On 1 January 2021, the existing working rights of EU citizens entering the UK will end. A modified version of the current ‘Points Based System’ that is now in place exclusively for non-EU workers will extend next year to anyone who is not British and Irish. Certain EU and non-EU nationals covered under the existing provisions will also be exempt. This article explains the proposed changes and what steps employers should take to minimise business disruption.
The existing Points-based system
The Rules provide several routes that enable non-EU citizens to work in the country. Most fall within the Tier 2 category which broadly covers those taking up permanent or temporary skilled positions either because the vacancy cannot be filled by a ‘settled’ person and/or to accommodate the transfer of workers employed by multi-national companies overseas to a UK-based branch of the organisation. A skilled job is generally deemed to be at graduate level or above and must be matched by a minimum salary depending on the role.
Employers wishing to employ a non-EU worker in this work category must first have in place a Sponsor Licence. A single licence can be used to sponsor any number of workers and at any UK site. The application is assessed by the Home Office and an approved licence can be renewed every four years. The applicant must demonstrate solvency; that the individual visa requirements (below) can be met; and that appropriate systems are in place to enable compliance with a suite of sponsorship duties.
The ‘new’ Points-based system
The number of sponsored workers generally entering the UK is now capped annually at 20,700 (a significant number of UK visa holders already in the UK are exempt from this limit). The overall cap will be suspended in 2021.
As of 1 January 2021, with the exception of intra-company transfers, employers will be able to recruit EU and non-EU workers alike in lower skilled roles. A skilled role will encompass positions that are deemed to be at the equivalent of A-level qualifications and above, rather than at degree level or above. This will not preclude a graduate from undertaking a role that is less skilled.
This adjustment will bring about a corresponding drop to the minimum salary requirements. The general threshold currently in place is £30,000, but this will fall to a level between £20,480 and £25,600 depending on the role, the sector and the ‘going rate’ for a particular role (these rates are calculated by Annual Surveys of Hours and Earnings or the appropriate national public sector pay scales). As under the existing system, the going rates for individual occupations can be pro-rated depending on the individual’s working pattern provided the total general salary threshold is met.
General exemptions will apply to the new standard thresholds (as they do now) including, for example, to less experienced workers who are at the start of their career. Experienced workers will be exempt from the higher general thresholds where their roles will appear in the Government’s Shortage Occupation List and/or where the role is deemed to be PhD level.
The burden of managing the current resident labour market test requirement – a compulsory step on the part of the employer to advertise its vacancy to assess whether a UK or settled worker can undertake the role before it is offered to a non-EU candidate – will be abolished. Exemptions to this test do exist now, but a wholesale removal of this time-intensive process will hopefully result in speedier recruitment processes.
A change of employer or role will require a new application. Existing sponsored workers will be protected and can continue to extend their stay in the UK.
For most routes, visa applicants will continue their need to demonstrate an English language requirement and that they do not fall foul of the criminality thresholds. Family members will be able to apply for dependant visas.
- A Highly skilled worker route will be introduced in time, but not on 1 January 2021. It is expected to be restricted and successful applicants will not require any form of sponsorship.
- A Health and Care Visa for those in eligible occupations offered by the NHS, the social care sector and NHS commissioned suppliers will be introduced, supported by reduced fees and fast-track processes. The minimum skill and salary levels set out above will apply.
- A new Global Talent Scheme will be available to highly skilled scientists and researchers, including those in engineering, humanities, the arts, and the digital sector. Tier 2 sponsorship will not be required but applicants will need to be endorsed by accredited bodies that are approved by the Home Office.
- A new non-extendable 2-year (for undergraduate or master’s) or 3-year (for PhD students) Graduate Route will be available to international students who have completed a UK degree from the summer 2021. It will bridge the gap between a student visa and a sponsored work visa enabling graduates an opportunity to identify work opportunities and exposure to the labour market without any employment sponsorship requirement. This will replace the existing Doctorate Extension Scheme.
- British Nationals (Overseas) citizens, resident in Hong Kong, including their immediate family members, will be permitted to live and work in the UK providing a pathway to citizenship. This arises from the UK’s concerns about the ongoing rights and freedoms of the people of Hong Kong.
The following schemes already in existence, will continue after 1 January 2021:
- The one-time non-extendable Youth Mobility Scheme will continue for a defined list of nationals aged between 18 and 30 who seek cultural exchange and work opportunities in the UK
- The Government Authorised Exchange route which provides temporary work opportunities, cultural exchange and international collaboration.
- Sector routes to accommodate elite sportspeople, faith-based roles, charity workers, and international students will continue. The existing provisions covering seasonal workers for agriculture, overseas domestic workers and those with UK ancestry will remain in place.
The UK will continue to rely on its visa provisions that are in place for non-EU visitors. From January 2021, EU citizens be permitted entry to the UK at the border for up to six months without having to obtain a visa beforehand, but they will not be allowed to undertake employment during this time.
A Sponsor Licence fee ranges from £536 to £1,476, depending on the size and type of the organisation. For certain categories of sponsored worker, the employer must continue to pay an Immigration Skills Surcharge per worker. The Surcharge, dependent on the size of the organisation, is a fund maintained by the Department of Education to address the skills gap in the workplace.
The individual worker and any family member dependant will need to pay a visa fee and an Immigration Health Surcharge, the latter being a cost that is paid towards the running of the NHS. The visa and IHS fees vary according to the length and type of visa.
Certain applicants entering the UK will be exempt from either Surcharge, depending on their visa route.
Immigration compliance will continue to be enforced by the Home Office, and specifically through audits undertaken prior to the assessment of a sponsor licence application (or its renewal) or at some point during its 4-year period of approval. Sponsor licence applications or licensees must comply with a series of recording and record-keeping duties, the failure of which can lead to a licence refusal, suspension, revocation, or downgrade. Each has a bearing on an employer’s ability to sponsor workers. EU and non-EU citizens who are entitled to work will be able to use an online service to demonstrate their right to work in the UK.
The Home Office proposals do not benefit all sectors, including those which have traditionally relied on EU workers for lower skilled roles matched by lower salaries. There is equally no immediate provision for the self-employed either and undoubtedly employers will need to allocate resource to the adapted system. More positively, the Home Office is committed to streamlining the visa process, which involves reducing the time it takes to obtain a visa. To benefit from these changes, we recommend employers take the following steps:
- Complete a staff audit to identify and, where possible, forecast any skills gaps and/or people requirements.
- Employers wishing to sponsor EU workers entering the UK after 1 January 2021 should apply for a sponsor licence now in readiness for the new system, including the prospect of graduate recruitment a year from now.
- Existing sponsors and/or new sponsors should ensure any European (plus any non-EU) sites that employ EU workers are registered with the Home Office to enable their transfer to a UK branch in line with the existing provisions.
- Employers who are employing EU workers before 31 December 2020 should encourage those individuals to register with the EU Settlement Scheme for pre-settled status (if they have resided in the UK for less than 5 years) for settled status (if they have resided for 5 years or more). There are provisions to upgrade from pre-settled status to settled status after reaching the residence requirement. Registration preserves ongoing rights to live and to work in the UK without the restrictions set out above. There is no application fee and the deadline for applications is 30 June 2021.
Newfields is a boutique law firm based in Cardiff, comprising specialist lawyers offering practical and cost-sensible immigration solutions. The firm is appointed by Welsh Government to deliver a national advisory service to support EU citizens and workers in Wales to register with the EU Settlement Scheme. We offer all organisations based in Wales, without cost, management and applicant training (virtually and in person), application clinics, and 1:1 applicant support on EU Settlement Scheme.