What does this tell us and what should employers and individuals do now?

After many months (even years) of speculation, the government has revealed initial details of what the new points based system will look like when we come to the end of the transition period on 31 December 2020.

The most important take away is the effect on EU nationals, who will, once the transition period ends, find that their stay in the UK is limited. They will need either to regularise their immigration status, if they have not done so already, or leave the UK, unless they are coming here for a short visit or holiday. Freedom of movement will definitively end on 31 December 2020, at which time EU nationals will become subject to immigration control in the same way as non EU nationals are now.

What are the key points of the new system outlined in the policy statement?

All applicants will need prior approval to come to the UK to work, and to obtain a Certificate of Sponsorship (a work permit) to allow them to take up a post in the UK. They will need to score a minimum of 70 points in order to qualify to work in the UK –the first 50 points must be met by all applicants who must have:

  • a job offer from an approved Home Office sponsor
  • a job which meets the minimum skill level
  • the applicant must meet the English language requirement.

The minimum salary requirement has been reduced from £30,000 to £25,600 p.a. but if the role is to be undertaken by an applicant who meets the ‘new entrant’ definition (this includes international students and those aged 26 or under), the salary requirements will be lower. It will also be possible to ‘trade’ points for roles paying a salary of between £20,480 and £25,600 p.a. if the role is a ‘shortage occupation’ (e.g. nurses or roles within the tech industry), or if the individual has a PhD relevant to the role.

Other important take-aways include:

  • the skill level for qualifying roles is to be lowered to approximately ‘A’ Level or equivalent. Under the current system, roles must be at degree level or above; importantly, the policy paper specifically excludes ‘low skilled’ positions
  • there will be no Resident Labour Market test requirement, meaning that UK employers will no longer need to advertise the position in the UK before recruiting a non British worker
  • the policy paper confirms that the current cap on numbers (currently set at 20,000 a year) is to be ‘suspended’ – the implication being that this may return at some point
  • Tier 1 (General) equivalent to return.

In view of the changes, what do employers need to think about and prepare now?

  • Employers without a sponsor licence must consider whether they will need a licence to expand or even continue their operations in the near future. The Home Office are urging all employers, even those who do not currently employ or who have no plans to employ non British nationals, to obtain a sponsor licence. They have warned that the build-up of outstanding licence applications will inevitably mean long processing times – employers may need to allow 8-12 weeks as opposed to 2-4 weeks, even for straightforward applications, so applying now is advisable
  • Employers with a sponsor licence must take action to prepare for the surge in EU national employees who must now be sponsored: this will involve budgeting for the additional visa costs, and training HR on the legal right to work implications, to ensure they have the employees they need and are fully compliant 
  • Think about EU workers and their family members who are in the workforce now, to ensure they have obtained the right to stay in the UK under the EU Settlement Scheme (having obtained settled or pre-settled status). Those in the UK now or arriving any time up to 31 December 2020 have until 30 June 2021 to apply under the EU Settlement scheme; those arriving after 31 December 2020 will be subject to the new rules. In addition, remember that EU nationals who will be transferring to live in the UK and who need to qualify under the new system in place after 1 January 2021 will need to satisfy the English language requirement, something they have not had to think about before. This will also affect their family members
  • UK employers who hold a sponsorship license should, in light of the above, consider undertaking an audit to ensure they are fully compliant and understand how their rights and obligations will change, bearing in mind the penalties which can and will be imposed on those who are not found to be compliant
  • Employers will need to continue performing right to work checks on all employees in the same way as they do now until 30 June 2021
  • The Home Office has confirmed that the new system should lead to shorter processing times for Certificates of Sponsorship: from 12 weeks down to 4 weeks, as of 2021. This is because advertising will no longer be required, as well as the (temporary) removal of the cap on numbers
  • The system will continue to be expensive – employers will need to factor in visa fees, the Immigration Health Surcharge, the Immigration Skills Charge, and fees for all dependants – the total payable per application is not insignificant.

Most importantly…

There’s not much time! These changes are coming in within the next 10 months, so employers need to focus on recruitment needs and assess what will be required over the coming years, in order to ensure they have the personnel they need in place by the required time. There is now a clear vision of where the government intends to go in terms of immigration, and employers need to be prepared to survive any delays or confusion surrounding the implementation issues which are bound to arise between now and the arrival of the new system arrival on 1 January 2021.

What has been left out?

The policy paper makes no mention of what is to happen to the self-employed. This is particularly relevant now that the entrepreneur visa is no longer available to new entrants. Those people will need to think about making applications under the innovator or start up visa routes. Although these came into being in March 2019, entry into either scheme rests on the notoriously difficult task of getting an endorsement from an authorised body. Alternatively, if an individual seeking to come to the UK is employed overseas already, they could look at coming to the UK as a sole representative of the overseas business (currently this route is outside the points based system).

There will be no change to the rules for family members or students (who must be sponsored to qualify). Note that the post study work route that will open in 2021, which will allow those who have been in the UK under Tier 4 as students to work for a UK employer for up to 2 years.

Note that the government will be bringing out a new immigration bill, details of which are expected later in March.


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