The New Points Based Immigration System : What does it mean for Businesses?
This year will see a major over-haul of the UK’s immigration system, described by Liam Byrne as the ‘biggest shake up of the immigration system in its history’ .
Our region has a long history of reliance upon migrant workers in sectors such as technology, agriculture and hospitality. Businesses reliant upon a migrant workforce, should consider planning ahead now for the changes, including ensuring that they have robust risk management policies in place.
The new Points Based System (PBS) is to be rolled out over the next couple of years, beginning with Highly Skilled Migrants (Tier 1). Its introduction will be coupled with the introduction of licences for employers planning to employ migrant workers.
The Tiers
Tier 1 - Highly Skilled Migrants including entrepreneurs, investors, highly skilled migrants wishing to come to the UK to further their careers and international graduates who have studied in the UK
Tier 2 - Skilled employees with a job offer
Tier 3 - Unskilled employees
Tier 4 - Students
Tier 5 - Temporary workers
Licences to employ migrant workers
Applications for a licence will be made to the Border & Immigration Agency (BIA). Licences are likely to become compulsory from Autumn 2008 and will last for four years. A licence will allow the employer to apply for a Certificate of Sponsorship for a particular employee. The employee will then apply for permission to enter or remain in the United Kingdom, and they will be required to meet the relevant points threshold. A licence will not be required to employ highly skilled migrants or EEA nationals.
Employers will be rated A or B depending on their level of compliance and the systems that they have in place. It will be a condition of the licence that employers report certain instances to the BIA, for example, where foreign employees do not turn up for work. Employers will be required to cooperate with the BIA, including allowing access to their premises on demand.
Sanctions for non compliance
Sanctions for employers found in breach will range from being given an action plan to comply with to having their licence revoked, as well as civil penalties of up to £10,000 for negligently employing an illegal worker. A new criminal offence is to be introduced, carrying a prison sentence of up to 2 years, and unlimited fine, for knowingly employing illegal workers.
Work permits
Broadly speaking, most Work Permits, including Intra Company Transfers, will be replaced by Tier 2 of the PBS. Licensed employers will provide Certificates of Sponsorship to skilled workers coming to the UK under Tier 2.
A Skilled worker is someone who is able to and intends to do a skilled job at NVQ level 3 or higher. In addition, either the job must be a shortage occupation, have a salary of £40,000+ or be an Intra Company Transfer, or the employer will need to show they can’t find a suitable employee from the resident labour market. For religious workers or sportspersons there are additional criteria to be met. The entry route for lower skilled workers would be Tier 3, although at present there are no plans to introduce this Tier.
How to plan for the changes?
- Ensure that current HR and risk management strategies comply with current Home Office Guidance on employing migrant workers and that all paperwork is in order and up to date. The BIA will undertake compliance spot checks which may or may not be pre-arranged. They are likely to check existing employee records and will also look at whether employers have systems in place to ensure absences are reported. If problems are identified this could affect the licence application or mean that the employer is given a B rating.
- Begin collecting the documentation that will be needed for the application. For example, for private limited companies this includes four documents to prove trading presence in the UK. This must include any filed Company accounts, as well as three other pieces of evidence such as employer’s liability insurance, VAT registration certificate, HMRC registration certificate, corporate bank statements and so on.
- Consider how many Certificates of Sponsorship the business is likely to need each year and the reasons why that number of migrant workers is likely to be needed. This information will be needed for the licence application.
- If the business has more than one branch or subsidiary then there will a choice as to whether to apply for one licence for the whole group or separately. The advantage of applying as a group is it will be cheaper and less cumbersome. The disadvantage is that non-compliance by one branch could affect the licence for the whole group.
- Register for our regular e mail updates about the new licence system by contacting LBoyes@fjg.co.uk
Written by Louise Boyes
January 2008