Employing foreign nationals: points-based system

Andrew Osborne of Hammonds LLP continues a series of articles on employing foreign nationals with a look at the points-based immigration system. Foreign nationals from outside the European Economic Area (EEA) and Switzerland who wish to enter the UK to work or study must qualify under one of the tiers in the points-based system (PBS).

Introduction

A five-tier framework underpins the points-based immigration system introduced in 2008. The tiers are:

• tier 1 - highly skilled individuals to contribute to growth and productivity (implemented between 29 February and 30 June 2008);
• tier 2 - skilled workers with a job offer and certificate of sponsorship to fill gaps in the UK labour force (implemented 27 November 2008);
• 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 European labour force);
• tier 4 - students (implemented 31 March 2009); and
• tier 5 - youth mobility and temporary workers coming to the UK to satisfy primarily non-economic objectives (implemented 27 November 2008).

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

Tier 1

Tier 1 embraces four sub-categories of migrants: general (those migrants who wish to find highly skilled employment in the UK ); entrepreneurs; investors; and post-study work (international students who have studied in the UK).

Tier 1 (general) criteria

Individuals applying 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 three sets of objective criteria, which are:

• sub-category specific criteria;
• competence in English language; and
• maintenance (ie funds).

Applicants must reach the pass mark for each criterion to gain entry to the UK and to extend their right to stay when it is due for renewal after three years.

The specific criteria for the general sub-category cover qualifications, previous earnings, age and UK experience. From 31 March 2009, the UK Border Agency (UKBA) made the following changes:

• A bachelor's degree is no longer acceptable for claiming points under the qualifications criterion for initial applications. Only a PhD or master's degree is acceptable.
• In relation to previous earnings for initial applications, the minimum salary is increased to £20,000 (previously £16,000).

The changes apply to new applicants and not extension applicants.

Unlike skilled workers applying under the tier 2 (general) sub-category of the PBS (see below), successful tier 1 (general) applicants do not need a specific job offer and are able to perform any type of highly skilled work in the UK for any employer. They can also work on a self-employed basis. Examples of tier 1 (general) highly skilled work include senior marketing roles, IT systems design and senior HR roles. Employers must carry out the usual prevention of illegal working checks for tier 1 (general) migrants (see Employing foreign nationals: avoiding illegal working in this series for more details).

Further details of the tier 1 (general) application process and requirements can be found in Tier 1 (general) of the points-based system - policy guidance (PDF format, 614K) (on the UK Border Agency (UKBA) website).

Tier 2

Tier 2 requires migrants to be sponsored by a body licensed by the UKBA. This differs from tier 1 applications for which no sponsor is required.

Tier 2 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. This sub-category is also for applicants coming to fill 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-based branch of the organisation. The migrant must have worked for the sponsoring organisation for at least six months directly prior to the transfer. Since 31 March 2009 sponsors must be able to provide evidence of this.
• Sports people - for elite sports people and coaches whose employment will make a significant contribution to the development of their sport at the highest level.
• Ministers of religion.

Applicants under the general and intra-company transfers sub-categories must show that they have enough points to qualify for entry, including points related to the certificate of sponsorship that they must have before applying for entry. The points can also be earned against three sets of objective criteria: attributes (with sub-category-specific criteria); competence in English language; and maintenance (ie funds).

The specific criteria for justifying the initial employment and sponsorship of a migrant worker in relation to the tier 2 (general) sub-category are whether:

• the job is in a shortage occupation;
• the resident labour market test has been satisfied;
• the job is an intra-company transfer; or
• the migrant work is switching from a tier 1 post-study category.

The Migration Advisory Committee (MAC) to the UKBA publishes shortage occupation lists for the UK and Scotland every six months. The lists are available on the UKBA website. In February 2009 the Government announced that from 1 April 2009 the lists would be used to trigger reviews focused on up-skilling resident (ie UK) workers for these occupations, a process that is intended to make the UK less dependent on migration in the future. The first review was published in April and the revised lists came into force on 15 June 2009. The Home Secretary has also asked the MAC to report on:

• whether or not there is an economic case for restricting tier 2 to shortage occupations (which, if implemented, would prevent employers from freely recruiting migrant workers and from transferring employees within the organisation to the UK);
• the economic contribution made by the dependants of PBS migrants and their role in the labour market; and
• what further changes should be made to the criteria for tier 1 in 2010/11, given the changing economic circumstances.

The resident labour market test is required when the job to be filled is not a shortage occupation. For the applicant to be able to claim points under the resident labour market test the sponsoring employer must follow the code of practice relevant to that occupation before assigning a certificate of sponsorship. There are currently over 20 codes and each one includes: the skilled jobs at N/SVQ level 3 or above in each occupation for which sponsors are allowed to issue certificates of sponsorship; the minimum appropriate salary rates; and the acceptable media and methods for meeting the test. The codes of practice can be accessed on the Codes of practice for sponsored skilled workers page of the UKBA website.

From 1 April 2009 the Government strengthened the resident labour market test so that employers must advertise tier 2 (general) jobs to resident workers through Jobcentre Plus and a journal, newspaper or website specified in the relevant code before they can employ a worker from outside the EEA.

The specific criteria for justifying the initial employment and sponsorship of a migrant worker in relation to the tier 2 intra-company transfers sub-category are that the transferring job must be at least skilled level N/SVQ 3 and that the applicant's pay must be at an appropriate rate for the job in question. The codes of practice (see above) contain details of the relevant salary rates.

Further details of the tier 2 application process and requirements can be found in Tier 2 of the points-based system - policy guidance (PDF format, 433K) (on the UKBA website).

Tier 4 (students)

Tier 4 is the most recently implemented tier of the PBS. Student applicants under this tier must be sponsored by a college or university. There are two tier 4 sub-categories:

• Adult or general student - for students coming to the UK for post-16 education.
• Child student - for children aged between 14 and 17 to come to the UK for their education. Children aged between four and 15 may be educated at independent fee-paying schools only.

Adult students are allowed to work during their stay. The right to work is restricted to 20 hours per week during term time although students may work full time during vacations. An advantage for an employer of employing a tier 4 adult student is that, as it is not the sponsor (because the college or university is the sponsor), it is not responsible for ensuring compliance with sponsor duties, such as record keeping and reporting. The employer needs to check only that the migrant is an adult student. However, employers must comply with the prevention of illegal working documentation checks.

Further details of the tier 4 application process and requirements can be found in Tier 4 of the points-based system - policy guidance (PDF format, 420K) (on the UKBA website).

Tier 5

Tier 5 is divided into two categories: youth mobility and temporary workers.

Youth mobility scheme - This scheme was designed to allow young people to travel to the UK for "non-economic" reasons. It essentially replaced the working holidaymaker scheme.

Currently only four countries (Australia, Canada, Japan and New Zealand) participate in the scheme and applicants must be a national of one of these countries to be eligible. Under the scheme, the relevant national government is deemed to be the sponsor and there is a country minimum annual allocation of spaces (currently 1,000 per country).

During their stay in the UK successful tier 5 (youth mobility scheme) applicants can do whatever work they like without any restriction on hours. However, they may not take up self employment (subject to certain exceptions), nor can they work as a professional sports person (including as a sports coach) or as a doctor in training. As with tier 4 adult students, an advantage for an employer of employing a tier 5 youth mobility scheme migrant is that it does not have to ensure compliance with the onerous sponsor duties (as the relevant government will be the sponsor). However, the employer must comply with the prevention of illegal working documentation checks.

Further details of the tier 5 (youth mobility scheme) application process and requirements can be found in the Tier 5 (youth mobility scheme) of the points-based system - policy guidance (PDF format, 325K) (on the UKBA website).

Temporary workers - There are five sub-categories in this tier including:

• creative and sporting - for people coming to the UK to work or perform as sports people, entertainers or creative artists for up to 12 months; and
• charity workers - for people coming to the UK to do voluntary work and unpaid work for a charity.

Further details of the tier 5 (temporary worker) application process and requirements can be found in the Tier 5 (temporary worker) of the points-based system - policy guidance (PDF format, 361K) on the UKBA website.

Short-term visitors

The Government has reviewed the short-term migration system and from November 2008 the immigration rules were amended to implement four categories of short-term visitor: business, sports, entertainer and special visitors.

In the business visitor category, only migrants who are visa nationals (ie migrants from certain countries, such as South Africa, India and China, who require a visa to enter the UK) need permission to come to the UK for up to six months. Non-visa nationals (ie migrants from countries such as the US and Australia) do not need permission to enter the UK as a business visitor and can apply for permission when they arrive.

To be able to come to the UK as a business visitor, applicants must show that they fulfil a number of criteria, including that they: will visit the UK only for up to six months; are based abroad; have no intention of transferring their base to the UK even temporarily; and receive their salary from abroad.

Applicants must also show that they plan to do one or more of the permissible activities, such as attending meetings (including interviews), which have been arranged before coming to the UK .

Further details are available on the Business and special visitors page of the UKBA website.

Next week's article will look at the rules on sponsorship and will be published on 20 July.

Andrew Osborne is Partner, Sports Group and Head of Business Immigration at Hammonds LLP (Andrew.Osborne@hammonds.com).

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