Details of the new points-based immigration system from 1 January 2021 announced

The government has this week published a policy statement on the UK's points-based immigration system, confirming that from 1 January 2021 free movement will be replaced with a points-based system which will apply to EU and non- EU citizens alike.

We comment below on the new rules, the absence of an immigration route for low skilled workers and also a new immigration category which will be introduced for the most highly skilled workers who will not need a job offer to come to the UK.

It is proposed that the key immigration routes will be opened from Autumn 2020 to allow migrants time to apply ahead of the new rules coming into effect on 1 January 2021. So there is limited time to prepare.

Medium and highly skilled route for those with a job offer

Minimum salary thresholds will be lowered

Following recommendations from the Migration Advisory Committee (MAC) the minimum salary threshold for skilled workers coming to the UK for work is to be lowered from £30,000 to £25,600, with no regional variations on this. The minimum salary level has been dropped to take account of the fact that some medium skilled jobs will be paid lower salaries than those higher skilled jobs which are currently eligible for sponsorship. Employers will have to pay the higher of the (i) going rate for the specific job that they want to sponsor as set out by UKVI; or (ii) this minimum salary threshold.

In some cases, employees will be able to earn less than this minimum rate and still qualify under the rules. This is because additional points can be awarded for those who have a PhD which is relevant to the job, a PhD in a STEM subject which is relevant to the job, or a job which is on the shortage occupation list - and these additional points will compensate for a lower salary.

New entrants

The salary requirements for so called 'new entrants' will be set at 30% less than the rate for experienced workers in any occupation. That means that a minimum salary threshold of £17,920 will apply to them (although a higher 'going rate' may have to be paid depending on the job). It is likely that the criteria and rules in terms of which employees are eligible for a new entrant salary will be changed. Currently these rules apply to employees under 26 years old and those switching from student status.

Medium skilled jobs will be eligible in addition to highly skilled

The skills threshold is to be reduced from RQF6 (which is broadly graduate level) to RQF3 (broadly A level or equivalent), meaning that medium skilled jobs will become eligible for sponsorship. This is good news for employers who will welcome the flexibility to sponsor additional roles.

No immigration cap

There will be no immigration cap on the number of skilled workers coming to the UK (currently this is limited to 20,700 per year for Tier 2 (General)). This will mean that employers will have increased certainty about being able to sponsor someone from the outset of the process. It will also avoid delay as currently as a result of the immigration cap, employers have to apply each month and wait for a decision about whether a certificate of sponsorship has been granted.

Abolition of the RLMT

The resident labour market test will no longer apply. This is good news and will avoid employers having to advertise for a period of 28 days and it will also avoid having to keep evidence such as screenshots of adverts and other paperwork relating to the recruitment and selection process. It should mean a more speedy and efficient process and employers will benefit from more certainty in knowing that they will be able to sponsor a particular employee at an earlier stage of the process.

How will the points requirements work?

Applicants will need to demonstrate that they have a job offer from an approved sponsor; that the job offer is at the required skill level; and that they speak English. Migrants will require to reach a total of 70 points to be eligible to apply, but unlike the previous system applicants will be able to 'trade' characteristics. So, for example, if someone earns less than the required minimum salary threshold, but no less than £20,480, they may still be able to come and work in the UK if they can demonstrate that they have a job offer in a specific shortage occupation, as designated by the MAC (currently the list includes civil engineers, medical practitioners, nurses and psychologists), or that they have a PhD relevant to the job. Over time the Home Office may add additional attributes which can be 'traded' against a lower salary.

New immigration category for highly-skilled workers - without a job offer

From January 2021, the Global Talent route which was introduced from 20 February 2020 will be extended to EU citizens on the same basis as non-EU citizens. The Global Talent visa is for talented and promising individuals in specific sectors who will be able to enter the UK without a job offer if they have the required level of points and are endorsed by a relevant and competent body. This scheme has recently been expanded to be more accessible to those with a background in STEM subjects: see our previous blog.

The Government is also going to create a broader unsponsored route within the points-based system to run alongside the employer-led system. This will allow a small number of the most highly-skilled workers to come to the UK without a job offer. More details will become available in the coming year as this immigration route is not yet fully developed.

What about lower-skilled workers?

There will be no immigration route available for lower-skilled workers (other than for example, the categories for youth mobility and the seasonal agricultural worker scheme which already exist). This will be a significant concern for employers who recruit a significant number of EU workers in low skilled jobs. Once the Brexit transition period ends, there would appear to be limited options available to such employers to replace this source of labour, other than to recruit from the UK labour market.

The Government has estimated that 70% of the existing EU workforce already in the UK would not meet the requirements of the skilled worker route. This demonstrates that there is likely to be a 'gap' that will not be filled going forward by the new points system.

Employer sponsorship

Employers intending to sponsor migrants for the first time should apply for a sponsor licence now. Otherwise if they wait until they need to recruit someone, they may face considerable delays. There is likely to be an increase in the number of employers applying for a sponsor licence over the coming months and this could potentially lead to a back log. Once a sponsor licence has been obtained, it is valid for a 4 year period.

What it means for me?

The immigration rules are a radical departure from the current system of freedom of movement- and there are some important differences from the current Tier 2 rules. Although there has been some relaxation of the rules for skilled workers, the fact that there will be no route for the lower-skilled is significant and will be a concern for businesses in sectors such as hospitality and leisure, the care sector and food processing. Businesses need to identify any potential recruitment gaps now and decide how best to plug them.

Employers should also budget for increased visa and associated costs (that are not currently relevant for EU workers prior to 31 December 2020). Those costs could be significant for those who recruit a significant number of overseas workers and can amount to several thousand pounds per head.

Please get in touch if you would like more information or advice on sponsorship, or on anything else raised in this blog.