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Brexit and the Implications for Recruitment in the UK

Brexit and the Implications for Recruitment in the UK

SM
BY Samantha Mackie
Employment Law & HR

As the transition period draws to an imminent close on 31st December 2020, with it ends the free movement of people. From 1st January 2021 employers should be prepared to review their right to work processes, revise offer letters and consider their approach to recruitment with the new immigration points based system in mind. In this special edition of LAWmail, we have put together a short need-to-know guide that answers the common queries faced by our clients about their business in the lead up to Brexit.

What is it the points based system?

The post Brexit immigration system requires any new European or EEA migrant to have a visa before entering the UK. To employ any new talent from Europe, employers must hold a sponsorship licence. The current Tier 2 visa routes will then be replaced by the new skilled worker and Intra Company Transfer route. To be granted a visa, their eligibility will be assessed using set criteria that each carries a prescribed number of points.

 

Is using points as the basis of visa eligibility a new requirement?

The Immigration points based system is already in operation around the world in countries such as Australia, Canada and New Zealand. Using points as a basis of visa eligibility is also not a new procedure for the United Kingdom. Until the new system goes live in December 2020, the current system is still in effect. The current system entails international (non-EU/EEA) applicants to be assessed on a points basis before being granted right to work under the Tier 2 route.

 

What are the applicant requirements under the new system?

To be granted a visa the applicant must attain 70 points. The current annual visa limit of around 20,700 visas per year has been suspended for the foreseeable future and provided that the potential employee meets the criteria, their visa should be secured.

To be successful in their application, an applicant must meet all three of the mandatory criteria:

  • Have a job offer from an authorised sponsor                                                      20 points
  • The role to be sponsored is at the appropriate skill level                                                                                      20 points
  • Evidence English language skills at B1 level                                                      10 points

 

This criteria requires the sponsored role to be included on the Home Office Standard Occupational List. From there, the employer must evidence a job offer in favour of the applicant and the company must have an active licence in place. If the above can be satisfied, the candidate will have already attained 50 of the 70 points required for success. The remainder of the applicant’s points are ‘tradeable’ which brings some welcome flexibility to the process.

The final 20 points are achieved by one of the following requirements, which largely centre on the applicant’s salary. We would recommend employers consider if the visa financial requirements suit their budgeting and resourcing before beginning the process.

  • The job is in a shortage occupation and the applicant’s salary equals or exceeds both £20,480 per year and 80% of the going rate for SOC code.
  • The applicant’s salary equals or exceeds both £25,600 and the ‘going rate’ for the job’s SOC code.             
  • The applicant has a PHD in a subject relevant to the job (the sponsor must provide a “credible explanation” as to how it is relevant) and their salary equals or exceeds both £23,040 and 90% of the going rate for the SOC code.    
  • The applicant has a PHD in STEM subject relevant to the job and the applicant’s salary equals or exceeds both £20,480 and 80% of the going rate for the SOC code.                      
  • The applicant is a new entrant to the labour market and their salary equals or exceeds both £20,480 per year and 70% of the going rate for SOC code.
  • The job is in a listed health or education occupation and the applicant’s salary equals or exceeds both £20,480 per year and the going rate for SOC code.             

 

As this is one of the more complex aspects of the process, employers are encouraged to seek advice. If the proposed role for sponsorship is deemed as falling within a UK skill shortage some of the more rigorous financial requirements need not apply. Employers should note that the salary requirements for ‘new entrants’ differ from any ‘experienced worker’. Under the new skilled worker visa, the decision was made to drop the salary requirement from £30,000 to £25,600 for the experienced worker to attract talent to the UK market.

 

What does this mean for UK businesses?

The introduction of the post-Brexit point based system is one of the biggest overhauls of sponsored migration since the original points based system was created 12 years ago for international residents. It is likely that it will revolutionise recruitment practices, increase diversification pools within the workplace and provide sponsorship opportunity with more eligible roles than before. Although the new system increases prospects of eligibility, there are some sectors that are feared to be left behind.  Considering the potential salary requirements in conjunction with the skills and Standard Occupational Codes applicable, the hospitality, agricultural and care sector may be adversely affected by the new changes. Organisations within these sectors are encouraged to bolster their recruitment practices now to help ease the pressure of any potential shortages that may initially occur. The government have indicated that they may amend the tradeable points to support sectors if there is a widespread impact on labour but until that happens, we would encourage those employers to prepare and act now.

 

What if I currently employee EU and EEA employees who are already resident in the UK?

The good news for UK employers is that existing European and EEA employees are not required to be sponsored under the new Points Based System. When the new system goes live, provided that the employee is already domiciled in the UK, the employer can continue with current right to work checks which are enforceable until the 1st July 2021 after the European Settlement Scheme closes. Employees may freely choose to share evidence of their pre-settled or settled status before the application window closes, however it wouldn’t be advisable for employers to require updated right to work until the scheme closes. What is meant by “pre-settled” and “settled” status has been covered in previous editions of LAWmail, and this is something that the affected employees should be looking into now if they haven’t already.

 

What can I do to mind my business post-Brexit?

We would encourage employers to consider any recruitment that they may wish to carry out over the next year and assess the likelihood of the need for a licence. Although an initial outlay in the midst of a pandemic, the skilled worker licence could become a useful tool to fill internal skills gaps and maintain full service delivery with the retained ability to access the full candidate pool at a crucial time for business. As a bottle neck of applications to the Home Office may be initially expected, this may cause delays in licence and visa outcomes which may have a domino effect on securing the best talent for roles. To avoid this, employers are encouraged to recruit now where possible.

 

Other Considerations

The post-Brexit immigration system also largely amends the rules on ‘switching’ which allows potential candidates to be sponsored if they already have their own right to work from a different visa. Caution should be exercised as common visa routes such as visitors and short term students are excluded from switching. The rules relating to the popular intra company transfer route have also been widened, lowering the length of service that a graduate or employee may require before being eligible for international mobility. Employers are always encouraged to seek advice on whether eligibility requirements may be met before spending time and resources on recruitment planning.

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