Further details of post-Brexit immigration rules have been announced

In our earlier article we set out the government’s proposed plans for the post-Brexit immigration system.

The Home Office has finally published the eagerly awaited Statement of Changes to the Immigration Rules. We now have more detail and this is broadly in line with earlier policy statements. We have set out below the important changes and practical points for employers to be aware of.

Implementation

Most of the new rules will come into force on 1 December 2020. In particular the Tier 2 (General) route will be replaced by the Skilled Worker route. Tier 2 (ICT) will become the Intra-Company Transfer route. Minor changes in other categories come into force on 31 December 2020.

Skilled Worker route

• Employers will need a sponsor licence in order to be able sponsor employees under this route and employers will be able to sponsor both European and non-European nationals. In many cases, if an employer wishes to hire a European national who first comes to the UK on or after 1 January 2021 they will need to sponsor that individual under the Skilled Worker route. This is because free movement for European nationals is due to end at 11pm on 31 December 2020. Please see this article for further details about the impact of the end of free movement. 
• The minimum skill threshold for roles eligible for sponsorship will be lowered from RQF level 6 (degree level or equivalent) to RQF level 3 (A Level or equivalent). From 1 December 2020 far more roles will therefore be eligible for sponsorship.
• In many cases there is currently a requirement for the employer to advertise the vacant role to the resident population and employers may only sponsor a non-EEA national if no one suitable from the UK population applies. It is a very prescriptive process with onerous requirements. To the relief of employers and immigration lawyers alike, this Resident Labour Market Test will be abolished. However, sponsors should be able to demonstrate that the migrant they want to sponsor has the required skills, qualifications and experience in addition to there being a genuine need for the UK role. We are also waiting for guidance to be published as to whether any evidence of the recruitment process will be needed.
• Individuals applying under the Skilled Worker category will need to meet English language requirements, usually by evidencing that they have a degree which was taught in English or by taking a prescribed English language test. There have been some helpful additions to the ways in which individuals will be able to meet the English language requirement. GCSE, A Level or Scottish Highers in English will also now be accepted. Importantly, the English language requirements will apply to European nationals as well.
• The current annual Tier 2 cap on the number of skilled workers able to enter the UK will be suspended. There will be no limit on the number of migrants who can enter the UK under the Skilled Worker category. The government has said that they may review this in the future.
• Individuals who hold more than 10% of shares in the sponsor organisation or another group company will now be eligible for the Skilled Worker category. 
• Under the current regime, individuals must generally earn at least £30,000 per year to qualify. Under the new system, this general threshold will fall to £25,600 per year although in some cases there will be a higher minimum salary threshold for certain jobs. There will also be some potential "trade-offs" against this minimum salary threshold – for example, if the role is on the official shortage occupation list or the individual holds a PhD in a STEM subject relevant to the role, the salary threshold for that individual could be as low as £20,480 per year instead.
• Guaranteed annual allowances or benefits can no longer be taken into account when calculating the minimum salary for someone applying under the Skilled Worker category. This means that only guaranteed basic gross salary will count towards the minimum salary requirements. Transitional arrangements have been put in place for Tier 2 (General) migrants applying for further leave before 1 December 2026 who would not be able to meet the salary threshold based on basic gross salary alone in future applications.
• The 12-month “cooling off period” and six-year maximum length of stay in the route will no longer apply. It will also be easier to switch into this Skilled Worker category from inside the UK.
• The minimum £35,800 salary requirement for Indefinite Leave to Remain (ILR) applications is being removed and replaced with a minimum salary of £25,600 or the "going rate" for the occupation.

Intra-Company transfer routes

• Employers will require a sponsor licence and will be able to sponsor European and non-European nationals under this route.
• Time spent in this category will not lead to ILR. However, individuals with existing Tier 2 (ICT) leave to remain and future ICT visa holders will be able to apply to switch into the Skilled Worker route from inside the UK. This will provide these employees with a path to obtain ILR after five years’ continuous residence in the UK.
• The cooling-off period for ICT migrants has been revised. This will allow individuals to stay in the UK for a maximum of five years within any six year rolling period or nine years within any ten year rolling period if they are a high earner which should give employers and individuals greater flexibility.
• The high earner threshold been lowered to £73,900 per annum from £120,000 per annum. Those earning at least £73,900 per annum will be able to spend up to nine years in the UK in any 10 year period and they will also be exempt from the need to have been working for a group company outside the UK for 12 months to be eligible to apply.
• The minimum salary threshold will remain as £41,500 per annum. However, only guaranteed basic salary and very limited allowances may be taken into account. Allowances may only be taken into account if they are also paid to resident workers. This means that ex-pat allowances for cost of living and housing allowances will not count towards meeting the minimum salary threshold. 
• ICT migrants will not be required to meet the English language requirements.

Other key changes

• Tier 5 (Youth Mobility) visa holders will be able to switch into the Skilled Worker route from inside the UK and they will not have to leave to submit their application from abroad.
• Dependant visa holders will also now be able to switch from within the UK into the Skilled Worker visa and they will not have to leave to apply from overseas.

Comment

Many employers who currently sponsor employees will no doubt welcome the relaxing of the rules to some extent under the post-Brexit immigration system. This should ease some of the administrative burden linked to the UK visa system.

However, going forward, once free movement ends, businesses will increasingly have to use the sponsorship system to employ European nationals and will therefore need to consider the significant costs associated with sponsoring individuals to work in the UK, especially where they also have dependants.

Practical points for employers

• European nationals will only be eligible under the new routes from 1 January 2021 once freedom of movement has ended. In the meantime, before the transition period ends on 31 December 2020, if the company has European nationals it wants to hire in early 2021, it should explore whether the individual can move to the UK before 31 December 2020. This would bring them within the EU Settlement Scheme and bypass the sponsorship regime and costs associated with this.
• Employers should consider whether they are currently sponsoring any staff under Tier 2 (ICT) who they may wish to employ permanently in the UK. If so, from 1 December 2020 applications can be submitted from inside the UK for these individuals to switch into the Skilled Worker category. Applications to switch should potentially be made as soon as possible under the new rules so that employees can start accruing the time towards the five years’ continuous residence required for eligibility for ILR. Time already spent under Tier 2 (ICT) will not count towards the five years.
• Businesses that already have a sponsorship licence do not have to apply for a new one. They will be able to continue using their existing one under the new regime. Employers who need to sponsor European or non-European nationals from 1 January 2020 who do not already have a licence should apply for one as soon as possible.