid the higher of the specific salary threshold for their occupation – the ‘going rate’ – and the general salary threshold.

The general minimum salary threshold will be £25,600. However, some applicants will be able to “trade” characteristics, such as their qualifications, against a lower salary.

As is currently the case, all jobs will have a corresponding Standard Occupational Classification (SOC) code. Current skill levels for SOC codes along with the specific salary threshold for that occupation are set out in Appendix J of the Immigration Rules. However, The Immigration Rules will be updated in order to expand the list of occupations that will be eligible for the Skilled Work route.

How the system will work for skilled workers

A total of 70 points is needed before a skilled worker can apply to work in the UK. The point awarded against each characteristic is shown in the table below. However please note that some characteristics are “tradeable” whilst others are not. The first three characteristics are therefore mandatory.

Characteristics Tradeable Points
Offer of job by approved sponsor No 20
Job at appropriate skill level No 20
Speaks English at required level No 10
Salary of £20,480 to £23,039 Yes 0
Salary of £23,040 to £25,599 Yes 10
Salary of £25,600 or above Yes 20
Job in a shortage occupation as designated by the Migration Advisory Committee Yes 20
Education qualification: PhD in a subject relevant to the job Yes 10
Education qualification: PhD in a STEM subject relevant to the job Yes 20

Highly skilled workers

From January 2021, the current Global Talent route will open to EU citizens on the same basis as non-EU citizens. This means the most highly skilled, who can achieve the required level of points, will be able to enter the UK without a job offer if they are endorsed by the relevant competent body.

Lower-skilled workers

There will not be an immigration route specifically for those who do not meet the skills or salary threshold for the skilled worker route. However, employers can still use the youth mobility scheme and the UK has arrangements in place with eight countries and territories to enable around 20,000 young people to come to the UK each year.

Other routes

Other Initiatives are being explored for scientists, graduates and NHS workers and a new Graduate Immigration Route will be available to international students who have completed a degree in the UK from summer 2021. This will enable international students to remain in the UK and work at any skill level for two years after they have completed their studies. The government has also committed to expanding the current pilot scheme for seasonal workers in agriculture which will be quadrupled in size to 10,000 places.

Implications for Employers

The government has stated that they are delivering on their manifesto commitment to reduce overall migration numbers. They are therefore ending free movement and do not intend to implement a route for lower-skilled workers. They have made it clear that the new system is not intended to recreate the outcomes from free movement and employers are expected to move away from reliance on the UK’s immigration system.

This will have major implications for employers in some sectors who have traditionally relied on a predominantly European workforce to carry out low skilled or seasonal work. Such employers will now have to turn to the domestic workforce and given the anticipated economic downturn and a resultant increase in unemployment caused by the COVID-19 crisis, it seems unlikely that there will be any change in Government policy in this area.

Such employers should consider putting contingency plans in place now to mitigate the risk of not being able to recruit staff as easily from 2021. Businesses in sectors such as care, food and hospitality and construction may be particularly exposed.

For other employers who anticipate that they will wish to employ skilled EU (or non-EU) workers after 1 January 2021 there are a number of implications:

  • Employers will need to sponsor EU citizens who enter the UK after 31 December 2020 before they can employ them in the UK. Employers without a sponsor licence should apply for a licence as soon as possible as the Home Office is likely to receive a surge in applications which could delay processing times.
  • With more employees requiring sponsorship in future, the importance of employers complying fully with their sponsor duties is even more significant to avoid their licence being revoked.
  • Recruitment costs could increase significantly from 1 January 2021 as the Immigration Skills Charge (up to £1,000 per year of the visa) and Immigration Health Surcharge (£400 per year for each applicant and their dependants) will apply to EU citizens as well as non-EU citizens entering the UK for sponsored employment. The application fee for a sponsor’s licence is also £1476 for large sponsors.
  • Employers will need to be conscious of the additional time it will take for an EU citizen to obtain a visa to allow them to work in the UK after 1 January 2021.

For further advice on the new Points Based Immigration System or any other Business Immigration queries please contact our dedicated Employment and HR Services team.

Author bio

A highly specialised lawyer, Louise is a Partner and Head of Employment and HR services. Her expertise includes corporate support work, TUPE, pensions and employee benefits advice. She regularly advises private, public and third sector clients regarding large scale TUPE transfers of staff including drafting indemnities and warranties, advising on potential employment and pension liabilities, information and consultation obligations, and providing best value guidance.

Disclaimer: The information on the Hugh James website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. If you would like to ensure the commentary reflects current legislation, case law or best practice, please contact the blog author.

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