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Brexit and the new points based immigration system — practical considerations for HR professionals

Mandy Higgins looks at how HR professionals need to prepare for the changes now.

The impact of COVID-19 and the resulting lockdown has obscured the fact that there are significant changes occurring in January 2021 that will fundamentally change immigration processes and compliance.

On 31 December 2020, free movement ended along with the Brexit transition period. On 1 January 2021, a new single, global points-based immigration system (PBS) came into force. The new system applies to EEA and non-EEA citizens (unless they qualify under the Settlement Scheme as a result of living in the UK).

HR professionals need to prepare for the changes now.

We consider the issues that are concerning our HR clients and share answers to some of the questions that we have recently been asked:

  1. Do I need to check that current EEA employees have applied or been granted pre-settled or settled status?
  2. How does the new immigration system work?
  3. Do we need a sponsor licence?
  4. We already have a sponsor licence. What are the key changes?
  5. Do our HR and Recruitment teams need training on the new PBS?
  6. Does the new PBS apply to low skilled jobs?
  7. We have employees who regularly travel to the EU on business. Will they need a work visa after 1 January 2021?

Do I need to check that current EEA employees have applied or been granted pre-settled or settled status?

There is no requirement to carry out retrospective right to work checks for existing EEA employees to confirm that they have pre-settled or settled status. In other words, if you have conducted a compliant right to work check for a current EEA employee before 1 January 2021, you do not need to repeat this when the transition period ends.

At present, and up to 30 June 2021, you can continue to accept an EEA passport or national ID card as evidence of an individual’s right to work.

However, current EEA employees who are eligible but do not apply to the scheme by 30 June 2021 will lose their right to live and work in the UK.

Do not assume that your current EEA employees will have already applied to the Settlement Scheme. However, be wary of asking to see evidence that an employee has applied to the scheme as Government guidance suggests that, up to 30 June 2021, an employer that insists on seeing evidence of settled or pre-settled status risks a discrimination complaint.

What you can do is communicate with your existing staff to offer support and advice to ensure that they are aware of their eligibility for pre-settled or settled status and the process for applying. The Home Office has produced an employer toolkit to help to explain the process.

How does the new immigration system work?

UK Visas and Immigration (UKVI) has published 'The UK's points-based immigration system: An introduction for employers'. This 12-page document provides a useful overview of the new rules.

From 1 January 2021, the new Points Based System (PBS) will apply to all prospective job applicants who are outside of the UK resident labour market and are seeking employment in the UK in occupations requiring ‘skilled workers’ – the Skilled Worker Route. That will include highly skilled jobs (which are currently eligible for sponsorship) as well as medium-skilled jobs (broadly A-Level standard or equivalent) for the first time.

All employers in the UK seeking to employ those workers will need to have a sponsor license issued by the Home Office.

From 1 January 2021, all job applicants from outside the UK resident labour market must apply and provide evidence that they meet the specific requirements for which they will score points.

Initially, an applicant will need to demonstrate the following mandatory requirements:

  • A job offer from a Home Office licenced sponsor;
  • The job offer is at the required skill level (A level and equivalent);
  • They speak English to the required standard.

The new PBS also introduces new salary requirements. Each job offer must typically meet a new minimum salary threshold: - the higher of £25,600 or the going rate for the role.

Job applicants can ‘trade’ certain characteristics in substitution for a lower salary. If the salary offered is below the minimum threshold, but no less than £20,480, a job applicant may still be eligible if they have:

  • a job offer in a shortage occupation;
  • a PhD relevant to the job; or
  • a PhD in a STEM (science, technology, engineering and maths) subject relevant to the job.

‘Trading’ points examples:

  • An applicant who has secured a job offer as an electrical engineer (a shortage occupation) could be paid a salary below the going rate for the role.
  • A lab technician who has secured a job offer on a salary of £21,000 could be permitted to come to the UK if they had a relevant STEM PhD in biochemistry.

All job applicants will be required to obtain a minimum of 70 points in order to qualify.

Do we need a sponsor licence?

Employers that do not currently have a sponsor licence should apply if they plan to recruit EEA and/or non-EEA nationals after 1 January 2021.

Under the new PBS, the reduction in minimum salary thresholds (£30,000 to £25,600 ), the removal of advertising requirements under the resident labour market test and the fall in the relevant skills level from RQF6 (graduate level) to RQF3 (A-Level standard) is likely to result in a significant increase in the number of candidates applying for advertised roles.

It is likely that candidates will have an increased expectation that they could be sponsored as the resident labour market test will no longer prevent sponsorship where there are suitable settled workers also applying. This will result in a larger number of job roles capable of sponsorship than were previously available and a larger number of applicants are likely.

It is advisable to act now if you do not already have a sponsor licence to ensure that you are able to recruit the talent your organisation will require from January 2021. The process takes approximately eight weeks and demand is currently high. We can support you with your application which essentially involves ensuring that your business meets the suitability and eligibility criteria, nominating staff to take on roles to manage the sponsor licence and providing the correct supporting documentation.

UKVI has produced a useful one-page 'employers guide to becoming a licenced sponsor of skilled migrant workers' which should be read alongside the more detailed guidance but breaks the process down into four clear steps.

We already have a sponsor licence — what are the key changes?

If your organisation currently holds a sponsor licence under the Tier 2 General category, then you do not need to apply for a new licence as it will be automatically converted to the new ‘Skilled Worker’ category. However, the original expiry date will apply. In other words, your sponsor licence will be automatically re-labelled but the expiry date will not be extended.  

Also, consider that current sponsored migrants wanting to extend their stay after 1 January 2021 will have to do so under the new rules – they will not only be relevant for new recruits.

The key changes from Tier 2 General to the new PBS system are:

  • The Tier 2 (General) route will be replaced by the new ‘Skilled Worker’ route.
  • The Tier 2 (ICT) route will be replaced by the ‘Intra-Company Transfer” route.
  • EU migrants will be subject to the new system.
  • The resident labour market test (the ‘advertising requirement’) will be removed.
  • The annual cap on Tier 2 General visas (currently 20,700 per year) will be removed.
  • Migrants must achieve 70 points based on job offer, skill level, English language, salary and qualifications.
  • The minimum salary under the Skilled Worker route will be £25,600 (or £20,480 for a shortage occupation or relevant PhD). It is currently £30,000.
  • The minimum skill level for Skilled Worker route will be reduced from RQF Level 6 (graduate level) to RQF Level 3 (A level standard) so more roles are covered under the new PBS.

You are likely to be making greater use of your sponsor licence from January 2021 so it is worth preparing for the following:

  • Increased costs when recruiting EEA nationals, which will include sponsorship costs as well as visa fees and charges. These will need to be factored into your recruitment budgets.
  • Assess how many additional certificates of sponsorship you are likely to require from January 2021.
  • The need for internal training on the new rules so that your staff are prepared (see below).

Do our HR and Recruitment teams need training on the new PBS?

The relevant teams in your organisation will need to be aware of the new rules to avoid a reduction in productivity and a loss of talent as well as minimising costs.

Consider whether there is an internal training need for your HR and Recruitment teams and for those with responsibility on your current sponsor licence. This includes consideration of whether you have the correct resource levels in place to manage a rise in your sponsored workforce to ensure that visa holders with expiry dates are monitored and reporting responsibilities are complied with. Do you have sufficient Level 1 Users or do more staff need to be trained to use the Sponsor Management System?

The PBS will significantly reform the current routes for sponsoring workers. For skilled workers, some of the current requirements such as compulsory advertising under the resident labour market test will be removed so you will be able to make an offer to the best candidate regardless of their immigration status. It will be possible to sponsor skilled workers for jobs at A-level equivalent rather than the existing degree level. There will also be lower salary thresholds and the introduction of ‘tradeable’ points-scoring criteria.

Consider whether your teams will require training so that they are aware of the job roles that will be eligible for sponsorship under the PBS and the criteria that will need to be met.

We are currently working with a number of clients to ensure that their teams are ready for the changes. We are happy to assist you with any training requirements.

Does the new PBS apply to low skilled jobs?

There is currently no route for low-skilled workers because low skilled roles (below A level standard) are not covered by the new system.

Consider whether the typical vacancies arising in your business will qualify under the new requirements. Recruiting EEA nationals will be more complex, expensive and time consuming from January 2021, where possible at all.

Because all EEA nationals who arrive in Britain prior to 11pm on 31 December 2020 can continue to live and work in the UK until 30 June 2021 (provided they have applied to the Settlement Scheme at this point), you can use these dates to flex your recruitment plans and staffing levels to ensure that you fill gaps in order to have a stable workforce for your business needs going into 2021.

We have employees who regularly travel to the EU on business. Will they need a work visa after 1 January 2021?

Business travel to the EU after 1 January 2020 will need consideration and planning. Whilst the rules will depend on the EU country being visited, visa-free travel will usually only be permitted for UK passport holders for a limited number of permitted business activities.

It is advisable to identify any business travellers who may need to visit the EU next year. You will need to familiarise yourself with the business visitor rules of the UK and also any relevant EU countries they may need to visit. Identify what business activities they are likely to need to carry out. It is the proposed activities of the business traveller that is important here rather than the duration or frequency of travel. Permitted business activity is likely to cover business meetings with colleagues, clients and customers or attending work-related conferences and exhibitions. Any work activity beyond this is likely to require a work visa under the rules of the EU country being visited. 

Even when the duration and business activities being carried out fall clearly within the business travel rules for the EU country in question, it is advisable to brief business travellers to ensure that they know how the rules apply to them. A letter on company letterhead outlining the purpose of the visit and the work to be carried out can assist to facilitate entry at the relevant EU border.

You should also consider reviewing and updating any business travel policies which cover EU travel.

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