The new points-based immigration system designed to replace freedom of movement with the EU has already passed its second reading in Parliament. From 11pm on 31 December 2020 (just 4 months away) freedom of movement for EU nationals will come to an abrupt end. The impact is that the new immigration system will treat both EU and non-EU nationals equally. This will require HR to obtain a sponsor licence with the Home Office before the end of this year to permit for new hires to join the business from the EU or outside the EU.

Home Secretary Priti Patel said the new immigration system which comes into play from 1 January 2021 will be "firmer, fairer and simpler" and would "lay the foundation for a high-wage, high-skill, high-productivity economy".

HR will need to consider whether the typical vacancies arising at your business have traditionally been filled by EU nationals and whether in recent years the business has struggled to attract the right skills and talent from the local labour market. Consideration of obtaining a Sponsor Licence with the Home Office and securing a Tier 2 visa for new hires will be of critical importance now.

What are the changes ahead HR should consider?

  • There will be a mandatory requirement to obtain a Sponsor Licence with the Home Office to recruit any new hires from the EU or outside the EU from 1 January 2021 onwards.
  • The new immigration system will treat EU and non-EU nationals exactly the same requiring a Tier 2 employment visa.
  • The figure of £30,000 per annum for a Tier 2 (General) employment visa will be reduced to £25,600 per annum in order to boost the UK's public sector for "experienced hires".
  • Under the PBS system for skilled workers, applicants will be able to 'trade' characteristics such as their specific job offer and qualifications against a lower salary.
  • There will continue to be different arrangements for a small number of occupations where the salary threshold will be based on published pay scales.
  • A reduction in the skill level for Tier 2 visas from RQF level 6 to RQF level 3+ which will potentially open up the pathway to recruiting "lower skilled" workers more than ever before.
  • Suspension of the cap on the number of people who can come on the skilled worker route and removal of the resident labour market test.

How can HR and employers prepare for the inevitable introduction of the new immigration system from 1 January 2021?

  • It should be noted over 31,000 companies in the UK already hold a Sponsor Licence with the Home Office for hiring global talent.
  • Employers intending to recruit from outside of the UK to plug skills shortages should consider applying for a Sponsor Licence now if they don't already have one in order to avoid any delays. We have seen a huge surge and increase in enquiries from companies seeking assistance in recent months to prepare and apply for a Sponsor Licence with the Home Office.
  • It is important that those in the UK on the basis of current EU free movement principles secure their ability to remain by applying under the EU Settlement Scheme in order to avoid the new requirements from 1 January 2021. HR should communicate this across the business and consider providing the support required to these individuals.
  • Companies who currently hold a Sponsor Licence with the Home Office will automatically be granted an updated licence under the new system, with an expiry date consistent with their current licence held.
  • Employers can consider bringing forward the UK start date for EU nationals that they wish to hire in the future so that these EU nationals can arrive in the UK in 2020 and apply under the EU Settlement Scheme.

Concluding Remarks

Given the significance of the changes from 1 January 2021, we have witnessed an incredible rush of enquiries from businesses eager to secure a Sponsor Licence with the Home Office. Just this week we have received notification from the Home Office informing us to apply as early as possible to avoid disappointment before the end of this year with increased processing times for a Sponsor Licence already evident.

Organisations may also consider sourcing new talent from outside the EU for the first time with EU and non-EU nationals being treated the same under the new system. At Cleaver Fulton Rankin, we have plenty of experience in assisting a diverse range of businesses with either simple or complex corporate structures in obtaining a Sponsor Licence with the Home Office. Following the granting of a Sponsor Licence we also assist with the entire management and submission process of securing Tier 2 visas on behalf of our clients.

This article has been produced for general information purposes and further advice should be sought from a professional advisor. Please contact our  immigration team at Cleaver Fulton Rankin for further advice or information.

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.