Employing foreign workers update: the points-based system

Annabel Mace of Hammonds LLP continues a series of articles providing an update on employing foreign workers with a look at the points-based system. All non-European Economic Area (EEA) nationals wishing to work in the UK must qualify within one of the five tiers of the points-based system. 

Overview

A five-tier framework underpins the points-based immigration system, which was implemented in 2008. The tiers are:

• tier 1 - highly skilled individuals who contribute to the UK's growth and productivity;
• tier 2 - skilled workers with a job offer and certificate of sponsorship who fill specific gaps in the UK labour force;
• tier 3 - low skilled workers to fill specific temporary labour shortages (currently suspended and will be used only if specific shortages are identified that cannot be filled from the UK or EEA labour force);
• tier 4 - students; and
• tier 5 - youth mobility and temporary workers coming to the UK to satisfy primarily non-economic objectives.

The five tiers cover all available routes for those wishing to enter the UK to work or study. Each tier has different conditions, entitlements and entry clearance checks.

Tier 1

Tier 1 embraces four sub-categories:

• general (ie migrants who wish to find highly skilled employment in the UK);
• entrepreneurs;
• investors; and
• post-study workers (international students who have studied in the UK).

Individuals who apply under the highly skilled (general) sub-category must show that they have enough points to qualify to enter or remain in the UK. Points are earned against objective criteria including: qualifications, previous earnings, age and UK experience. Individuals must also satisfy mandatory criteria relating to English language ability and financial maintenance.

Tier 1 (general) - recent developments

From 6 April 2010, a bachelor's degree has been reintroduced as a means of claiming points for initial applications. Prior to 6 April, only a PhD or a master's degree was acceptable.

Also from 6 April 2010, migrants who have earned £150,000 or more in the qualifying period automatically qualify for entry under tier 1 (ie it is no longer necessary to earn points under the qualifications, age and UK experience criteria), subject to fulfilling the mandatory English language and financial maintenance criteria referred to above.

While these changes appeared to make the tier 1 (general) category more accessible to migrant workers, on 19 July 2010 a temporary limit on the number of applications from outside the UK that will be granted was introduced, of not more than 600 per month, until 31 March 2011. The temporary limit is being administered by the UK Border Agency (UKBA) on a monthly "first come, first served" basis so that, if an application meets all the requirements but the limit for that month has been reached, the application will be deferred to the following month when the limit allocation reopens. The limit will be reviewed at that time and may be removed, amended or made permanent.

The number of points required for initial tier 1 (general) applications increased (from 95 to 100) on 19 July 2010 as did the points awarded to those with previous earnings of £150,000 (from 75 to 80) and for an eligible MBA (from 75 to 80).

Further details of the tier 1 (general) application process and requirements can be found on the Highly skilled workers page of the UKBA website.

Tier 2

Tier 2 (unlike tier 1) requires migrants to be sponsored by a body licensed by the UKBA. It comprises four sub-categories:

• General - for people coming to the UK with a job offer to fill a gap that cannot be filled by a settled worker, including in shortage occupations (see below).
• Intra-company transfers - for employees of multinational companies who are being transferred by an overseas employer to a skilled job in a UK branch of the organisation.
• Sports people (elite sports people and coaches).
• Ministers of religion.

The specific criteria for justifying the sponsorship of a migrant worker under tier 2 vary depending on whether or not:

• the job is in a shortage occupation in the list of shortage occupations published from time to time by the Migration Advisory Committee (Government-approved shortage occupation list for tier 2 of the points-based system (PDF format, 138.6K) (on the UKBA website));
• the resident labour market test has been satisfied where the job to be filled is not a shortage occupation or an intra-company transfer;
• the job is an intra-company transfer; or
• the migrant worker is switching from the tier 1 post-study work category.

As with tier 1, individuals must also satisfy mandatory criteria relating to English language ability and financial maintenance. The sponsoring employer must follow the UKBA code of practice relevant to that occupation before assigning a certificate of sponsorship. The codes include minimum appropriate salary rates and the acceptable advertising media and methods for meeting the resident labour market test, if applicable. The minimum period of advertising required under the resident labour market test is now four weeks for all jobs. The codes can be accessed on the Codes of practice for sponsored skilled workers page of the UKBA website.

Tier 2 (general) and (ICT) - recent developments

The following changes took effect on 6 April 2010:

• Overseas employees transferring to the UK branch of an organisation under tier 2 (intra-company transfers - established staff) now need at least 12 months' (previously six months') company experience before they qualify to transfer to the UK.
• Two new intra-company transfer sub-categories were introduced to supplement the established staff sub-category - graduate trainee and skills transfer. The graduate trainee sub-category is intended to allow recent graduate recruits to transfer to a UK branch of an overseas employer for training. The maximum length of stay is 12 months. The graduates must be sent as part of a structured graduate training programme, with a clearly defined progression ladder towards a managerial or specialist role. The overseas company will also need to have employed them for at least three months. This sub-category cannot be used for long-term posts or to displace a resident worker. The skills transfer sub-category is intended to enable new overseas recruits to transfer temporarily to the UK to acquire or impart skills and knowledge relevant to their new role. The maximum length of stay is six months. The transfer should be incidental to the applicant's employment overseas and his or her main role/job should not be transferred to the UK. This category also cannot be used to displace a resident worker.
• Employers are no longer required to submit a change of employment application if a tier 2 migrant changes jobs, providing that he or she remains with the same sponsor and within the same standard occupational classification (SOC) code. (Each of the jobs covered by the UKBA codes of practice referred to above is linked to a SOC code. See Standard occupational classification 2000 (PDF format, 1.68M) (on the UK National Statistics website) for more information.)
• Leave to remain in the UK granted under tier 2 (intra-company transfers) on or after 6 April 2010 will no longer lead to settlement in the UK.

Further details of the tier 2 application process and requirements can be found on the Sponsored skilled workers page the UKBA website.

Tier 4 (students)

Student applicants under this tier must be sponsored by a college or university. There are two sub-categories in tier 4:

• adult or general students - for students coming to the UK for post-16 education; and
• child students.

Adult students are allowed to work during their stay, subject to the restrictions below.

Tier 4 (students) - recent developments

From 3 March 2010, adult students studying at foundation degree or degree level continue to be able to work up to 20 hours per week during term time (full time during vacations) but students studying below those levels are restricted to a maximum of 10 hours' work per week during term time (full time during vacations). From the same date, dependants of adult students studying below degree level no longer have permission to work at all, unless they qualify to do so in their own right in another immigration category.

Employers receiving work applications from tier 4 students (or where a current employee's current student visa expires and he or she obtains a new one) should ask the student to provide written proof from his or her sponsoring college or university of the course that he or she is studying, the level of qualification and the term dates. While some student visas may specify the number of hours that the student is permitted to work, seeking this information will avoid uncertainty about when a student can lawfully be allowed to work full or part time.

Further details of the tier 4 application process and requirements can be found in Tier 4 of the points-based system - sponsor guidance (PDF format, 611K) (on the UKBA website).

Tier 5

Tier 5 is divided into two categories:

• youth mobility; and
• temporary workers.

For further details of these sub-categories see Youth mobility scheme - tier 5 and Temporary workers - tier 5 in the Employing foreign nationals section of the XpertHR employment law manual. Since 6 April 2010, Monaco has participated in the youth mobility scheme, in addition to Australia, Canada, Japan and New Zealand.

Details of the application process and requirements for both sub-categories can be found in the Tier 5 (youth mobility scheme) of the points-based system - policy guidance (PDF format, 371K) and Tier 5 (temporary worker) of the points-based system - policy guidance (PDF format, 443K) (both on the UKBA website).

Annual permanent limit on migration

In June 2010, the UKBA launched a consultation on the introduction, from April 2011, of a permanent limit on the number of migrant workers admitted into the UK to live and work. The Migration Advisory Committee also consulted on the level of a possible limit. Both consultations closed in September 2010 and the Government and the Migration Advisory Committee are due to give their responses.

Next week's article will look at the rules on sponsorship and will be published on 15 November.

Annabel Mace (Annabel.Mace@hammonds.com) is senior associate solicitor and Head of Business Immigration at Hammonds LLP.

Further information on Hammonds Solicitors can be accessed at www.hammonds.com.