Immigration changes spell big changes for employers

Author
Rohan Roy
Senior Policy Analyst | Business West
3rd March 2020

On the 19th February the government published a policy statement outlining its plans for immigration after the transition period. The changes are broadly in line with what policy experts and businesses have been expecting. Nonetheless, when implemented these policies will be the biggest change to UK immigration policy since 1992, when the Maastricht Treaty introduced the concept of a common European citizenship. In the simplest of terms the policies outlined represent a slight liberalisation of immigration rules for non-EU citizens and a significant restriction on immigration from the EU.

The politics of immigration - like the politics of Brexit - are fraught, heated and emotional. In pursuit of avoiding these contentions, this article focuses on the dispassionate: what the changes are, how this will affect employers and what they can do to prepare in the intervening 10 months. 

The employer-led points based system 

‘Freedom of Movement’ (FoM) will end, to be replaced by an immigration system that treats EU citizens and those from the rest of the world equally. There will be no ‘low skilled’ route for workers to replace the ending of freedom of movement, even via a temporary visa. However, the skills threshold for ‘skilled workers’ will be reduced from a bachelor’s degree to A levels.

Concurrently, the cap on the number of people who can come on the skilled worker route will be removed, as will the resident labour market test. The employer-led Points-Based System will operate under the same principle as the current Tier 2 sponsorship route, in that applicants will need a job paying above a certain salary threshold to get a visa. However, the salary threshold will be flexible, and a lower salary can be traded against applicants’ qualifications and whether the role is on the shortage list. The absolute lowest salary threshold will be £20,480, which can be off-set by a relevant PhD or a job in the shortage occupation list. Alternatively, a salary of above £23,040 would make a candidate eligible to apply, so long as they meet the necessary requirements of a sponsored job, appropriate skill level and English language competency. As now, skilled workers will be able to be accompanied by their dependants. 

Applicants will need a total of 70 points to be able to apply. 

Characteristics Tradeable Points
Offer of job by approved sponsor No 20
Job at appropriate skill level No 20
Speaks English at required level No 10
Salary of €20,480 (minimum) — €23,039 Yes 0
Salary of €23,040 - €25,599 Yes 10
Salary of €25,600 or above Yes 20
Job in a shortage occupation (as designated by the MAC) Yes 20
Education qualification: PhD in subject relevant to the job Yes 10
Education qualification: PhD in a STEM subject relevant to the job Yes 20

 

Highly skilled workers 

Alongside the employer-led points based system, the Policy Statement outlines an expansion of the Tier One Exceptional talent route, which does not require a job offer in the UK. The most highly skilled, who can achieve the required level of points, will be able to enter the UK without a job offer if they are endorsed by a relevant body.

How this will affect UK employers

Although the Policy Statement does not outline the final detail on UK immigration policy after Brexit, it brings significantly more clarity. The major change is that a large part of the EU labour market will now largely be inaccessible to UK employers. A recent study by the MAC showed that 70% of the EU citizens living in the UK currently would not have been eligible to live in the UK under these rules. Therefore employers should expect a smaller pool of available workers, particularly for ‘low skilled’ roles. Because only very few people will be able to enter the UK to work without a job offer, employers who want to continue to employ migrant workers may have to advertise roles internationally. Furthermore, employers should be aware of the increased costs of sponsoring a migrant worker compared to employing an EU national under FoM. If you are recruiting for ‘skilled positions’ abroad, the new rules will make it easier to employ citizens from outside the EU.

These changes will change the landscape of the UK labour market and companies should act accordingly. Businesses can prepare by making sure they know the policies; by keeping up to date with the details as they emerge, and by preparing ahead of time to make sure a tightened labour market will not come as a shock in January 2021. 

In addition, businesses would be wise to look at how they harness emerging talent to mitigate against the imminent skills shortages. To minimise the effect that a skills shortage will have on your business requires the careful preparation of a talent pipeline which in some cases starts with engagement with the current education system. Many organisations across the UK are now assessing how they build and nurture their own talent through initiatives such as work placements, apprenticeships, internships and investment in the development of their existing workforce. 

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