UK: Immigration - A Practical Guide For Employers

Last Updated: 1 January 2011


Recent changes to the United Kingdom's immigration rules have made it much more difficult to employ non-European workers in the UK.

A new "points-based system" was introduced in 2008 to help reduce the number of migrants entering the UK to work. In 2010, the Government announced plans to further restrict immigration by imposing an annual limit on the number of non-European migrants entering the UK, which will apply from April 2011. Interim restrictions were put in place in July 2010 and, in December 2010, the main immigration route for highly skilled professionals was closed to overseas applicants.

The current points-based system requires employers to have a "sponsorship licence" to employ most workers from outside the European Economic Area (EEA) to work in the UK. Employers who become licensed sponsors also accept a range of duties in relation to managing immigration. In practice, much of the responsibility for assessing who is eligible to work in the UK has been passed from the UK Border Agency (UKBA) onto employers, with serious consequences for those who get it wrong. In parallel with the points-based system, a new penalty regime applies to employers who employ illegal workers.

This guide provides an overview of the points-based immigration system, the main features of the sponsorship licensing system and the key changes in the pipeline for employers. It also provides practical guidance on the employer's duty to prevent illegal working and the penalties which apply.

This guide is based on the law, and guidance issued by the UKBA, as at January 2011.

Who is covered by the points-based system?

The points-based system applies to nationals from countries outside the European Economic Area (EEA) who want to apply to work in the UK. Nationals from the EEA and Switzerland are able to work in the UK (although there are additional restrictions and requirements for some countries – see page 11). A list of EEA countries appears at Appendix 1 to this guide.

How does the points-based system work?

The system consists of five "Tiers" or categories. Applicants who wish to work in the UK need to score a specified number of points under one of the five Tiers in order to qualify. Applicants in Tiers 2-5 also need a certificate of sponsorship from an approved sponsor. For Tier 2, the employer needs to be the sponsor.

The five Tiers, and the dates on which they came into force, are set out in the box:

This guide covers Tiers 1, 2 and 5. Tiers 3 and 4 will not be relevant to most employers. Tier 3 has been suspended, based on the Government's view that low-skilled labour shortages can be filled by workers from within the EEA. Tier 4 applies to educational institutions wishing to sponsor foreign students to undertake a course of study in the UK.

How did the points-based system change what went before?

In some ways, the points-based system was a consolidation of the previous immigration system, so that many people who qualified under the old rules would also qualify under the points-based system. However, there are a couple of notable exceptions.

In relation to Tier 2, the sponsorship rules (see page 12) mean that it is the employer, rather than the UKBA, who is responsible for deciding whether an individual qualifies. In the past, borderline cases could be referred to the UKBA. However, employers now need to be much more cautious about who qualifies under Tier 2, as getting it wrong could mean the employer loses the right to sponsor migrant workers and/or faces criminal sanctions for hiring an illegal worker.

In addition, a mandatory requirement that applicants speak some English and show that they have sufficient funds to maintain themselves in the UK means that some individuals who would have qualified under the old rules will not qualify under the points-based system.

Finally, some old immigration categories relating to internships, work experience and training have been abolished, making it much harder for individuals in these situations to qualify.

What further changes are planned?

The key changes from April 2011 are:

  • Tier 1 – General highly skilled workers will be closed to all applicants (this route closed to overseas applicants on 23 December 2010)
  • Tier 1 – General highly skilled workers will be replaced with a new Tier 1 – Exceptional Talent category which will be limited to 1,000 scientists, academics and artists per year
  • for registered immigration sponsors, Tier 2 – General will be restricted to graduate level jobs and will be limited to 20,700 applications per year (between now and April 2011, there is an interim limit of 10,832 on Tier 2 – General applications).

The closure of Tier 1 – General is very significant for employers, particularly those with a highly skilled workforce, as it is the main route for highly skilled professionals. This places more emphasis on Tier 2, which requires employers to have a sponsorship licence, and either demonstrate there are no suitably qualified European candidates for the role or transfer an existing employee from an office abroad (see pages 6-8). In practice, the annual limit also means that not all individuals who would otherwise qualify under Tier 2 will receive a visa once the monthly quota or limit has been reached.

In addition to these changes, the Government is also considering putting an end to the right for foreign students to work in the UK for up to two years following completion of a degree in the UK. The Government is consulting about this proposal until the end of January 2011.


What are the Tiers?

Tier 1 Individuals who enter the UK under Tier 1 have open access to the job market. Unlike Tier 2 (see below), they do not need a sponsor or a job offer.

Tier 1 is subdivided into four categories – General, Post-study Worker, Investor and Entrepreneur.

Tier 1 – General

Tier 1 – General has traditionally been the category used most often in practice for highly skilled professionals. It allows the individual to work for any employer of their choice or to take selfemployed work. However, since 23 December 2010, Tier 1 – General is only available to individuals who are already in the UK in some other immigration category and on 5 April 2011, Tier 1 – General will close to all applicants. It will then be replaced with a new Tier 1 – Exceptional Talent category, which will be limited to 1,000 scientists, academics and artists per year.

Currently, to be accepted under Tier 1 – General, the individual must satisfy the following requirements:

  • be in the UK under an immigration category that allows them to switch into Tier 1 – General (eg a student visa, Tier 2 or an old system work permit)
  • have competent English language skills (ie by being a national of an English-speaking country, holding a degree which was taught in English, or passing an appropriate English language test)
  • hold savings of at least £800 which do not fall below this, even for one day, in the three months immediately before applying and
  • score at least 80 points under the points-based system (based on age, qualifications, previous earnings and experience in the UK).

The available points will vary depending on the individual's circumstances. By way of example, an individual with a Bachelor's Degree (or foreign equivalent), who is under 40 and has earnings equivalent to at least £75,000 in the previous year, would score 80 points. An individual who has earned £150,000 or more in the previous year would automatically score 80 points. The points awarded for each of these attributes vary from time to time. A summary of the points assessment is available on the UKBA website, along with an online self-assessment indicator at:

Tier 1 – Other categories

Tier 1 also covers the following categories:

  • post-study workers – which allows international students who have completed a recognised qualification in the UK to work for 2 years after completing their studies
  • investors – which allows high net worth individuals to come to the UK to make a substantial financial investment (at least £1 million) in the UK and
  • entrepreneurs – which allows individuals to come to the UK to set up or take over, and be actively involved in the running of, a business or businesses.

The Government is considering closing Tier 1 – Post-study Workers and is consulting over the proposal and its timing until 31 January 2011. By contrast, the Government plans to retain the investor and entrepreneur categories and make these more "user-friendly" to encourage investment in the UK. Investors and entrepreneurs will not be subject to any annual limits on numbers.

Further details about these categories can be found on the UKBA website at: /

Tier 2

Tier 2 has replaced the old work permit system. However, employers must have a sponsorship licence from the UKBA in order to use Tier 2 (see page 12).

Instead of applying for work permits, employers must now issue "certificates of sponsorship". Somewhat misleadingly named, a certificate of sponsorship is not an actual certificate but is a unique reference number which the sponsor issues to the individual. A certificate of sponsorship enables the individual to enter the UK to work for the employer (provided they meet the other criteria under Tier 2). Employers are responsible for deciding whether or not an individual meets the relevant requirements for a certificate of sponsorship to be issued.

Tier 2 is subdivided into two categories – General and Intra-company Transfers.

From April 2011, there will be an annual limit of 20,700 Tier 2 – General permits that can be issued. The annual limit will operate on a monthly basis and, in months where the limit is oversubscribed, only applicants with the most points will qualify. Until then, an interim limit of 10,832 Tier 2 – General permits has been in place since 23 December 2010. There are no limits on the number of Tier 2 – Intra-company Transfers that can be permitted and these will remain outside the annual limit from April 2011.

Tier 2 - General

In order to enter the UK under Tier 2 – General, an individual must:

  • have a job offer and sponsorship certificate from an employer that is a licensed sponsor
  • have basic English language skills (ie by being a national of an English-speaking country, holding a degree which was taught in English, or passing an appropriate English language test)
  • hold savings of at least £800 (plus £533 for each dependant coming to the UK) which do not fall below this, even for one day, in the three months immediately before applying (or a letter from the UK employer undertaking to maintain and accommodate the individual for the first month of employment, provided the employer is an A-rated licensed sponsor – see page 14)
  • have the offer of a skilled role in the UK (NVQ level 3 or above or, from April 2011, at least graduate level), with a salary of at least £20,000 which is appropriate for the role (as set out in a sector-specific code of practice – see below) and
  • score at least 50 points (based on qualifications and prospective earnings, with automatic points awarded for holding a certificate of sponsorship).

The points awarded for each of these attributes vary from time to time. A summary of the points assessment for Tier 2 – General applications is available on the UKBA website at: /

The available points will vary depending on the individual's circumstances. By way of example, an individual with sponsorship, a UK Bachelor's degree (or foreign equivalent) and prospective earnings of £20,000 will score 50 points.

The employer may only issue a certificate of sponsorship under Tier 2 – General if:

  • the individual satisfies the tests above and
  • either there are no suitably qualified or experienced workers from the EEA available to fill the vacancy (known as the "resident labour market test") or the role is on the "shortage occupation list".

To read this document in its entirety please click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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