Employers guide to the UK Points-based Immigration System

Last updated: 20 December 2021

Estimated reading time: 10 minutes

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The government launched the UK points-based immigration system in January 2021, promising that the new scheme would open the UK to the ‘brightest and the best from around the world’ and would apply to the recruitment of EU and non-EU citizens. There are daily media reports of UK employers struggling to fill vacancies so in this article our business immigration solicitors look at what employers need to know about the UK points-based immigration system in order to successfully recruit staff from overseas.

Jump to:

  1. How has the UK immigration system changed?
  2. How the points-based immigration system works
  3. The minimum salary thresholds and the skilled worker visa
  4. Does the global talent visa give employers more flexibility?
  5. Tips for UK employers on how to work with the points-based immigration system

How has the UK immigration system changed?

With the end of the Brexit transition period and the introduction of the UK points-based immigration system the key points to note are:

  • EU and non-EU citizens are now treated equally by the Home Office with EU nationals requiring entry clearance to enter the UK unless they moved to the UK before the 31 December 2020 and applied for pre-settled status or settled status under the EU Settlement Scheme.
  • There is no general low-skilled work visa route to replace EU nationals who are no longer able to exercise free movement and come to the UK to take up lower skilled jobs.
  • The points-based immigration system means those seeking entry clearance need to score seventy points under the points system to secure a work visa. Some of the points are compulsory and others are tradeable.
  • The skilled worker visa replaces the Tier 2 (General) visa although existing employees on Tier 2 (General) visas are able to continue in employment until the expiry of their Tier 2 (General) visa. They can then apply to switch to the skilled worker visa, provided that they meet the eligibility criteria.
  • There is no annual cap or limit on the number of skilled migrant workers who can apply for the skilled worker visa.
  • To sponsor a skilled migrant worker a UK employer no longer has to conduct a resident labour market test (RLMT) before being able to recruit from overseas. This change was intended to reduce bureaucracy and speed up the recruitment of overseas workers.   
  • The skill threshold for sponsoring a worker on the skilled worker visa is RQF Level 3 (equivalent to an A-Level). The skill threshold for the old-style work visa, the Tier 2 (General) visa, was RQF Level 6 (equivalent to degree level).
  • The immigration skills charge is payable for all sponsored employees. As immigration control has been extended to EU workers who came to work in the UK after the end of free movement this has increased the cost of recruitment for UK employers. The government guide to the immigration skills charge can be accessed online.
  • A graduate visa has been introduced for international students in the UK who want to stay in the UK after their graduation. To qualify for the graduate visa an applicant does not need a job offer from a UK employer and there is no minimum job skill level or minimum salary threshold. The graduate visa offers greater flexibility to UK employers and to eligible international students in comparison to the skilled worker visa. However, unlike the skilled worker visa, the graduate visa does not lead to UK settlement.  

The post January 2021 immigration changes have had significant legal, financial, and practical consequences for all UK employers, large or small, and whether or not the business already had a workforce comprising of EU or non-EEA employees.

How the points-based immigration system works

Those who want to enter the UK for work need a points-based work visa and need to score a minimum of seventy points to secure a visa.

The new points-based immigration system is more complicated than simply adding up and reaching 70. That is because some elements of the points system are compulsory. That means however skilled your overseas based recruit is, or whatever salary you are proposing to offer, your sponsored worker may not meet the points-based immigration system eligibility criteria.

The simplest way to look at how the new points-based immigration system works is to look at it in tabular form:

Points awardThe number of points awardedAre the points tradable?
Job offer by an employer with a sponsor licence20No
Job offer at an appropriate skill level (at least A level qualification)20No
Visa applicant speaks English to the required standard set by the Home Office10No
Salary is £25,600 gross or over per year20Yes
Salary is £23,040 to £25,999 gross per year10Yes
Salary is from the minimum of £20,480 to £23,039 gross per year0Yes
Job is on the Shortage Occupation List produced and updated by the Migration Advisory Committee20Yes
The applicant has a PhD in a subject that is relevant to the job offer10Yes
The applicant has a PhD in a STEM subject that is relevant to the job offer20Yes

Once an employer has studied the table and added up the points it should be straightforward to see if a work visa applicant will have sufficient points to qualify for a skilled worker visa. However, as the non-tradable points are the compulsory points the new points-based immigration system is producing some unexpected results.

For example, a scientist wanting to come to the UK secures a job offer with a sponsor licence holder at a starting salary of £100,000 a year. The applicant has a STEM PhD qualification. Their points should total eighty but the scientist isn’t eligible for a skilled worker visa as they don’t meet the compulsory and non-tradable English language speaking requirement. That is the case even if the new recruit’s ability to speak the English language isn’t a significant consideration for an employer, who is more interested in the job applicant’s scientific qualification and level of expertise. In this scenario, the job applicant may be eligible to apply for a global talent visa as there is no English language set criteria under that route.

The minimum salary thresholds and the skilled worker visa

The minimum salary thresholds are recommended by the Migration Advisory Committee (MAC) and then determined by the UK government. Disappointingly for some UK regions, there is no regional minimum salary threshold or London weighting. A veterinary surgeon or scientist has to be paid the same minimum salary threshold or going rate for the job whether or not the job is based in Sheffield, London or the home counties. 

With the minimum salary threshold there are additional complexities to the minimum salary rules because UK employers have to pay skilled worker visa holders the higher of the:

  • Going rate for the specific job that they want to sponsor as set out by the Home Office.
  • The minimum salary threshold unless the work visa applicant can secure the seventy required points by the award of points for a PhD which is relevant to the job offer, a PhD in a STEM subject which is relevant to the job offer, or the job is on the Shortage Occupation List or the job applicant qualifies as a ‘new entrant’.

UK employers have realised that it isn’t sufficient for their HR staff to possess a calculator to add up the seventy points. They, or their business immigration solicitor, also needs to have a thorough understanding of how the new UK points-based immigration system works. For example, only basic salary counts towards the minimum salary threshold and not allowances or employer pension contributions.

When it comes to ‘new entrants’ the salary requirements are set at thirty percent less than the rate for an experienced worker in the same job. That means that the minimum salary threshold of £20,480 is reduced for a new entrant unless a higher ‘going rate’ is applicable to the specific job.

Does the global talent visa give employers more flexibility?

HR staff also need to be aware to the option of highly skilled workers being eligible to apply for a global talent visa, rather than sponsoring them to come to the UK on a skilled worker visa. That is because there are significant advantages to both employer and employee of the visa applicant entering the UK on a global talent visa, namely:

  • No need for a job offer.
  • The employer does need a sponsor licence to employ someone who has secured a global talent visa.
  • A global talent visa applicant does not have to meet the English language eligibility criteria.
  • The global talent visa applicant has greater flexibility over work options and the potential to secure accelerated settlement in the UK, provided the applicant can secure endorsement from an endorsing body by proving they have talent or promise in their chosen specified field or area of expertise.

The main point for employers is that under the new UK points-based immigration system there is no immigration route for lower-skilled workers unless, for example, they meet the eligibility criteria to secure a visa under the seasonal agricultural worker scheme.

Tips for UK employers on how to work with the points-based immigration system

Business immigration solicitor Rashid Uzzaman has provided tips on how employers, from SME to multi nationals, should best work with the UK points-based immigration system.  

1. Take a careful look at the makeup of your current workforce. What percentage of your workforce are low skilled workers? What percentage of your workers are from the EU? Of those workers who are from EU countries do you know how many have already secured pre-settled status or settled status under the EU Settlement Scheme? What percentage of your workforce are from non-EEA countries?

2. Do you have a business plan in place? Do you have ambitious expansion plans? Consider how those plans may be affected if your suppliers of materials or parts have to increase their prices because their overheads go up as a result of the reduction in availability of low skilled EU workers. Can you reduce your exposure to a likely increase in supplier costs by changing supplier, for example, purchasing from overseas or fix your prices now?

3. Are you heavily reliant on a current workforce of low skilled workers from the EU? If they have not already done so, encourage your existing EU workers to apply for pre-settled status or settled status. Although applications to the scheme stopped on the 30 June 2021 the Home Office is still allowing late applications where there was a reason for the delay in applying for settled status.

4. Have you thought about how to retain your staff? As the government has reiterated that a low skilled or temporary work route into the UK for non-EEA or EU workers won’t be introduced to ease the recruitment crisis in some sectors of UK industry, employers need to look at how they can encourage their existing workforce to stay in their employment. Does your business already have staff retention schemes in place, such as rewards for long service or bonus incentives?

5. In an age of low unemployment within the UK, how can you attract UK low skilled workers to your business? Can you offer flexible working or apprentice schemes or offer work experience packages though forming links with schools and colleges? Will you need to resort to golden hello packages to attract recruits?

6. Can you counteract increased competition for low skilled workers by increasing productivity? If you are concerned about the prospects of recruiting sufficient numbers of low skilled workers because of the end of free movement and the increased competition to recruit UK low skilled workers, are there elements of your working practices that could be automated or procedures you could put in place to increase productivity?

7. Apply for a sponsor licence now. If you know you will need to recruit non-EEA or EU workers in future then apply for a sponsor licence now. It takes time to secure a sponsor licence because so many more UK companies now need a sponsor licence as EU nationals, as well as non-EEA nationals, are required to have a sponsoring employer if they are subject to immigration controls and require a skilled worker visa. 

8. Comply with your sponsor licence duties. If you already have a sponsor licence then make sure that you comply with your sponsor licence duties as the consequences for your business of having your sponsor licence suspended or revoked have increased with the introduction of the new points-based immigration system.

9. Do you need to invest in more HR staff? You may need more personnel to manage your sponsor licence because new EU employees arriving in the UK now need to be sponsored under a skilled worker visa. Alternatively, do you need to invest in a sponsor licence management service or training seminars for your HR staff and sponsor licence key users?

10. Plan for a potential increase in recruitment costs. It is now harder for UK employers to recruit low skilled workers in some sectors of the UK economy without use of specialist recruitment agencies. Furthermore, if you need to recruit skilled workers from overseas then EU job applicants need a work visa and sponsorship. That means you are likely to be incurring extra business overheads in securing and maintaining a sponsor licence as well as having to pay the immigration skills charge for sponsored skilled migrant workers.

11. Think outside the box. If you are struggling to recruit overseas workers because of the constraints of the skilled worker visa then the global talent visa or the graduate visa may be alternate routes to recruitment as both visas, in their different ways, offer greater flexibility to UK employers.

12. Keep up to date with future points-based immigration system changes. It may be trite to say keep up with the new immigration landscape and changes, but it is true. Recruitment of the workers that businesses need is becoming harder and your business and so the HR team need to be one step ahead of the competition, whether your company is a SME or a large multinational organisation. With ongoing careful planning and advice your business can try and stay ahead of its competitors in the race to recruitment in the post points-based immigration system era.

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What next?

For further advice and support when recruiting from overseas and preparing for the points-based immigration system, get in touch with our business immigration experts on 0800 689 1700, email us at enquiries@hjsolicitors.co.uk, or fill out the short form below with your enquiry.

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