Initial Thoughts on the UK's New Points-Based System
AN OVERVIEW WITH PRACTICAL RECOMMENDATIONS
This post has been updated following further announcements by the UK Government (read more here)
Background
Following Brexit and with a mandate from the electorate to reduce net migration, the Government has announced its new Points-Based System (PBS) which will take effect from 1 January 2021 (at the end of the post-Brexit transition period). Crucially, the new system will treat EU and non-EU citizens equally, thus ending free movement.
Here we summarise the main changes expected under the new PBS and provide practical pointers for UK employers who wish to ensure they are ready for the new immigration scheme.
Salary and Skills Threshold
The minimum salary threshold will be set at £25,600 - a reduction from the current level of £30,000 (although a migrant must still be paid the higher of the specific salary threshold for their occupation and the general salary threshold). However, under the new PBS applicants will be able to trade characteristics such as qualifications and specific job types for a lower salary, provided the salary does not fall below £20,480.
The expansion of the skills threshold means that those coming to live and work in the UK will now need to be qualified to A level or equivalent, as opposed to the higher degree level under the current system i.e. a reduction from RQF6 to RQF3.
The annual cap on the number of skilled workers will be removed (currently 20,700 – although this cap is rarely met).
The advertising process known as the Resident Labour Market Test will also be removed.
Skilled Workers
From 2021, all EU and non-EU citizens will need to achieve a total of 70 points to be eligible to apply for a work visa. Applicants must demonstrate that they have a job offer from an approved sponsor (20 points), the job is skilled to at least RQF3 (20 points), and they have proficiency in English language (10 points). The applicant can then make up the shortfall via ‘tradeable’ characteristics: proposed earnings, their qualifications or if the job is in a designated shortage occupation.
The idea of tradeable points will be implemented from January 2021 in the so called ‘first stage’ but the Government will consider adding tradeable attributes such as age or experience studying in the UK.
Highly Skilled Workers
The Global Talent Visa programme will be opened up to EU citizens to allow highly-skilled individuals to work in the UK without an offer of employment, provided they are endorsed by a relevant and competent body.
A broader unsponsored route will also be introduced with points awarded to a smaller number of the most highly-skilled workers for characteristics such as academic qualifications, age and relevant work experience. A cap will apply to this route and the Government will be consulting with key stakeholders to introduce this category in the ‘second phase’.
Additional Categories
The student visa route will continue to be based on points and will be opened up to EU citizens.
The Seasonal Workers pilot will be expanded from 2,500 to 10,000 in response to the specific temporary requirements in the agriculture sector.
Under the visit category, EU citizens will be considered non-visa nationals and therefore eligible to enter the UK for up to six months for limited purposes without the need to obtain a visa.
Processes and Other Points
Visa filing fees, the Immigration Health Surcharge and the Immigration Skills Charge will become payable for EU citizens who are sponsored under the new PBS.
The visa application process for EU citizens will be slightly different to the process for non-EU citizens. Most EU citizens will apply online and enrol facial biometrics using smartphone self-enrolment – fingerprints will not be required initially. Non-EU citizens will continue to provide biometrics at a Visa Application Centre, including fingerprints.
Most EU citizens will be issued with an electronic visa (e-visa), while non-EU citizens will continue to receive documents evidencing their status in the UK.
EU citizens living in the UK by 31 December 2020 will continue to be eligible to apply under the EU Settlement Scheme until 30 June 2021.
EU citizens will be permitted to use electronic passport gates at the border.
Commentary and Recommendations
As with most policy statements, there are some big ideas proposed by the Government but the devil will be in the detail. On initial glance, we of course welcome the reduction of the salary threshold and the removal of the Resident Labour Market Test and the annual cap on skilled workers.
Upon closer inspection, we are concerned that these changes stand to impact the bottom line for many companies across the UK – the cost of employing EU workers will be a huge concern for many businesses going forward. It is currently free to employ EU workers, however from January 2021 each EU worker will be subject to visa filing fees (currently starting at £610), the Immigration Health Surcharge (£400 per year) and the Immigration Skills Charge (up to £1,000 per year). These fees are rising, and employers must start to make budgetary allowances for the cost of employing EU workers from 2021 onwards.
In addition, any companies which do not already have a sponsor licence but anticipate continuing to employ EU workers after 1 January 2021 should pre-emptively apply for one to ensure their hiring needs can be correctly resourced with minimal disruption.
In unsettling news, the Government has confirmed that there will be no specific route for low-skilled workers. While they have abandoned a specific net migration target, this move is clearly aimed at meeting the Conservative Government’s decades-long promise of reducing net migration, since 70% of the existing EU workforce would not meet the new requirements. It remains to be seen whether the approximately eight million Britons currently out of work will fill the ‘low skilled’ roles currently filled by Europeans (but which will not be eligible for sponsorship under the new PBS). The Government has argued that the 3.2 million EU citizens who have applied under the EU Settlement Scheme will help to fill this labour shortage, and perhaps this will bring flexibility to an otherwise uncompromising system. Nevertheless, it is very likely that sectors like hospitality, healthcare, agriculture and construction will feel the burden of this policy shift.
While the idea that all workers should be held to the same standard regardless of their nationality may make sense in a post-Brexit world, it remains to be seen how this will affect the British economy in the long term. The Government recognises that these proposals bring about significant change for UK employers and are eager to engage so please do contact us with your thoughts and experiences and we can share these with Government.
While change is certainly afoot, your Eversage team is here to help you plan and prepare your company in advance of 1 January 2021. Please get in touch to discuss further!