New points-based immigration system from 2021

The policy for a new immigration system from January 2021 has been published by the government. Our friends at Migrate UK have put together the briefing below.

The aim of the new policy is to reduce overall levels of migration and give top priority to those with the highest skills and the greatest talents: scientists, engineers, academics and other highly skilled workers.

What are the main points?

  • From 1 January 2021 free movement will end resulting in all EU and non-EU citizens entering the UK for this first time being treated equally.
  • For those that wish to enter the UK for work purposes the government is revising the current sponsor worker route and for those that do not have a job offer, expanding the ‘Global Talent’ route.
  • Other immigration routes that allow work such as Family Life (spouses, partners and children of settled persons) plus Representatives of Overseas Businesses and UK Ancestry remain open.

How will it affect those with an offer of employment?

  • All applicants, both EU and non-EU citizens will need to demonstrate that they have a job offer from an approved sponsor, that the job offer is at the required skill level, the applicant earns more than the minimum salary threshold and that they speak English.

Minimum salary

  • For work sponsorship, the Home Office has accepted the Migration Advisory Committee’s (MAC) recommendation on lowering the general salary threshold from £30,000 to £25,600.
  • Migrants will still need to be paid at least the ‘going rate’ for the vacancy they are filling. However, skilled workers will be able to trade characteristics such as their specific job offer and qualifications against a lower salary. As long as this is no less than £20,480, they may still come if they can demonstrate that they have a job offer in a specific shortage occupation or they have a PhD relevant to the job.
  • In effect, applicants will be able to trade characteristics such as their specific job offer and qualifications against a salary lower than the minimum salary or the ‘going rate’ in their field.
  • There will continue to be different arrangements for a small number of occupations where the salary threshold will be based on published pay scales. Requirements for new entrants will be 30% lower than the rate for experienced workers in any occupation and only base salary (not including allowances and contributions) will be used to determine whether the salary threshold is met. There will be no regional salary thresholds or different arrangements for different parts of the UK.

Skill level

  • The Home Office will implement the MAC’s recommendation to bring the skills threshold for suitable vacancies down from RQF6 to RQF3. If the current SOC codes are kept this could mean the introduction of over 140 new job codes to the sponsorship system.
  • The MAC will be commissioned to produce and regularly review a shortage occupation list covering all jobs for the skilled worker route. Allocating extra points for occupations that the MAC determines to be in shortage in the UK will provide immediate temporary relief for shortage areas, making it easier to recruit migrants.
  • However, the Home Office expect employers to take other measures to address shortages and the MAC will look at this when they review whether an occupation is still in shortage.

Are there any other changes to the sponsored worker route?

  • Yes, quite major ones:
  • The cap on the number of skilled workers being allowed to enter the UK will be suspended and the resident labour market test (proof of advertising the vacancy to settled workers) will be removed.

With lower skill levels, salary and no cap on numbers, how does the government intend to reduce immigration for work purposes?

  • The government will be monitoring the numbers of skilled workers obtaining sponsorship carefully. The associated fees are already high for the employers and workers and unfortunately we expect this to rise further.
  • With the new policy pointing towards a lowering of the required skill, no need for a Resident Labour Market Test and the scrapping of the quota, we expect there to be measures to dissuade employers from relying on sponsorship.
  • The MAC has twice commented that the Skills Charge (currently £364 or £1,000 per sponsored worker per year depending on the size of the organisation) needs to be kept under review and the NHS Surcharge is due to be increased from its current level of £400 per year per sponsored worker and each dependant to between £625 and £800.
  • In addition, being a points-based system, the value of points in a particular criterion can be changed by the government at any time to further limit numbers.

What about lower skilled workers?

  • There will be no new route for lower skilled workers.
  • The Home Office are asking employers to adapt, by using existing staff and dependants of migrant workers in other immigration categories who are permitted to work.
  • They are committed to expanding the pilot scheme for seasonal workers in agriculture which will be quadrupled in size to 10,000 places.
  • The Tier 5 youth mobility scheme which results in around 20,000 young people coming to the UK each year, can also be an alternative route for the lower skilled.

What about those without an offer of employment?

  • Aside from established work categories such as Innovator, UK Ancestry and Representatives of an Overseas Business, the Home Office will expand the freshly introduced Global Talent route to EU citizens.
  • This is a rebranded version of Tier 1 Exceptional Talent. Highly skilled workers will be able to enter the UK without a job offer if they are endorsed by a relevant and competent body.
  • This route to the UK is for talented and promising individuals in the fields of science, engineering, medicine, humanities, digital technology, arts and culture (including film and television, fashion design and architecture).
  • Applicants will be leaders in their field or have the potential to be, as determined by an endorsing body. This category may lead to settlement in the UK.

What should employers do now?

  • Employers who currently do not hold a sponsor license should consider applying for one if they think they will want to sponsor skilled migrants from the EU in the future.
  • We advise this is actioned prior to autumn 2020 as the process can take on average two to three months. The Home Office fee for a sponsor licence valid for four years is not particularly high at the moment - £536 for small organisations (which will make up the vast majority) or £1,476 for medium/ large organisations. The employer will then pay as they go for each sponsored employee.
  • Note that employers will need to protect their licence and meet Home Office compliance guidance. Holding a licence is seen as a privilege. Young or micro businesses with genuine vacancies should not be put off applying for a licence as the scheme is available to all UK organisations. We regularly see applications being approved for businesses under 6 months old.

Which sectors will be affected the most?

  • Those businesses who employ what the government designate ‘lower skill’ or ‘lower pay’ workers in sectors such as healthcare, hospitality, retail, manufacturing and construction will undoubtedly need to plan.
  • Some jobs within these sectors could qualify for sponsorship, e.g. senior health workers, health co-ordinators, restaurant and bar managers, bakers, builders and plumbers. The sticking point is the minimum salary required. These businesses could look at ‘new entrants’ with lower starting salary criteria to meet.
  • These include Tier 4 General students in the UK wishing to switch status and those under the age of 26. Alternatively, employers will need to be looking at other categories of the immigration rules.

What should EU citizens do?

  • Those in the UK now and prior to 11pm on 31 December 2020 will need to apply to remain under the EU Settlement Scheme or another immigration status as appropriate. The EU Settlement Scheme will remain open until 30 June 2021.
  • We highly recommend that those who only hold a national identity card apply for a passport.
  • National ID cards are to be phased out and at some point will not be accepted for entry to the UK or as proof of right to work. Some EU citizens are currently experiencing long waiting times to obtain passports, and this will only get worse. It is important to plan this as soon as you are able.

What happens next?

  • This new points-based system policy needs to be approved by parliament.
  • The Home Office will publish further details on the points-based system in due course. The rules themselves are also due for a general rewrite in line with The Law Commission recommendations on Simplification of the Immigration Rules, to which the government will be responding shortly.
  • This is part of a wider multi-year programme of change. A points-based system provides the government with the opportunity to move the goal posts when they see fit, often at short notice.
  • We also expect the job (SOC) codes to be revised as well as Shortage Occupational Skills.
  • The Home Office will continue to refine the system in the light of experience and will consider adding further flexibility into the system including additional attributes that can be ‘traded’ against a lower salary. This might, for example, include a greater range of qualification levels or other factors such as age or experience studying in the UK.
  • However, the Home Office need to guard against making the system too complex. It does sound as though a version of the Highly Skilled Migrant Programme or Tier 1 General could be resurrected for the third time, no doubt with much more restriction and objectiveness added.