“Immigration” will be splashing across the media again in the coming days. Rule and guidance changes take effect on 6 April, and provide a convenient peg on which commentators can hang their stories. The messages are mixed, and the detail is too complex for good copy. Pulling up the drawbridge? Rolling out the red carpet? What is the coalition Government really doing with immigration?

It is all driven by a policy commitment to reduce annual net migration from hundreds to tens of thousands by the end of this Parliament. Economic migration is one of the levers Government can pull.

The Fox Williams business immigration team offers the following round-up from the employer’s perspective. 

Points Based System (PBS)

The PBS was rolled out from February 2008 and now accounts for most employment and business-related immigration to the UK. The principle of sponsorship whereby a licenced sponsor is responsible for the migrant underpins Tiers 2 to 5. The Government is keen to maximise the leverage the licensing net provides, and to widen it.

Tier 1 – Overview

Tier 1 was intended to offer stand-alone, sponsor-free immigration status to highly skilled migrants most likely to contribute to the UK economy. The coalition Government thinks it picked up a few too many delivery drivers and burger flippers along the way. Now it is changing:

Tier 1 (General) – Gone

The category of choice for the high-earner wanting to access and move jobs freely, the employer hoping to avoid the sponsorship net and the well-qualified jobless who would rather be in the UK than elsewhere.

  • Tier 1 (General) closed to first-time applicants outside the UK on 23 December 2010.
  • Tier 1 (General) closes permanently to applicants in the UK on 6 April 2011.
  • Transitional provisions will enable those already in Tier 1 (General) to keep and extend their status, and to qualify for indefinite leave to remain, subject to meeting eligibility criteria.

What does it mean for employers?
If a prospective employee has a Tier 1 (General) entry clearance or residence permit, you can still employ them and expect them to extend their status provided the role is at an appropriate skill and income level. Tier 1 (General) is no longer an option for first-time applicants and it will not be back.  

Tier 1 (Post-Study Work) – going, going…

A special category allowing non-EEA nationals graduating from UK universities to enter the labour market in a “free transfer”. After two years, they can transfer to another category, if eligible. Immigration minister Damian Green warned this is “too generous” in view of unemployment amongst British graduates. Home Secretary Theresa May duly announced on 22 March that the category “is closed” with effect from April 2012. After that, those who have a job offer and enough points may still be able to switch into a vestigial option within Tier 2 the detail, as yet, uncertain, although the resident labour test may be waived.

What does it mean for employers?
Graduate recruitment from UK universities will have to factor in the coming restrictions whilst, of course, avoiding discrimination in recruitment.

Tier 1 (Entrepreneur)

This little-used category is set to become a great deal more popular now Tier 1 (General) has closed and the Government plans to “roll out the red carpet” to those able to invest in and set up businesses and create jobs. There will be a special type of visitor visa for “prospective entrepreneurs”.

What does this mean to employers?
A great deal, if you are the entrepreneur or one is joining your business. It is not so relevant to established employers as it is not designed for employees.

Tier 1 (Investor)

Another little-used category getting a makeover to encourage wealthy investors (ideally 5 million each) to invest wealth here in return for the right to live here.

What does it mean for employers?
Investors and their dependents are allowed to work, including taking employment, provided the income derived is not relied upon to maintain the investment.

Tier 1 (Exceptional Talent)

Limited to 1,000 visas per year, this special route is for the exceptionally talented likely to become leaders in science, the arts and humanities.

What does it mean for employers?
It answers some complaints from top universities and arts organisations in relation to research posts and similar; it is a safe bet that far more will consider themselves eligible than will ever qualify.

Tier 2

This category is for sponsored, skilled migrants and depends on the valid issue of Certificate of Sponsorship (CoS) by employers who are licensed sponsors. Jobs will be expected to be at graduate level.

Tier 2 (General)

This subcategory which excludes intra company transfers is where the annual quotas will bite. It is where a “new hire” is being sought for a licensed sponsor and the only viable candidate, following prescriptive advertising and recruitment-based Resident Labour Market Test, requires immigration permission to work. “Restricted” (see below) Tier 2 (General) CoS issues will be limited to 20,700 per annum with effect from 6 April. The cap does not affect “Unrestricted” Tier 2 (General), i.e. where the salary is more than £150,000 per year, or the person is switching in-country.

Tier 2 – Intra Company Transfer (ICT)

At one, worrying stage last summer, there was speculation that Tier 2 (ICT) might  be scrapped. Following consultation and robust representation from employers, it is now ring-fenced from the immigration cap. However, it is changing with effect from 6 April:

Currently subdivided into Established Staff, Graduate Trainees, and Skills transfer, Tier 2 ICT is being overhauled.

Established Staff ceases to exist as such, being replaced by “long term” and “short term” sub categories for employees who have worked with an overseas branch of the sponsor for at least 12 months at the point of transfer.

Short term staff may be transferred for up to 12 months, after which there will be an embargo on their return to the UK within Tier 2 for a further 12 months. A minimum salary level of £24,000 is set, along with an expectation that the job will be of broadly of graduate level and a pay commensurate with the standard occupational classification codes.

Long term staff may come for an initial period of three years and one months, extendable up to a maximum of five years but crucially, no longer eligible for indefinite leave to remain at the end of that period and with a 12 months-embargo. The minimum salary for long stay is now set at £40,000, and may rise in future years.

The Skills Transfer subcategory remains for intra-company transferees who are coming purely for the purpose of imparting or receiving skills knowledge, where there is no displacement of a resident role. No prior length of employment is needed. It is limited to a maximum of six months, followed by an embargoed period (which is waived on return as long term staff).

Graduate trainees, on the other hand, must have three months’ prior employment overseas as a minimum, and becoming to follow a structured graduate training programme of up to 12 months, after which there is an embargo period, waived if subsequent return is as a long term staff member.

A word about CoS Allocations

Several words in fact, but fewer than the thousands issued by way of “clarification” by UKBA to licensed employers. From 6 April 2011, certificates of sponsorship (CoS) will be divided into “Restricted” and “Unrestricted” types.

Unrestricted CoS

All ICTs, in-country transfers into Tier 2 and Tier 2 (General) applications where the base salary is over £150,000 per year are “Unrestricted”. In early March, licensed sponsors received a lengthy email from UKBA, attaching an excel spreadsheet, inviting them to a apply for an annual allocation of unrestricted CoS from April 6, 2011. A tight deadline of 11 March 2011 was imposed.

Did you make it?
Many licensed employers did not. There will be another opportunity after 6 April, but sponsors who missed the deadline may find their allocations in the above sub-categories re-set to zero while they wait for a result.

Restricted CoS

All other Tier 2 (General) CoS fall into the restricted category.  In this case, the employer must identify a specific role rather than a blanket allocation, and apply on an individual basis, via a dedicated UKBA portal  for an “empty” allocation which will be live for three months. If unused, it will fall away.

Employers who believed that the interactive sponsor management system (SMS) would be their tool for requesting allocations are understandably bemused by this interim and somewhat ad hoc system, and the short notice at which it was rolled out. Many had already made and received (or so they thought) an ICT allocation valid for several months ahead as part of the annual renewal process, only to be told it will be reset to zero unless they used the spreadsheet, which in many cases could not be emailed per the instructions. To add to the confusion, some employers received emails, sent in error by UKBA, telling them that in fact they had to make a further request via SMS.

UKBA states that these anomalies will end in the summer of 2011 when a streamlined allocation request process is imported into SMS. Apparently, the technology could not keep pace with the changes in arrangements.

Special categories remain for Sports People and Ministers of Religion

What does this mean for employers?

  • Tier 2 is for graduate – level roles only.
  • It will be challenging to obtain a CoS where the salary is below £150,000 per annum, the migrant is not in a “switchable” category in the UK and the salary is below £150,000 per annum.
  • Tier 1 (General) will no longer be an option unless the prospective employee already obtained it before 6 April 2011.
  • Sponsors are limited by the annual quota and individual CoS allocation.

Tier 3

The category for low-skilled workers never opened; the assumption remains that there is enough low skilled labour in the economy already, some of it from the EU accession countries (see Worker Registration Scheme below).

What does this mean for employers?
Tier 3 is not your source of low skilled or unskilled labour!

Tier 4

Tier 4 is for students, sponsored by UK educational institutions who are licensed sponsors and issue a Certificate of Acceptance for Studies (CAS).

There is a general raising of the bar in terms of the level of course and institution which can issue CAS, and a requirement for highly trusted sponsor status from April 2012. The detail is beyond the scope of this briefing which is primarily aimed at employment-related immigration.

What does this mean for employers?

  • Full-time students at Recognised Bodies (Universities) will still be able to work for 20 hours per week in term time, and to undertake work placements where the study ratio is 50/50.
  • Ten hours per week is the maximum students at other colleges will be allowed to work; some may have no right to work at all, and work placements would have to be 66/33 in favour of study/work.
  • Dependents of students are still allowed to work.

Tier 5 – Temporary and Youth mobility

This Tier is for short term, temporary and youth mobility only, and will be subject to ongoing consultation. It is not a platform for long-term employment.

What does this mean for employers?
At the moment, not so much has changed. Tier 5 is generally not relevant to positions of commercial or strategic significance to employers.

The Worker Registration Scheme – imminent closure

Surprisingly little comment has been apparent in the media, but the worker registration scheme, by which employers have been required to register EU nationals who are members of the “Accession 8” states which joint the EU on 1 May 2004, will close on 30 April 2011.

The reason is a purely legal one; the treaty of accession means that the UK is unable to continue to apply restrictions on access to the labour market for more than seven years from the date of accession.  

Bulgaria and Romania, the “Accession 2” which joined the EU in 2007, continue to be subject to the more stringent labour market access restrictions applied to them from the outset.

Indefinite Leave to Remain

“Breaking the link to settlement” is a notable element of the Government’s more restrictive immigration policy. It believes that it is too easy for people who come to the UK initially for temporary purposes work or study, primarily to settle permanently here, when their cost might outweigh their contribution.

For example, Tier 2 (ICT) will no longer be a route to indefinite leave to remain in the UK. In future, all applicants for indefinite leave to remain must be clear of unspent criminal convictions, and will be required to demonstrate more rigorously that they and their employers have properly observed the conditions on which any work base permission was granted.

And finally….


The Independent Chief Inspector of the UK Border Agency, John Vine recently published his report into Tier 2 of the PBS. His key recommendations involved the need for consistency  and enforcement in UKBA’s application of the rules underpinning the system.

The message has clearly been received. Enforcement and compliance activity has increased as licensed sponsors receive the UKBA inspection visits they might have expected when applying for their licences. Key Personnel will be familiarising themselves with the new post-6 April Tier 2 & 5 guidance now. This is an excellent time for licensed employers to revisit their sponsor duties and ensure their HR systems and anti-illegal working practices are being maintained robustly and in a non-discriminatory manner.

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