UK Immigration Reforms Now Underway

The managed migration reforms – arguably, the largest single overhaul of the UK’s immigration system since the Immigration Act 1971 – are upon us. Around 80 current routes of entry to the UK (including work permits) are set to be replaced by a five-tier system using objective, points-based criteria named the points-based system (PBS).

Individuals from outside the UK will now make their application under the PBS to a British diplomatic post in their home country as opposed to the Border and Immigration Agency (BIA) in the UK.

The roll-out of the PBS begun on 29 February 2008 and full implementation is expected by the end of the first quarter of 2009. Given that the changes are now taking place, it is essential that employers understand exactly what is being changed, and how these changes might affect businesses looking to recruit migrant workers.

TIER SYSTEM

Under the PBS, anyone wanting to come to the UK to work or study must qualify under one of five tiers.

Tier 1 covers highly skilled individuals that the BIA believes are best able to contribute to the UK’s growth and productivity. It will, amongst other schemes, replace the existing 'highly skilled migrant programme'. Under Tier 1, applicants will be awarded points based on factors that include academic qualifications, previous earnings and age. Those applying from within the UK from 29 February 2008 will need to apply under the PBS. This will be extended to include Indian nationals in April 2008 and the rest of the world from June 2008.

Tier 2 covers skilled workers who have an offer of employment from a UK company. It will, effectively, replace the current work permit scheme and is expected to go live during the third quarter of 2008 though, as of yet, no further details have been released. Under Tier 2, in addition to their offer of employment, individuals will need to gain points based on factors that include qualifications, prospective (as opposed to previous) salary and evidence that the company has been unable to source the position through the European labour market.

Tiers 3-5 are likely to be less relevant for businesses as they will cover low skilled workers, students and mobility/temporary workers respectively. Further details are expected throughout the course of the year.

ENGLISH LANGUAGE SKILLS

One of the key features of the PBS is that the BIA will require all migrants (with the exception of those in the Tier 1 'investor' category) to have minimum English language skills. As such, applicants will need to demonstrate their competence in the English language by passing an approved English language test, holding a Bachelors degree that was taught in English or being a resident of a 'majority English-speaking country' – these include Dominica and Jamaica but not India or South Africa. This could have significant consequences for employers in a number of sectors which have, historically, transferred staff from their Asia-Pacific and Russian operations and which did not previously – under the work permit regime – require language skills.

SPONSORSHIP

Under the PBS, any employer wishing to employ migrant workers who qualify under Tiers 2-5 will need to register with the BIA as a sponsor. Registration will involve providing the BIA with a variety of documentation including audited accounts and evidence of registration with HM Revenue and Customs. Once registered, businesses will be able to issue their own certificates to individuals that they wish to employ without having to first obtain BIA approval. Individuals will then use the certificate (an electronic reference number) to complete their visa application.

Sponsoring employers will be assessed by the BIA and given an 'A' or 'B' rating. Where an employer is given a 'B' rating, their ability to issue certificates will be restricted and the company will be given a time-limited action plan to address the BIA’s concerns. If the company does not comply it is likely to lose its sponsorship licence thereby preventing it from bringing non-EEA nationals into the UK until the BIA is satisfied that it is compliant. Employers’ ratings will be shown on a public register.

RESPONSIBILITIES AND PENALTIES

The trade off for employers being able to issue their own certificates is that they will be subject to greater responsibilities for managing migrant workers throughout their employment. Employers will be required to maintain various records including copies of passports, contact details and (when they are introduced) biometric ID cards; comply with their 'reporting duties', including keeping the BIA informed if migrants do not turn up for work and of any changes to their job or salary and comply with all immigration laws.

Companies will need to ensure that their human resources practices are in order as they can expect to receive audits from the BIA to ensure that they are meeting their obligations. Failure to do so could, again, result in the downgrading or the loss of their sponsorship licence.

Furthermore, as of 29 February 2008, new civil and criminal penalties will come into force, meaning companies that employ individuals without full permission to work in the UK will face fines of up to £10,000 for each unauthorised worker (the previous maximum was £5,000). Businesses which knowingly employ an individual without permission to work in the UK may be prosecuted for a criminal offence and, for the first time, potentially face an unlimited fine and/or imprisonment. It is therefore extremely important for companies to ensure their recruitment practices are compliant.

PREPARING FOR CHANGES

It remains to be seen whether the PBS will represent a substantial improvement to the current system which has, in many respects, served UK businesses well. Indeed, while the BIA’s intentions are admirable, only time will tell if existing concerns relating to the inflexibility of a rigid points-based system, the accessibility of caseworkers in British diplomatic posts overseas and the increased obligations on employers are justified.

What is clear is that businesses in the UK need to be prepared for the changes in order to avoid delays in hiring or transferring non-EEA staff and incurring penalties, the knock-on costs of which could have serious implications on their ability to employ migrant workers going forwards.