UK: Changes To UK Immigration Rules

Last Updated: 12 May 2011
Article by Joanne Hennessy

Heavily debated changes to the immigration rules applicable to non-European Economic Area ("EEA") migrants in the UK are due to come into force on 6 April 2011.

The Points Based System ("the PBS") applies to non-EEA migrants who wish to work in the UK. The PBS comprises five tiers, each of which is divided into further specific categories. In July 2010, the Government implemented interim limits on the number of migrants entering the UK under Tier 1 and Tier 2 of the PBS. Tier 1 General was then closed to overseas applicants on 23 December 2010.

The latest changes are aimed at further limiting the number of non-EEA migrants entering the UK each year and ensuring that those entering the UK have the appropriate skill set. These changes will have a marked effect on the recruitment of non-EEA workers by UK employers.

This briefing summarises the changes to Tier 1 and Tier 2 of the PBS which are due to come into force on 6 April. First though, a reminder of how the PBS works at the moment.

The PBS Today

Tier 1 and Tier 2 of the PBS are currently the most commonly used routes for non-EEA migrants to enter the UK for work.

Tier 1 comprises four categories: General, Entrepreneur, Investor and Post-Study Work. Tier 1 is used by highly skilled workers coming to the UK looking for work or self-employment opportunities. Under this Tier, immigration permission attaches to the individual, as opposed to his/her employer, leaving the individual free to work for the employer of his/her choice or on a self-employed basis. This tier is typically used for high earning individuals.

Tier 2 is for people coming to the UK with a skilled job offer to fill a gap in the workforce that cannot be filled by a resident worker. Tier 2 comprises four categories: General, Intra- Company Transfer, Ministers of Religion and Sportsperson. The two categories most commonly used under Tier 2 are "General" and "Intra-Company Transfer".

Unlike Tier 1, sponsorship is essential under Tier 2. An employer must hold a sponsorship licence to be able to sponsor a migrant worker. A licensed employer will currently be given an annual allocation of Certificates of Sponsorship that it can assign to migrants it wishes to employ.

Tier 1 Changes

Tier 1 is being refocused to provide a route for migrants who the Government considers have real value to offer to the UK. The changes include:

  1. Tier 1 General will close to new applicants from 6 April 2011. However, this category will remain open for individuals already in the UK with a Tier 1 General visa, to enable them to extend their leave.
  2. Tier 1 Investor and Entrepreneur categories will be changed to make them more attractive to prospective applicants. Changes include accelerated eligibility for settlement in the UK and greater flexibility regarding periods spend outside the UK.
  3. A new Tier 1 Exceptional Talent category will be introduced for exceptionally talented individuals in the fields of arts, science and humanities who wish to work in the UK. Migrants seeking entry under this category will not need sponsorship by an employer but will need to be endorsed by a designated competent body that is an expert within these fields. There will be a limit of 1,000 visas for 2011/12.

Effect of Change

Tier 1 will no longer be available to the majority of migrants.

Recommended Action

If you have employees currently on a visa under Tier 1 you should:

  • check when their visas are due to expire;
  • consider whether they will be able to extend their visa or transfer to another category when it expires; and
  • if your employee(s) need to switch to Tier 2, consider your eligibility to apply for a Sponsorship Licence and their eligibility for a visa under Tier 2.

Tier 2 Changes

Tier 2 General

Tier 2 General is also being tightened with a view to ensuring that only migrants with the appropriate level of skills enter the UK. The changes include:

  1. The number of Certificates of Sponsorship available for migrants will be capped at 20,700 for the year 6 April 2011 to 5 April 2012. There will be a limit of 4,200 for April 2011 and a limit of 1,500 each month thereafter. If the limit is oversubscribed, applications will be assessed according to a ranking system; with scientists, academics and researchers being afforded an additional premium.
  2. This route will be reserved for graduate level occupations only (according to a new graduate occupation list). This does not mean that the person employed to fill the job must be educated to graduate level, it means that the work that person will do is pitched at graduate level.
  3. The minimum English language requirement will be raised from basic to intermediate level (B1 on the common European framework of reference).
  4. Employers will no longer have an annual allocation of Certificates of Sponsorship to allocate. Going forward, for most roles, employers will have to request "restricted" Certificates as and when they are required for specific roles.

The monthly limits on Certificates of Sponsorship apply to "restricted" Certificates only. Unrestricted Certificates will be available for:

  • Tier 2 Intra-Company Transfers;
  • Extensions to Tier 2 General visas granted before 6 April 2011;
  • Tier 2 General visa holders moving to a new employer;
  • Migrants switching to a new immigration category;
  • Migrants earning over £150,000 per annum.

Effect of Change

The limits on "restricted" Certificates of Sponsorship" will make it harder for employers to recruit non-EEA migrants going forward, with far fewer certificates being granted per month.

The graduate occupation requirement will mean fewer non-EEA migrants will be eligible to enter the UK under Tier 2 General.

Recommended Action

If you employ, or expect to employ, non-EEA nationals you should:

  • check when the visas of existing employees are due to expire and consider their eligibility to extend their visas and/or switch to another category;
  • consider whether the resident labour market can satisfy your recruitment requirements;
  • review your job specifications and recruitment practices in light of the new limits and the graduate occupation requirement; and
  • consider your "restricted" and "unrestricted" Certificate requirements for the coming months.

Tier 2 (Intra-Company Transfer)

Intra-company transfers will not be affected by the restricted Certificate of Sponsorship route. However, this route has not escaped the Government's review entirely as it will be tightened to focus on specialists and managers. The changes include:

  1. As with Tier 2 General, the job will have to be at graduate level.
  2. The "Established Staff" sub-category is being split into two new sub-categories: Short Term Staff and Long Term Staff. These sub-categories will be subject to minimum salary thresholds.
  3. The duration of leave granted will be intrinsically linked to the migrant's salary. A migrant paid more than £40,000 will be granted leave for up to three years with the possibility of extending for a further two. A migrant paid between £24,000 and £40,000 will only be granted leave for up to 12 months.
  4. There will be a 12-month cooling off period at the end of the migrant's stay to prevent migrants being perpetually sent to the UK for 12 month periods.
  5. As with Tier 2 General, new and existing migrants must receive their salary payments into their own personal bank accounts (in the UK or overseas).

Effect of Change

The graduate occupation requirement will mean fewer non-EEA migrants will be eligible to enter the UK under Tier 2 Intra-Company Transfer.

Recommended Action

If you employ, or expect to employ, non-EEA nationals under the Intra-Company Transfer route you should:

  • ensure that they meet the graduate occupation requirement;
  • consider the period during which they will be required in the UK in light of the relevant salary thresholds when finalising their UK terms and conditions of employment; and
  • notify your payroll team that all payments must be made to direct to your employees' personal bank accounts.

Further Proposals

In the last week the Home Secretary has announced proposals to dramatically change the immigration rules regarding students, including those relating to their ability to work in the UK. Students make up the majority of non-EU migrants in the UK under the PBS. The proposals are said to be aimed at reducing the number of foreign graduates staying on in the UK in unskilled jobs.

Currently, students can obtain a "Post-Study Work" visa, allowing them to remain in the UK for two years to work/seek employment after their course ends. Such individuals do not need to be sponsored by their employer to work during that two-year period.

The Home Secretary's proposals include:

  • abolishing the Post Study Work visa from April 2012; and
  • introducing a minimum salary threshold of £20,000 for post study migrants.

If implemented, the proposals will mean that students will only be able to work in the UK at the end of their studies if they have an offer of a skilled job from a sponsored employer. It is not yet clear whether such sponsorship would come under the existing Tier 2 of the PBS or whether a new route will be created for such individuals. The Home Secretary has also indicated that the capacity of students to work during their studies will be reduced, with only students at universities and publicly funded further education colleges being able to work during their studies.

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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