On 19 February 2020 the Government published a policy paper announcing a new ‘point-based system’ for economic migration to the UK after Brexit, set to take effect from 1 January 2021.

With no future route announced for low-skilled or temporary workers, apart from seasonal workers and the youth mobility scheme, the focus of the new proposals is on skilled workers.

Skilled Workers

This new system will give a small amount of flexibility to sponsored work visas (currently what we know as Tier 2). It will require an applicant to gain a total of 70 points to be eligible to apply, with some characteristics tradeable and others not.

The three mandatory, non-tradeable requirements are those already required under the current Tier 2 system – a job offer from an approved employer sponsor, English language skills and a minimum skill level (although the skill level required will be reduced from level 6 (degree level) to level 3 (A-level). If an applicant meets these three requirements, they receive 50 points. However, the idea of ‘points’ here serves no real purpose, given that if the applicant does not meet these requirements, they will be unable to make up for this by gaining points for other attributes – rather, they will simply be ineligible to apply.

Where the flexibility, albeit minor, has been introduced is in the salary level required. While a minimum salary threshold will still exist, following the Migration Advisory Committee’s recommendation, the threshold will be reduced to £25,600 (it is currently set at £30,000). If a worker meets the three mandatory requirements and earns a salary of £25,600 or above, they will be awarded the required 70 points.

However, £25,600 will not be the absolute minimum. Instead, workers will still be able to meet the requirements for a visa while earning a lower salary if their job is on the shortage occupation list or if they are highly qualified.

People working in a job on the shortage occupation list or who have a PhD in science, technology, engineering or mathematics (STEM) will only need a minimum salary of £20,480. Being on this salary will not give the applicant any points, but if their job is on this list or they have a PhD in STEM, they will earn 20 points, allowing applicants on a lower salary to reach the required 70 points. Alternatively, someone who holds a PhD outside the STEM subjects, but the PhD is nevertheless ‘relevant to the job’, will be eligible to apply if they earn a salary of £23,040 or above. An applicant earning a salary between £23,040 and £25,599 will be awarded 10 points, which when combined with a relevant PhD providing another 10, will allow an applicant to meet the 70 points necessary to apply.

Despite these changes, this ‘point based system’ still closely resembles the system we currently have under Tier 2, and the three mandatory requirements prevent the flexible approach which is the trademark of other point systems, such as that found in Australia. Ultimately, you will still need a job to come to the UK, unless you are highly skilled and have been endorsed by the relevant and competent body (under what has now been dubbed the Global Talent route).

Other Changes

One of the most important changes, which is only briefly mentioned in the Government’s policy statement, is the removal of the resident labour market test. This test currently requires employers to advertise any job not on the shortage occupation list to ensure there are no suitable workers already living permanently in the UK. Combined with a suspension of the cap on the number of people who can come to the UK on the skilled worker route, these two changes will allow employers to offer as many jobs as they wish to applicants outside the UK, granted the person is able to meet the 70 points as explained above.

This is significant for employers, given that as of next year, both EEA citizens and non-EEA citizens will come under this new points-based system and employers will no longer be able to rely on the free movement of EEA workers. However, it also creates new challenges. While organisations currently have to be an approved sponsor to hire non-EEA citizens who do not have permission to work via another type of visa, from January 2021 anyone who wants to employ either EEA citizens or non-EEA citizens who are new to the UK will need a sponsorship licence.

Currently just over 32,000 organisations are registered as holding sponsor licences with the Home Office, and most of these are large companies. As the current process to become an approved sponsor is so complicated and expensive (see here for a full breakdown of fees), many SMEs take a decision not to register. However, in 2019, 1.4 million small and medium enterprises (SMEs) in the UK had employees, many of whom are likely to be employing Europeans and who will wish to continue to do so in the future. This means that in the near future, many more businesses will need to go through the process to become an approved sponsor.

While the policy paper states that the Government ‘recognise[s] that these proposals represent significant change for employers in the UK’, they fail to provide any further details on exactly how this will affect employers and what the costs will be. This is particularly concerning for the SMEs who currently rely on a European workforce and who will shortly find themselves required to participate in this new system.

More information on the licensing scheme is expected this autumn. In the meantime, if you require advice as either a worker, or a business wishing to become a sponsor, please contact us on contact@gryklaw.com or on +44 20 7401 6887.