New post-Brexit immigration system

Significant changes have been made to the UK’s work, business, study and visit routes.  These routes will apply to EU and non-EU nationals alike from 1 January 2021.  In most circumstances EU and non-EU nationals who require a visa to work in the UK will need to be sponsored by an employer for a Skilled Worker or Intra Company Transfer visa. 

This category has replaced the Tier 2 (General) visa category and is for individuals coming to the UK to work in a job with a sponsoring employer.  It is the main visa route for work purposes.  The employer must register as a sponsor with the Home Office and then sponsor a migrant for a specific job.  The sponsorship process in outline is as follows:

• The sponsor checks that the job will meet the relevant eligibility criteria, in particular skill and salary levels.
• The sponsor applies for / assigns a certificate of sponsorship to the migrant. 
• The migrant applies for entry clearance or permission to stay in the UK.

In order to qualify an applicant must accrue 70 points from a mix of mandatory and tradeable requirements.

The mandatory characteristics are:

• Job offer by an approved sponsor (20 points)
• Job at an appropriate skill level (20 points)
• English language skills at level B1 (intermediate) (10 points)

The balance of 20 tradeable points can be acquired in six different ways:

1. Standard position - where the applicant’s salary equals or exceeds both £25,600 per year and the ‘going rate’ for the occupation as specified in the relevant Standard Occupation Classification (SOC) Code.
2. PhD in a subject relevant to the job - where the applicant has a PhD in a subject relevant to the job and their salary equals or exceeds both £23,040 per year and 90%25 of the ‘going rate’.
3. PhD in a STEM subject relevant to the job - where the applicant has a PhD in a STEM subject relevant to the job and their salary equals or exceeds both £20,480 per year and 80%25 of the ‘going rate’.
4. Shortage Occupation - where the applicant is sponsored for a role on the shortage occupation list and their salary equals or exceeds both £20,480 per year and 80%25 of the ‘going rate’.
5. New entrant - where either the applicant is under 26 on the date of application, or is switching from the Tier 4/Student visa category, or the job offer is for a postdoctoral position, or the person is working toward certain professional qualifications.  Where an applicant meets these criteria, they can be paid a salary that equals or exceeds both £20,480 per year and 70%25 of the ‘going rate’.
6. Eligible health and education occupation codes - this is available for persons being sponsored in the health and education occupation codes (eg, NHS and teaching roles).  Their salary must equal or exceed both £20,480 per year and the ‘going rate’ for the occupation.

The minimum skill level is RQF Level 3 (roles broadly deemed to be at A level), reduced from RQF Level 6 that applied to the Tier 2 (General) category.  This significantly increases the number of roles that will potentially be eligible for sponsorship.  By way of example, RQF Level 3 includes hotel managers, leisure and sports managers, shopkeepers and proprietors, laboratory technicians, electrical and electronics technicians, draughtspersons, youth and community workers, housing officers, counsellors, police officers, graphic designers, fitness instructors, legal associate professionals, business sales executives, sheet metal workers, IT engineers, roofers, plumbers, butchers, and veterinary nurses.

All eligible occupation codes (ie, those at RQF Level 3 and above) are listed in Appendix Skilled Occupations of the Immigration Rules.  This Appendix also contains details of the ‘going rate’ salaries, including the 70%25, 80%25 and 90%25 thresholds.

The sponsor must identify the best fit SOC Code for the role taking into account the job content of the role.  Unhelpfully the SOC Codes do not include lists of example job tasks.  ONS materials are available to help with this, including the ONS Occupation Coding Tool.  This tool has a search function which enables sponsors to narrow down the relevant codes and sets out the typical job tasks and common job titles for the relevant occupation.

Only guaranteed basic gross pay (before income tax and including employee pension and national insurance contributions) should be relied upon.  This is a significant change from the old Tier 2 rules where some allowances could be included.  Where an applicant has given up any allowable elements of salary as part of a salary sacrifice scheme, that will be counted towards this figure. 

Additional complications can arise where the person will be working part-time, or their weekly full-time hours are different from the full-time hours used in the SOC Codes.  Adjusted calculations should be made to assess whether the general salary threshold and ‘going rate’ threshold are met. 

No.  The resident labour market test has been abolished.  This means there is no requirement on employers to advertise the role to demonstrate there are no suitable settled workers, or that the person who will be sponsored is the most suitable candidate for the role.  This will reduce recruitment lead-in times by up to around one month in many cases.

However, Appendix D of the Skilled Worker sponsor guidance has recently been amended to state that evidence of any recruitment activity undertaken for a job must be retained, even where the RLMT does not apply.  The relevant evidence to be retained is essentially the same as it was under the previous Tier 2 (General) regime, including screenshots.  Appendix D also states that if the role was not advertised, the sponsor must be able to explain why it was not advertised and how the sponsor identified that the individual was suitable for the role. 

The recent amendment to Appendix D is unexpected and puts sponsors in a difficult position in deciding what paperwork should be created and retained.  Pending further clarification, where roles are advertised and a selection process has been undertaken, sponsors should continue to retain paperwork from the advertising and selection process in a similar manner to the previous Tier 2 (General) rules.  Where a role was not advertised, sponsors should ensure they are able to explain the reasons for this and why the migrant was appointed (eg, by retaining a memo on file recording this). 

‘Undefined’ and ‘defined’ certificates have replaced ‘unrestricted’ and ‘restricted’ certificated.  Undefined CoS are for in-country applications and defined CoS are for applicants who will be making an entry clearance application (ie, applying from abroad).  Undefined CoS may be assigned by a sponsor immediately, provided that they have an available CoS allocation on their sponsor management system.  Defined CoS must be requested and allocated by the Home Office with the usual turnaround time being one working day.

There is no maximum time that can be spent in the Skilled Worker category and no ‘cooling’ off period will apply.  This means that a person could continue extending their stay in the category indefinitely, if required (eg, if they do not meet the requirements for indefinite leave to remain). 

No significant changes have been made to the Shortage Occupation List, despite the fact that a number of changes were recommended by the Migration Advisory Committee which advises the Government on immigration matters.  The Government has stated that it wishes to assess how the labour market develops following the COVID-19 pandemic and in response to the new immigration system being introduced.  It seems unlikely that changes will be made until well into 2021, at the earliest. 

Controversially, there is very limited provision for roles deemed to be low skilled, including in social care, construction, retail or hospitality.  Many roles in these sectors will not be at a sufficiently high skill level to qualify for sponsorship and the Shortage Occupation List has not been amended to take into account the impact of the ending of EU freedom of movement on recruitment to these sorts of roles.  The Government’s stated policy aim is to shift the focus of our economy away from a reliance on cheap labour from Europe and instead concentrate on investment in technology and automation, with employers having to adjust accordingly. 

In a significant change, switching will be allowed from most immigration categories other than visitor, short-term student, parent of a child student, seasonal worker, domestic worker or a person with leave outside the Immigration Rules.  The means that migrants who have Tier 5 / Temporary Worker visas (eg, Government Authorised Exchange, and Youth Mobility) will be able to switch to the Skilled Worker visa.  Migrants can also switch from Intra Company Transfer to Skilled Worker.  This will reduce costs and disruption for employers and in many cases enable employees to continue working for the employer (rather than have to leave the UK) pending a fresh application being determined.

Provisions to enable established workers to transfer from their employer abroad to work at a related business in the UK, as well as for graduate trainees, remain.  The Tier 2 (Intra Company Transfer) category has been renamed Intra Company Transfer (ICT) and the eligibility criteria remain broadly the same, including the required skill level of RQF Level 6.  There is some additional flexibility in relation to ‘cooling off’ provisions and other minor changes have been made to the category. 

However, given the relative flexibility of the Skilled Worker category, the attraction of the ICT category is likely to be limited, particularly given that time spent in the category does not count towards settlement.  In most cases the only material benefit of using the ICT route, as opposed to the Skilled Worker route, is the absence of an English language requirement. 

The Intra-Company Transfer route is due to be reviewed by the Migration Advisory Committee in 2021, with the MAC’s report due by the end of October 2021.  Further reform of the routes may be made towards the end of 2021 or early 2022.

The Visitor rules that have previously applied to non-EU nationals remain broadly the same and now extend to EU nationals.  The Visitor rules enable people to enter the UK for a range of short term non-substantive and unpaid activities such as attending job interviews and meetings, site visits, signing contract, attending conferences, some intra group activities, visiting family and friends, and certain scientific and research activities.  

Recent changes to the rules include allowing visitors to study at an accredited institution for up to six months (effectively enabling short term study as a visitor), removing the requirement for volunteering to be ‘incidental’ to the main purpose of the visit, and allowing academic visitors who are experts in their field to extend their stay in the UK to a total of 12 months.  

EU nationals will be treated as non-visa nationals, meaning they do not require a visa in order to enter the UK as a Visitor. 

The Frontier Worker Permit has been introduced to enable EU workers who live abroad, but who work in the UK on a regular basis, to continue to be able to do so from 1 January 2021.  The work being undertaken in the UK must be ‘genuine and effective’.  

The key requirements are that an applicant must be an EU, EEA or Swiss national who is not primarily resident in the UK and is either:

• a worker in the UK; or
• self-employed in the UK; or
• a person who has retained the status of employed or self-employed.

In order not to be primarily resident in the UK, the person should be present in the UK for less than 180 days in any 12 month period and (save in exceptional circumstances) have returned to their country of residence at least once in the past six months period or twice in the past 12 months.

Frontier workers who were employed in the UK by 31 December 2020 can continue to enter the UK using their valid EU national identity card or national passport until 30 June 2021.  From 1 July 2021, frontier workers must hold a valid Frontier Worker Permit in order to enter the UK as a frontier worker.  Frontier Worker Work Permits will be valid for a five year initial period.

Most other categories including UK Ancestry, Tier 5 / Temporary Worker (youth mobility, religious workers, charity workers, creative and sporting workers, government authorised exchange), and Start-up and Innovator have not materially changed.  There have been some changes to the Global Talent route with additional endorsement options for academic and research staff. 

Further changes may be made to the immigration system in the weeks and months ahead.  For example, the introduction of a new unsponsored work visa category is under consideration.  Further, the conclusion of a trade deal between the UK and the EU may lay the platform for the possibility of some uniform arrangements being agreed with the EU in some areas (eg, youth mobility, and British nationals working in the EU), subject to the terms of more detailed provisions that may be agreed in future.

There are a number of important steps for employers to take:

• Sponsor licence applications - employers who are not currently registered as sponsors with the Home Office and who are likely to need to recruit EU or other foreign nationals from 1 January 2021 should consider applying for a sponsor licence now.  This may help to reduce delays in future recruitment exercises.   
• Existing sponsor licences – Tier 2 (General) and Tier 2 (Intra Company Transfer) licences will have been automatically be converted to Skilled Worker and Intra Company Transfer licences respectively with effect from 1 December 2020.  Sponsors should, however, consider whether their licences reflects future requirements.  For example, do sites or locations need to be added to the licence, or subsidiary companies linked as branches or added to the licence?  Sponsors should also check that they have sufficient undefined CoS taking into account likely future requirements and apply for additional undefined CoS via the sponsor management system were this is not the case.
• Systems, policies and resourcing – immigration policies, procedures and template documents should be reviewed and amended in light of the changes to the rules.  Sponsors should also consider resourcing requirements (eg, budgets and staff) taking into account any likely increase in the number of visas that will be sponsored in future.
• Job role analysis – employers should consider undertaking an analysis of the roles which will and will not qualify for sponsorship for a Skilled Worker visa and the key requirements that will apply (eg, minimum salary level).
• Unskilled labour - employers who have historically relied on low skilled European migrant labour should take steps to plan for how these roles will be filled in future.
• Existing EU staff – employers should ensure that existing EU staff who were resident in the UK on or before 31 December 2020 are aware of the requirement on them to apply under the EU Settlement Scheme by the deadline of 30 June 2021.