UK: Essentials For Employers - The Points Based Immigration System

Last Updated: 16 September 2008
Article by Elaine McIlroy

The UK immigration system is being radically reformed by the introduction of a new five tier 'Australian style' points based system. The phased introduction of the system started in February 2008. In this bulletin we look at the main areas employers need to consider for each Tier (except for Tier Four which is for students coming to the UK to study rather than to work).

Very broadly, the five Tiers are as follows:

  • Tier One – for highly skilled workers who do not need a job offer to apply.

  • Tier Two – for skilled workers with a job offer, or for individuals being transferred to work in the UK from an overseas group company (Intra Company Transfers). This tier will replace the work permit scheme from November 2008.

  • Tier Three – for low skilled workers filling specific temporary shortages. However, this tier is currently suspended.

  • Tier Four – for students.

  • Tier Five – for youth mobility and temporary workers, for example, working holiday makers or certain sports persons or musicians.

The most important Tiers for UK employers bringing talent into the UK to work, are Tiers One and Two (and in limited cases, certain employers may sponsor Tier Five employees). Even if employers do not specifically want to target talent from overseas, they need to be familiar with Tiers One and Five. Almost every workforce will comprise migrant employees and job applicants who may be working in the UK under the new system. Employers must be aware of the restrictions that apply to their employees' permission to work so they can comply with their obligations to carry out document checks to establish their permission to work in the UK.

This bulletin covers:

  • The timescales for when each Tier comes into force;

  • The aim of each Tier and the rules that apply to it; and

  • Key considerations for employers.

OUT WITH THE OLD AND IN WITH THE NEW - WHEN DOES EACH TIER COME INTO FORCE?

The new points based immigration system is already partly in force. The timeline below sets out when aspects of the five Tier Points system opened or will open, and when they will close/ have closed.

TIMELINE

Date

Opened / Will Open

Closed/ Will Close

February 2008

The Sponsor Register opened for Tier One (General) and Tier Two (Intra Company Transfers).

 

February 2008

Tier One (General) opened

 

April 2008

Tier One (General) opened for highly skilled applicants located in India.

 

29 June 2008

 

The following schemes closed:

30 June 2008

The following categories opened:

  • Tier One – (General) for highly skilled applicants in the rest of the world

  • Tier One (Investors)

  • Tier One (Entrepreneurs)

  • Tier One (Post Study Work)
 

28 July 2008

The Sponsor Register opened for Tier Two (General) for Skilled Workers with a Job Offer and Tier Five.

 

November 2008

The following Tiers will open:

  • Tier Two (General) for Skilled Workers with a Job Offer

  • Tier Two (Intra Company Transfers)

  • Tier Two (Sports People)

  • Tier Two (Ministers of Religion)

  • Tier Five (Youth Mobility and Temporary Workers).
 

November 2008

 

The following immigration categories will close when Tier Five opens:

  • Au pair scheme

  • BUNAC scheme

  • Gap year entrants scheme

  • Japan: Youth Exchange

  • Research assistants to MPs

  • Working holiday maker scheme

The following immigration category will close when Tier Two opens:

  • The Work Permit Scheme

No timescale for implementation known

  • Tier Three

This is for a limited number of low skilled workers needed to fill temporary labour shortages. It is currently suspended because the government considers that there is no shortage of such workers.

 

THE DETAIL OF EACH TIER

TIER ONE - HIGHLY SKILLED WORKERS

Tier One is aimed at enabling highly skilled people to come to the UK to look for employment or self employment opportunities. Individuals do not need an offer of employment to apply. Employers do not act as sponsors for Tier One applicants and do not therefore have the same obligations as they do in respect of Tier Two employees (see our bulletin from June 2008 for further information regarding an employer's sponsorship duties http://www.dundas-wilson.com/publications/dw_cms_4533.asp). However, employers must ensure that they carry out the required document checks for any such employees before they start work and on an annual basis.

Tier One (General)

For the Tier One (General) category for highly skilled workers, points are awarded based on qualifications, previous earnings, UK experience, age, English language skills and available maintenance (funds). This replaces and is similar to the former Highly Skilled Migrant Programme. Individuals will be granted permission to work for up to three years. They can apply for an extension at the end of that period.

Tier One (Post Study)

The post-study worker category is aimed at retaining international graduates who have studied in the United Kingdom. It replaces other graduate schemes. Post-study workers are free to look for work without having a sponsor for the length of their leave for a period of up to two years. Employees are expected to switch into another tier of the points-based system as soon as they are able to. Time spent under this category does not count for permanent residence applications.

Individuals score points for attributes which include a United Kingdom qualification, study at a United Kingdom institution, immigration status during United Kingdom study and/or research, the date of award of the qualification, English language ability and for available maintenance (funds).

Tier One (Investors)

The investor category is designed to allow high net worth individuals to make a substantial financial investment in the United Kingdom. Individuals are awarded points based on their ability to invest £1,000,000 in the United Kingdom. Initial applicants will have permission to stay and work for up to three years although an extension application can be made at that stage.

Tier One (Entrepreneurs)

The entrepreneur category is aimed at attracting those investing in the United Kingdom by setting up or taking over, and being actively involved in the running of one or more businesses in the UK. Applicants must score a certain number of points for their attributes, for English language ability and for available maintenance (funds). Initial applicants will have permission to stay and work for up to three years although an extension application can be made at that stage.

TIER TWO – FOR SKILLED WORKERS WITH A JOB OFFER

Tier Two (General) for Skilled Workers with a Job Offer and Tier Two (Intra Company Transfers)

The skilled migrant tier (Tier Two) is aimed at enabling UK employers to recruit individuals from outside the European Economic Area (EEA) to fill a skilled job that cannot be filled by an EEA worker. Employers will be required to act as sponsors. This means that they will have significant responsibilities in respect of the employee concerned. Initial applicants will have permission to stay and work for up to three years although an extension application can be made at that stage for a period of a further two years (whereas under the work permit scheme, employers could apply for permission to work for five years).

Employers will be able to sponsor skilled migrants in three cases:

  1. For certain shortage occupations (as identified and designated in a list that is compiled by a government committee called the Migration Advisory Committee (MAC)).

    This list will contain skilled occupations where there are shortages that cannot be filled by EEA nationals. The migrant's application need not establish his/her academic qualifications or a level of prospective earnings for this type of Tier Two application.

  2. For jobs which have passed the Resident Labour Market Test (RLMT). The employer will have to demonstrate that it has advertised the job and was unable to fill it with an EEA national.

    The employer must have advertised the job for a minimum of 2 weeks in JobCentre Plus or advertised as agreed in a sector specific Code of Practice (which has yet to be produced). If the prospective earnings from the job are in excess of £40,000 the job must only be advertised for a minimum of one week. The job must be advertised at or above the 'appropriate' salary or remuneration for that type of job.

    The only exception which does not require RLMT to be met is when highly capable international graduates who have been working in their UK job for at least 6 months apply. They are able to switch from Tier One into Tier Two.

  3. Intra Company Transfers, where the employee already works for a multinational company overseas and is transferred to work in the UK.

    For Intra Company Transfers no RLMT is necessary. The person must have been working overseas for the sponsoring company for at least 6 months and must earn salary or remuneration in the UK which is commensurate for that job.

Facts about Tier Two:

  • Employers will only be able to bring in migrant workers if the employer has a sponsorship licence and the employer has issued the migrant with a Certificate of Sponsorship (COS).

  • A migrant worker will need prior entry clearance which they will not be able to apply for without a COS.

  • All migrants will need a biometric identity card.

  • A job must be at NVQ3 level or above to be considered for Tier Two to ensure that it is 'skilled'. The UK Border Agency will publish a list of occupations which are at or above NVQ level 3.

  • To successfully apply under Tier Two the migrant must show that he/she has enough points to qualify. The migrant must obtain an overall point score of 70 points:

Type of application

Points Awarded

COS for a Shortage Occupation

50 points

COS for a job offer that passes the RLMT or Intra Company Transfer

30 points

Prospective earnings exceed £24,000

20 points (more limited points are available for lesser earnings)

Qualifications (employees can only score a maximum of 15 points)

NVQ level 3

Bachelors/Masters

PHD

 

5 points

10 points

15 points

Maintenance Requirements

10 mandatory points to pass this. The individual must have £800 (plus a sum for each dependant) for the period before they are paid their first salary.

English language ability

10 mandatory points to pass this.

Migrants with a COS for shortage occupation posts or jobs that have passed the RLMT will need to demonstrate English to a 'basic user standard'.

If the migrant is applying by reason of an Intra Company Transfer the English language requirement only needs to be met if they wish to stay beyond three years.

Tier Two (Sports People)

The sports people category allows individuals to play or coach. They must be internationally established at the highest level to qualify. Points are awarded for attributes, English language ability and maintenance.

Tier Two (Ministers of Religion)

The Ministers of Religion category is for those who wish to perform certain religious duties in the UK. Points are also awarded for English language and maintenance.

TIER FIVE – YOUTH MOBILITY AND TEMPORARY WORKERS

Tier Five is aimed at enabling young people to come and experience life in the UK for up to 2 years. Individuals can carry out any work except for business and professional sport, or to work as a doctor in training.

The various categories of Tier Five include:

  • Tier Five (Creative and sporting workers) – up to 1 year

  • Tier Five (Charity workers) – up to 1 year but no paid work is allowed

  • Tier Five (Religious workers) – up to 2 years

  • Tier Five (Government authorised exchange category) – up to 2 years (although no licence applications are currently being accepted)

  • Tier Five (International agreement category) up to 2 years

  • Tier Five (Youth mobility scheme) – up to 2 years

Tier Five (Youth Mobility)

This category applies to individuals who come from a list of participating countries. They must be sponsored by their national government. It replaces the working holiday maker scheme. Employees will be aged 18-30 and must have funds to support themselves in most cases. They cannot have dependent children and are expected to leave the UK when the permission ends. It is a temporary immigration category for a period of up to 2 years.

KEY CONSIDERATIONS FOR EMPLOYERS

  • All forms of permission to work under Tier One, Tier Two and Tier Five are limited in time. Employers must carry out the document checks to establish permission to work in the UK on an annual basis as well as the usual checks before the individual starts work. Systems should be put in place to ensure these are carried out. A failure to comply with document checks could lead to a breach of illegal working laws if it transpires that the employee did not have permission to work (both criminal and civil penalties apply – see our Alert from December 2007 for details ( http://www.dundas-wilson.com/publications/dw_cms_4532.asp).

  • Employers who are employing employees under certain Tiers will not have an obligation to, for example, report absences from work if they are not acting as sponsors. However, if an employer becomes aware that an employee's permission to work has ended, it cannot continue to employ the individual (but should follow certain dismissal procedures before dismissing).

  • Time limits on permission to work should be borne in mind in recruitment exercises. Employers should consider the risk of race discrimination claims if overseas nationals who are job applicants are not offered jobs because they have permission to work for only a limited period. Employers may have to objectively justify such decisions.

  • Employers looking to recruit talent from overseas should consider each of these Tiers as potential avenues to employing overseas workers.

  • Employers who will need to recruit employees under Tier Two (Skilled Workers and Intra Company transfers) from November 2008 should apply for a licence now in order to avoid delays. The UKBA has indicated that licence applications must be made by 1 October 2008 if employers want to be able to recruit employees under Tier Two as soon as the new system opens.

  • Employers should appoint a senior, responsible, honest and competent permanent employee to be an Authorising Officer if they want to act as a sponsor. The Authorising Officer is responsible for the activities of anyone issuing a COS in that organisation. That person should be adequately trained so that they know what the employer's sponsorship duties are, and the consequences of getting it wrong.

The recent changes to the immigration system have placed a heavier burden on employers. This is evident by the requirement that employers be licensed as a sponsor for certain categories of employee and also by the increased onus on employers in terms of their sponsorship obligations. In addition, the new document checking procedures and harsher penalties (with increased enforcement in respect of breaches) that apply to employers who employ illegal workers has created a climate whereby employers must be fully aware of the changes and their impact.

It should be noted that certain aspects of the new system may be subject to change prior to their implementation.

Graham Paul, Partner - graham.paul@dundas-wilson.com - 020 7759 9916
David Walker, Partner - david.walker@dundas-wilson.com - 0141 304 6039
Elaine McIlroy, Senior Associate - elaine.mcilroy@dundas-wilson.com - 020 7759 3511
Gordon Barr - Solicitor - gordon.barr@dundas-wilson.com - 0141 304 6280

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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