In March 2006 the UK Government announced its proposals for the introduction of a new points based system designed to manage migration into the for the purposes of work or study.
In its Command Paper, “A Points Based System: Making Migration Work for Britain” the Home Office confirmed that the new system, consisting of 5 Tiers, would replace the 80+ existing routes to come to the UK to work and study and would provide us with a more transparent, simplified system. Under the tiered system, individuals are required to satisfy a points requirement in order to be granted leave to enter or remain in the UK. Points are awarded in accordance with the applicant’s abilities, qualifications and age and vary according to the particular Tier under which the individual is applying.
The 5 Tiers are as follows:
- Tier 1 Highly skilled workers, investors and entrepreneurs
- Tier 2 Sponsored skilled workers
- Tier 3 Low skilled workers filling specific temporary labour shortages
- Tier 4 Students
- Tier 5 Youth Mobility Scheme and Temporary workers e.g. musicians performing in concert
Tiers 1 and 5
Over the past 14 months the various Tiers have been rolled out in the UK starting on 29th February 2008 with Tier 1 for highly skilled workers. Tier 1 (General) of the points based system effectively replaced the Highly Skilled Migrant Programme as a route for individuals of high economic worth to come to the UK. Individuals are not required to have a job offer in the UK under Tier 1 (General) and will consequently have unlimited access to the labour market. Accordingly it is not necessary for employers to “sponsor” individuals under Tier 1.
Tier 1 (General) has recently been the subject of a significant revision which saw the minimum academic qualification required to obtain points under the scheme increased from a Bachelor’s to a Master’s degree. Minimum earnings were also increased to £20,000. It is important to note that such changes will not affect those individuals already in the UK under either the HSMP or Tier 1 (General) who wish to extend their stay but the rule changes will affect those making initial applications under the scheme.
Tier 5 of the points based system was introduced on 27th November 2008 and relates to temporary workers and youth mobility. It replaces a number of categories including, to a limited extent, the Training and Work Experience Scheme (TWES) which previously fell under the work permit arrangements and the working holidaymaker scheme.
Tier 2 – Sponsorship for Employers
On 27th November 2008 the work permit arrangements were closed and effectively replaced by Tier 2 of the points based system. Under Tier 2 all UK employers wishing to sponsor a migrant worker are now required to obtain a licence from the UK Border Agency (UKBA) enabling them to do so. Licence applications are filed online with the UKBA and must be accompanied by the appropriate fee. Fees range from £300 to £1,000, depending upon the size of the company and the number of Tiers to be covered by the licence. Employers applying for a sponsor licence must also submit a number of company documents (e.g., Annual Report and VAT Registration) to confirm their legitimacy.
Duties and Responsibilities
Sponsorship goes far beyond the acquisition of a licence. As sponsors, employers will be assessed in terms of their recordkeeping, reporting and compliance and may be subject to a pre- or post-licensing visit from a representative of the UKBA, who will look to establish whether or not the appropriate HR systems are in place to enable the employer to comply with its duties as a sponsor. Many organisations are consequently required to undertake a complete reassessment of their HR systems in order to implement processes which can cope with the monitoring and reporting obligations that sponsorship brings. This can prove to be a time-consuming and expensive exercise, particularly for large employers who have hundreds of employees throughout the UK.
The Sponsor Management System
All employers, once issued with an A or B rated sponsor licence, will be closely monitored by the UKBA via the Sponsor Management System (SMS). The SMS is a portal through which employers can issue Certificates of Sponsorship (CoS) to migrant workers and advise the UKBA of any changes to migrant activity. The system has been engineered so as to redistribute the responsibility for managed migration beyond the UKBA and on to employers. Whereas once decisions on who should be issued a work permit were made by a bank of qualified individuals at the UKBA, the onus is now on employers to assess whether the migrant they wish to sponsor meets the requirements of the scheme. Failure to make an accurate assessment could result in the company having its licence down-graded or, in extreme circumstances, removed altogether which could obviously have serious economic consequences for the business. Furthermore, the introduction of a civil penalty and the creation of additional criminal offences under amendments to the Immigration, Asylum and Nationality Act 2006 have put even greater pressure on employers to ensure that they are fully conversant and compliant with the legislation relating to illegal working.
Existing Migrant Workers
Sponsor licensing applies equally to companies who currently employ migrants on work permits. If an employer wishes to extend the leave of a migrant on a work permit, it will be required to do so under Tier 2 and so will need a licence. However, sponsorship is not a requirement for employing Tier 1 (General) migrants, EEA or Swiss nationals (including the Accession States) or others who are free to work in the UK i.e. dependants of points based system migrants.
Applying for a CoS under Tier 2
There are four categories of CoS under Tier 2, namely:
- Tier 2 (General) for new hire situations
- Tier 2 (Intra Company Transfer) (“ICT”)
- Tier 2 (Sportsperson)
- Tier 2 (Ministers of Religion)
Most employers will wish to make applications under the Tier 2 (General) and (ICT) categories. Under Tier 2 (General) employers will be required to undertake a Resident Labour Market Test (RLMT) to ensure that there is no suitably qualified settled worker available to fill the vacancy. Suitable advertising mediums are set out within the UKBA’s Codes of Practice. Under Tier 2 (ICT), migrants must have worked for the overseas company for a period of 6 months or more in order to qualify.
In all cases the job must be at S/NVQ Level 3 or above, which can again be confirmed by consulting the relevant Code of Practice. The salary must also be at a level commensurate with the type of role on offer. Once the CoS has been assigned, the migrant will be required to make an application for entry clearance at the relevant British mission overseas. Or, if they are eligible to make an in-country application, they will need to apply to the UKBA for leave to remain in line with their CoS. They will at this point need to demonstrate that they can meet the points requirement of the scheme through their CoS, qualifications and prospective earnings.
Additional Requirements
Under Tier 2, migrants are now required to establish that they are proficient in English (level A1 Council of Europe’s Common European Framework of Reference). Migrants from a majority English-speaking country will meet the English language requirement. Also, applicants under Tier 2 (ICT) are automatically given 10 points for English language. Otherwise they will need to demonstrate that they have a degree qualification which was taught in English, or that they have passed one of the UKBA-approved English language tests at the required level.
Furthermore, migrants must satisfy a new maintenance requirement, for which they will need to demonstrate that they have a sufficient level of funds to maintain and accommodate themselves and any dependants throughout the first month of their new employment. The full level of cash funds must be held in an account for a period of 3 months prior to the date their application is filed. Alternatively, A-rated sponsors may issue a letter certifying the maintenance of a migrant worker and his/her dependants for the first month of employment. The maintenance requirement is currently set at £800 for the principal applicant and £533 for each dependant.
Changes to Tier 2
In response to the current economic climate, recent changes have been made to Tier 2 (General) to ensure that companies give the resident labour force ample opportunity to apply for available positions. On 22nd February 2009 the Home Secretary Jacqui Smith announced that as of 31st March 2009, all jobs must be advertised for up to 2 weeks in Jobcentre Plus before a skilled migrant can be offered the position - a requirement which coincided with increasing public demand for British jobs for British workers. The Jobcentre Plus requirement is in addition to the advertising requirements set out in the Tier 2 Codes of Practice.
The Home Secretary has also asked the independent Migration Advisory Committee (MAC) to report on whether there is an economic case to restrict Tier 2 to shortage occupations only. The UKBA shortage occupation list comprises a narrow range of occupations for which there is a long-term skills shortage in the UK. This restriction would mean that companies would no longer be able to employ migrant workers under Tier 2 unless the position on offer was listed on the UKBA’s shortage occupation list. Over the next month or two employers will be encouraged to submit evidence to MAC as to why Tier 2 should not be restricted in this way, with reference to the potential business consequences this may have for them.
This article first appeared in the May 2009 edition of Finance Director magazine.
