Explaining the Points-Based UK Immigration System

This system provides flexible arrangements for UK employers to recruit skilled workers from around the world through a number of different immigration routes.

The UK’s previous immigration scheme required a resident labour market test be carried out on businesses recruiting and sponsoring skilled workers. Whilst the resident labour market test has been abolished, the Skilled Worker and Home Office guidance now details the evidence of recruitment requirements that HR staff and recruiters are expected to follow when sponsoring employees on skilled worker visas.

Skilled Worker Visa – requirements

For a Skilled Worker Visa there must be:

  • a certificate of sponsorship for the applicant from an employer (Home Office approved);
  • a sufficiently skilled job;
  • a job meeting the minimum salary requirement —depending on the type of work; and
  • the applicant must satisfy the English language requirement.

A potential hire, meeting the above requirements, independently financial and able to cover the costs of sponsorship is unlikely to encounter barriers to recruitment and is likely to be able to find a role.

Businesses, however, still encounter challenges.

Removal of the Resident Labour Market Test

Businesses wanting to sponsor a skilled worker (under the previous Tier 2 (General) visa) previously had to carry out a resident labour market test (RLMT).  The test was prescriptive and added at least 28 days to the recruitment process. Businesses were required to ensure any vacancy advertised could not be carried out by a UK citizen/settled worker and added to the overall cost  of the hire. If a UK citizen or settled worker had the skills and requirements listed in the job advert, the business could not offer it to the individual requiring sponsorship — even if the stronger candidate.

Whilst the abolition of the resident labour market test, which occurred on 1 January 2021, was great news for businesses – employees can now be brought on board without the long initial delay adding value sooner, there are still administrative and operational challenges which employers need to watch out for (particularly with costs for recruiting from within EU (rather than relying on the free movement of workers)) and particularly in the field of discrimination. It is always useful to have a recap on this.

Potential risks

With the points-based system in place and the removal of the resident labour market test, applicants must not be rejected on the basis of their immigration status.

Stating that only those with the right to work in the UK will be recruited and/or offered employment may lead to race discrimination claims on the grounds of nationality. To avoid this, we would recommend the following steps to avoid potential race discrimination claims:

 Planning and Strategy

  • What level of recruitment as a business is being aimed for this year and where are these vacancies within your business – understand where your vacancies could be mapped on the immigration points-based system:
  • Is the skilled occupation list an option – does the role you require fall into this list?
  • Does the salary offered match the going rate for the role?

Carrying out this exercise will help you prepare and manage your recruitment process. If the role or salary requirements do not meet the immigration points required, then that would be the basis of any rejection — rather than the individual’s immigration status.

Internal Processes and Training

  • Make sure everyone is aware that the resident labour market test no longer applies and that applicants should not be rejected based on their immigration status.
  • Do not state in any job vacancy or advertisement that you do not have a sponsorship licence.
  • Consider applying for a sponsor licence if you are likely to be recruiting a skilled worker — it is currently taking around 8 weeks for the licence to be processed.  This prevents a delay later.
  • Don’t introduce a recruitment policy confirming you only accept applications subject to immigration status and/or from those who do not require sponsorship.
  • Avoid decisions being made based on costs only (further details below).

What if you do not want to be a sponsor?

In a nutshell, if you operate in any way that could place any nationality at a disadvantage, for example, not wanting to incur the costs of sponsoring a worker, or not wanting a sponsor licence, you will have to justify that decision by:

  • being clear on what your legitimate aim is — i.e. what is your real business need; and
  • ensuring that how you achieve that aim is proportionate — i.e. it is reasonably necessary in order to achieve that aim?

Is the cost of sponsorship the only reason for not offering a role to a potential candidate? If so, then you are not going to be able to successfully defend a race discrimination claim. Rather than saying that “it’s too expensive to sponsor a worker”  explore other considerations – to do that you need to know what they are.

For example, it may be that in relation to the administrative, compliance and/or general obligations that go with sponsorship, you just don’t have the resources or expertise to manage that confidently.

The courts recognise and understand that most business decisions have regard to costs, so something cost-driven but not solely cost-based is capable of justification. If not purely cost-based, you do have to be clear on grounds you rely on for not offering the role and be able to demonstrate that your cost-driven approach is proportionate. 

Do you have a genuine vacancy? 

Though there is no longer a requirement to carry out a resident labour market test, you must still have a genuine vacancy – any role advertised must be genuine, meet the relevant skills threshold and salary requirement.   

The best starting point to determine whether an applicant meets the required skills threshold is to consider the vacant role on the Government’s skilled occupation list. The role must not be fake, a sham or created so that an applicant can apply for a visa.

If a vacancy is not capable of being plotted under a relevant job code on the skilled occupation list, there may be a temptation to try and “fit” it under a different job code on the list. If you can genuinely consider, and demonstrate, that the role matches the relevant job code on the list, that should be fine. However, any attempt to make an application for a role that does not fulfil the relevant skill threshold, then you will likely encounter problems with your skilled worker visa/sponsorship application such as:

  • the application being rejected;
  • the application being accepted in error but later investigated, subject to a compliance visit and/or the application being rejected at a later date;
  • the Home Office could consider your application misleading, which could result in:
    • a fine
    • a downgrading of the sponsor licence
    • being on under more scrutiny  i.e. on the Home Office radar re all future applications.

You will need to ensure that you understand the requirements of the vacant role and how that may or may not correspond with the relevant job code on the skilled occupation list. 

Summary

The removal of the resident labour market test gives considerations that need to be factored into the business recruitment and decision-making process, posing real issues for the business which cannot be ignored.

We have seen many changes recently in the world of business immigration law and no doubt will continue to do so, therefore it is essential to ensure you and/or your recruitment team are up to date on the new visas, the points-based system and are clear how to avoid potential discriminatory practices.

If you find you and/or your team isn’t quite as up to speed as you thought, then equality and diversity training and/or training around the visa points-based system may be helpful and we will always be happy to assist.

What is the Skilled Worker Sponsor Licence?

As one of several routes designed to allow UK employers to recruit talent from overseas, it is the main route to long-term employment.  Once granted a licence, the organisation is permitted to recruit and sponsor potentially any number of non-UK nationals under the route.

Before applying for the licence, the business must be able to show that:

  • It is a legally operating UK organisation;
  • There is a genuine need for a Skilled Worker Sponsor Licence; and
  • The organisation understands fully its duties and responsibilities as a sponsor with the  appropriate HR systems and processes in place.

The organisation must show a real need for a Sponsor Licence by submitting either evidence that there is a genuine vacancy, a potential suitable candidate requiring sponsorship, or evidence of the organisation’s likely future need to recruit individuals to jobs that meet the Skilled Worker criteria.

Under the scheme, sponsorship will be possible as long as the job that they will be doing is sufficiently skilled to Regulated Qualifications Framework (RQF) Level 3 and they are paid a sufficient salary, at least £10.10 per hour, and £20,480 annually (but dependent upon the type of job being carried out).

In addition, the applicant must be able to show that they have a certain level of proficiency in the English Language.

If you are interested in finding out more about the Skilled Worker Sponsor licence, click here to speak to Partner Emma Peacock.

What is the High Potential Individual Visa?

Launched on 30 May 2022, the new High Potential Individual (“HPI”) visa route is one of several other routes of entry opened this year.

Recent graduates of top overseas universities who want to work or look for work in the UK following completion of their degree are encouraged to utilise this visa. It is designed to attract the “brightest and the best” to the UK.

Applicants must have successfully passed a bachelor’s degree or above from a recognised leading university in the last five years. (Separate lists exist for each of the last 5 academic years, enabling applicants to determine whether their university qualified at the time they graduated).

Employers do not need to sponsor the candidate under this route; the individual must make their own visa application which will include supporting themselves financially and the usual English Language requirement.

Successful applicants will be able to come to the UK for two years (with a bachelor’s degree) or three years (with a PhD) and work in any role. Unfortunately, this route cannot be extended and does not lead to settlement, although it may be possible to switch into another visa route, prior to expiry of the term.

If you are interested in finding out more about the High Potential Individual visa, click here to speak to Partner Emma Peacock.

To read other articles in this series, click on the links below: 

Understanding the new Scale Up visa.

What is the Global Business Mobility Visa.

 

Understanding the new Scale-Up Visa

A new Scale-Up Visa route will open to applications on 22 August 2022. A new route to entry, this is aimed at individuals with talent, a high level of qualification and skill.

For employers who are registered sponsors and experiencing rapid growth (needing to “scale up”), this route is designed to make the process of sponsoring visas quicker and easier.

Sponsored Scale-up visa applicants must have a valid Certificate of Sponsorship from an A-rated Scale-up sponsor have the specialist skills required to continued growth of the Scale-Up business and authorised by the Home Office to sponsor the job in question under the Scale-up route.

To qualify as a Scale-up, a sponsor will need to show:

  • annualised growth in either turnover or staffing of at least 20% for the previous three-year period and
  • a minimum of 10 employees at the start of the period.

Much of the flexibility of this new route is that unlike other immigration routes, a sponsoring employer need only confirm that an applicant is expected to work for them for at least the first six months of their visa.

The job for which the applicant is sponsored must be (amongst other things):

  • a minimum skill level of RQF Level 6 (graduate level) (on a list published by the Home Office of jobs with their occupation codes and salary ‘going rates; and
  • a salary threshold of at least £33,000 per annum (higher than a Skilled Worker’s £25,600), the ‘going-rate’ for the sponsored job and at least £10.58 per hour; and
  • applicants must meet an English language and finance requirement.

Under this flexible immigration route, a second stage exists during which Scale-up Workers no longer require sponsorship. If applying after two years under the Scale-up visa, a worker would need to show that they had sufficient PAYE earnings for at least 12 months during those initial two years, in addition to a Scale-up Worker’s English language and finance requirements which at this stage are likely to be met automatically.

Provided these criteria are met, the visa application process would then be fast-tracked by the Home Office.

This is a route which could lead to settlement after five years, and applicants could bring dependent family-members. However, the individual would only need to be sponsored for the first six months, meaning that a sponsored employee would have more freedom to leave the employer and work elsewhere.

Employers utilising this route may therefore wish to consider other retention mechanisms, such as bonuses, restrictive covenants or repayment of visa fees on leaving.

If you are interested in finding out more about the new Scale-Up visa, click here to speak to Solicitor and Partner, Emma Peacock.

Read the second article in the series, Global Business Mobility visa by clicking here.

And the third, here: What is the High Potential Individual visa?

An immigration reminder

Although this legislation was brought in on 1 February 2016, landlords need to be reminded that they must check the immigration status of their tenants or licencees.

Landlords must check under the Immigration Act (sections 20-37 and Schedule 3) the status of prospective tenants and other authorised occupiers before a residential tenancy is entered into, “right to rent” checks.

Landlords must also make sure that someone’s right to occupy the residential premises does not lapse due to a change in their immigration status (i.e. they have a “time-limited” right to rent), which is an even more onerous obligation. In that situation, the check must be made both within 28 days of the tenancy being entered into and before the time-limited right to rent expires or once 12 months has passed, whichever is later. Failure to comply with the legislation could lead to a civil penalty of up to £3,000. There are exclusions including certain student accommodation and long leases (where a right of occupation for a term of seven years or more is granted).

A person may not occupy residential property in the UK if they are not a “relevant national” which is a British citizen, a national of an EEA state or Switzerland or they do not have a “right to rent” in relation to the property –i.e. if they require leave to enter or remain in the UK and do not have it, or they have leave, but it is subject to conditions that prevent them from occupying the residential premises.

The legislation also applies where a residential tenancy grants a right for other individuals to occupy along with the named tenant, i.e. family members who are disqualified as a result of their immigration status. However, in that situation, there is a contravention only if reasonable enquiries were not made of the tenant before entering into the tenancy as to the relevant occupiers, or reasonable enquiries were so made and it was, or should have been, apparent from the enquiries that the adult in the question was likely to be a relevant occupier.

The Act applies not only to the landlord who entered into the residential tenancy, but also potentially to the person who is the landlord under the tenancy at the time of the contravention i.e. the successive owner. So where a landlord transfers its interest subject to a residential tenancy, the new landlord will become the ‘responsible landlord’ for any contraventions of the requirements. If the tenant has the right to rent at the time the residential tenancy was granted by the original landlord, but subsequently lost that right and follow-up checks were not conducted, it will be the landlord at the time the breach is identified who will be the ‘responsible landlord’ for the purpose of a penalty. The new landlord must therefore confirm with the old landlord that the document checks have been undertaken and retain evidence to demonstrate this. The new landlord must also take careful note of whether and when follow-up checks must be undertaken in order to maintain a statutory excuse. Enquiries must be made on the purchase of a residential property subject to tenants.

Landlords must exercise vigilance on this issue before residential tenancies are entered into, but should also carry out follow-up checks where the occupier has a time-limited right to rent.

To find out more, please contact Caroline Vernon

Emma Peacock

Her clients range from senior executives to large multinationals and are based around the UK.

She has guided many employers and employees through the Employment Tribunal process and Employment Appeal Tribunal process with considerations and strategies for settlement.

She also has practical experience in handling the employment aspects of corporate transactions on reorganisations. When it is necessary, she works closely with the Sherrards Corporate and Commercial team, together they assess business risks and liability to achieve the best outcome.

Emma also advises on business immigration law. This involves advising on the most appropriate route of entry into the UK for the senior staff of an overseas business looking to either set up or expand their UK/European operations and also dealing with (or co-ordinating) the application process for the relocation of senior staff or individuals and their families into the UK. Emma finds that this often goes hand in hand with advising on the employment law requirements and implications of setting up a UK office or business.

Never one for sitting on the fence, she is known for her commercial and pragmatic advice, working closely with clients to achieve their strategic goals and the legal results they need.

That’s it – no fuss, just facts.

Melissa Vangeen

She is a dual USA and UK national and can speak conversation German and French, which is valued by her international clients.

She also has a very significant American related practice and travels to the States several times a year, regularly visiting the East Coast, West Coast and the Mid-West.

Melissa is an expert in her field, evidenced by her memberships in the Law Society, the Immigration Law Practitioners Association, the American Bar Association and is a member of UKCEN (UK Citizenship for European Nationals) which is affiliated with the Joint Council for the Welfare of Immigrants (JCWI). Through this, she sits on their legal advisory board, providing their 40,000 members with immigration legal support.

Enough about Melissa, now over to you.

Global Mobility

Immigration