The new points-based immigration system: essentials for HR

The UK's new single points-based immigration system ('PBS') is now in operation in the UK, which will apply to non-EEA nationals from today. EEA & Swiss nationals (who do not qualify under the EU Settlement Scheme) can enter the UK under the PBS from 1 January 2021. In this blog we outline the key information employers need to know about the new system.

Employers who intend to recruit medium (or highly skilled) migrants from the EU or elsewhere will require a Skilled Worker/Intra Company Transfer Sponsor Licence

Tier 2 has been rebranded the Skilled Worker route. Employers require to have a sponsor licence in place in order to sponsor employees through this route. This will include highly-skilled jobs (which were already eligible for sponsorship) as well as medium-skilled jobs which are eligible for sponsorship for the first time. A significantly larger range of jobs will be eligible for sponsorship than is currently the case meaning that an increased number of employers are likely to be involved in the sponsorship process.

Employers intending to sponsor those from outside of the UK should apply for a sponsor licence now if they don’t already have one in order to avoid any delays.

The guidance from UKVI states that existing sponsor licence holders will automatically be granted a new Skilled Worker Licence. Now is the time to consider whether you need to add any overseas group companies from the EU to your licence if you use the Intra Company Transfer route. Adding a linked entity can take many weeks and from 1 January 2021 you might wish to transfer staff from the EU to work in the UK through the PBS for the first time.

Suspension of the Immigration Cap

There is no immigration cap on the number of Skilled Workers coming to the UK under the new system. This was currently set at 20,700 per year for Tier 2 (General) which was split into monthly allocations.

The suspension of the immigration cap is good news for employers as it avoids the uncertainty that has applied at times where the cap has been full. It will also avoid the delays in applying for a Certificate of Sponsorship as under the previous rules employers had to apply on a monthly basis before a cut-off date each month for a restricted Certificate of Sponsorship.

In certain months where the immigration cap has been full, employers had to apply during the following month and in some cases, applications failed altogether on the basis that that cap was full and the employer could not wait any longer.

New 'defined' & 'undefined' Certificates of Sponsorship

There will be two new types of Certificates of Sponsorship, known as 'defined' and 'undefined' to replace 'restricted' and 'unrestricted'.

Employers will apply for a defined Certificate of Sponsorship in situations where the individual they want to sponsor is applying for entry clearance from outside the UK. They must apply for defined certificates as and when they need one, they won't be given an annual allocation.

Whereas if the individual an employer wishes to sponsor will be applying for entry clearance from within the UK, they would apply for an undefined certificate of sponsorship and for this type of certificate they can apply for an annual allocation.

You can find further information on Certificates of Sponsorship here.

Removal of the Resident Labour Market Test

The Resident Labour Market test no longer applies. As a result, employers will not be required to advertise the position they want to fill for a 28-day period. This will mean less paperwork, a faster process and increased certainty.

The removal of the Resident Labour Market test will cut at least 4 weeks off the typical timescales for applying for a Certificate of Sponsorship. In addition, employers will have more certainty in that they will know that they can recruit and sponsor a candidate that they have identified without having to go through the process of testing the resident labour market.

The removal of this test will also reduce the record-keeping requirements for employers who previously had to retain documentation (such as screen shots of adverts and interview notes) to evidence that this test was satisfied in accordance with UKVI requirements.

Skilled Worker Route: Key Eligibility Criteria

In addition to a worker passing the relevant UK criminality checks, they will need to meet the following mandatory requirements:

a job offer at the appropriate skills level (which will reduce from RQ6 (broadly graduate level) to RQ3 (broadly A level or equivalent);

to meet the minimum salary threshold for the job (which will reduce from £30,000 to £25,600 (subject to certain exceptions) or the going rate for the job,); and

be able to speak English to an acceptable standard and to meet the maintenance requirements.

If these requirements are met, then the applicant will reach a total of 70 points. 70 points is the minimum number which a worker needs to be eligible for sponsorship.

If a role does not meet the minimum salary thresholds but it is not lower than £20,480 (or the going rate for the job) then an applicant will have earned 50 points. They may be able to gain another 20 "tradeable" points if they have a job offer in a specific shortage occupation or if they have a PhD relevant to the job.

Health and Care Visa

The UK Government will also introduce a specific health and social care visa as part of the Skilled Worker route. As part of this, there will be fast-track entry, reduced application fees and the immigration health surcharge will not apply.

Intra Company Transfer Applications

Intra Company Transfer applications will broadly remain the same. Applicants must have been employed by the business for 12 months prior to the date of transfer in order to be eligible. The role must be equivalent to RQF6 (which is higher than the skills level which will apply to the Skilled Worker route). In addition, the minimum salary requirement is now £41,500 per year (or the going rate for the job).

The new rules allow Intra Company transferees to switch into a Skilled Worker route (if they meet the requirements), which would mean this could give individuals a possible route to settlement if they wished to remain in the UK. This is a change from the old rules and it may offer increased flexibility.

Whether or not this immigration route remains popular remains to be seen. One of the major benefits under the current rules was the fact that the Resident Labour Market test did not need to be satisfied. As this no longer applies to the Skilled Worker route, employers may be less likely to use it.

The Intra-Company routes will be subject to a review by the Migration Advisory Committee in 2021. It's report is due by the end of October 2021. Further reform of this route is therefore expected at the end of 2021 or early 2022.

Cooling Off Rules

The "cooling off" rules restricted the ability of someone to return to the UK within a 12 month period under a new Tier 2 visa in specific circumstances. These rules will be relaxed - but please take advice on these.

Fees and Costs

Visa application fees will continue to apply under the new system. These were amended on 4 August 2020 and the details are here.

Employers should budget for these costs to be applied to EU workers which may result in a significant cost increase for some employers who meet the costs of these.

The Immigration Skills Charge will be levied on EU citizens coming to the UK from 1 January 2021, on the same basis as currently apply to those from outside of the EU. This is generally a charge of £1,000 per year of the visa, paid upfront.

The Immigration Health Surcharge will continue to be paid by most overseas migrants coming to the UK for more than six months. This cost increased to £624 per year in October 2020. This cost will also apply to dependants as well as to the main applicant. The cost for a family of 4 for a 5-year period will be just under £12,500.

Unsponsored routes

Graduate route

The UK Government has also announced that a new graduate immigration route will be available to international students who have completed a degree in the UK from summer 2021. This will be unsponsored, but applicants will need to switch into another immigration route before their graduate visa expires. Applicants will be able to work, or look for work, in the UK at any skill level for up to 2 years (3 years for a PhD graduate).

We expect employers will have graduates asking to switch into the Skilled Worker route from this visa category before long.

Highly skilled workers

The Global Talent route will be opened up to EU citizens from 1 January 2021. This will allow highly-skilled scientists and researchers to come to the UK without a job offer.

To further close the gap for those who are highly skilled, the UK Government has advised that it is going to create a broader unsponsored route within the points-based system to run alongside the employer-led system. This would allow some highly-skilled workers to come to the UK without a job offer.

This system will not open on 1 January 2021. The UK Government has indicated that this system would be capped. Further details will follow on this.

Low skilled workers

There will be no immigration route for lower-skilled workers (other than the existing temporary routes under Tier 5 such as the Youth Mobility and other routes).