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The Future of Sponsorship: Working in the UK from 1 January 2021

Posted on 12 November 2020

From 1 January 2021, changes to the UK's work permit visa system will come into effect, although it will be possible to make applications under the new rules from 1 December 2020. The changes are being made to try to mitigate against the loss of workers from the EU as Free Movement rights for EEA and Swiss nationals will come to an end on 31 December 2020. Any EU or Swiss national arriving in the UK to commence living in the UK from 1 January 2021 will require a visa to do so. The up-coming changes represent a widening of the current sponsorship system, known as "Tier 2" but, for some business sectors, the relaxation of the sponsorship regime will not be sufficient to make up for the loss of workers from the EU.

The new immigration system will see the current Tier 2 (General) visa route rebranded as the "Skilled Worker" visa. The current Tier 2 (Intra-Company Transfer) ("Tier 2 (ICT)") visa will simply become the "Intra-Company Transfer" visa.

Like the current Tier 2 system, to sponsor workers for employment in the UK, UK companies will need to be registered with the Home Office as licensed sponsors. Once the licence is in place, companies can sponsor workers for employment in the UK by issuing a Certificate of Sponsorship ("CoS") to the potential employee. The employee must then apply for a Skilled Worker or Intra Company Transfer visa.

For companies who are already registered with the Home Office as Tier 2 Sponsors, their licences will automatically convert to Skilled Worker and/or Intra Company Transfer licences as appropriate.

Skilled Worker

The Skilled Worker visa route will be for new hires to the company, employees who have worked for a linked entity to the UK company but who are now required permanently in the UK, and existing employees who may need to change visa categories in the UK.

Current Tier 2 (General) visa system

Under the current Tier 2 (General) visa system, to be eligible for a CoS to be assigned to the potential employee, the following conditions must be met:

  • Skill Level: The role must be a degree level role (level 6 of the Regulated Qualifications Framework) or a role for which the skill-set is deemed by the Home Office to be in shortage in the UK (known as a "Shortage Occupation"). 
  • Salary: The salary must be at least £30,000 per annum (or the minimum required for the type of role, whichever is higher).
  • Advertising: If the salary is below £159,600 per annum, it is necessary to undertake a process called the Resident Labour Market Test. This is done by advertising the role for 28 days in a Home Office-prescribed manner in order to prove to the Home Office that a suitable applicant who would not require a visa could not be found for the role.
  • Quota: Under the current system, there is an annual quota of 20,700 in-coming Tier 2 (General) visa holders. As such, if the potential employee is making his or her application from abroad, the company must apply for a Restricted Certificate of Sponsorship. The advertising process coupled with the Restricted Certificate of Sponsorship process can mean that it can take two to three months for a company to be able to complete the Tier 2 (General) visa process for a new hire based outside of the UK.
  • Time limit and "cooling-off": A Tier 2 (General) visa holder is limited to six continuous years in the UK in this visa category. After five continuous years as a Tier 2 (General) visa holder, the Tier 2 (General) migrant can apply for Indefinite Leave to Remain (also known as "ILR" or "Permanent Residency") in the UK, provided all criteria for such an application can be met. However, if upon reaching the maximum six-year period the Tier 2 (General) visa holder cannot apply for ILR, he or she must apply for another type of visa in the UK (if there is a visa route available) or leave the UK. Upon leaving the UK, the Tier 2 (General) migrant would then enter a cooling-off period of 12 months during which time he or she is not able to apply for a new Tier 2 (General) visa for employment in the UK unless the salary being offered is £159,600 or above.

New Skilled Worker visa route

Under the new Skilled Worker visa route, the following changes will be made:

  • Skill Level: The skill level of the role will be reduced to A Level (RQF level 3). This means that many more roles will now qualify for sponsorship. However, it does not mean that every role will be capable of sponsorship and roles which are below school-leaver level will not have a visa route available through work sponsorship.
  • Salary: The basic salary threshold will be reduced to £25,600 per annum or the "going rate" required by the type of role, whichever is higher. There will be some instances where a lower salary could be paid, for instance if the role is in a shortage occupation or if the role is a PhD level role.
  • Advertising: The Resident Labour Market Test will no longer be required. However, companies will still need to show that the role is genuine and consider the UK labour market prior to offering the role to someone who would require a sponsored-visa to perform the role.
  • Quota: The annual quota is being removed completely. The removal of the Restricted Certificate of Sponsorship process, along with the strict 28-day advertising required for the Resident Labour Market Test should significantly reduce the time-frames for obtaining the visa and, subsequently, on-boarding the employee for employment to commence.
  • Time limit: After five continuous years in the UK as a Skilled Worker (or a combination of Tier 2 (General) and Skilled Worker), an application for ILR can be made provided all criteria for such an application can be made. However, the six-year time limit in the Tier 2 (General) visa category is being abolished and Skilled Worker visa holders will be able to extend their Skilled Worker visa for as long as is necessary, provided their services continue to be required by the company sponsoring them and their role continues to meet the requirements for sponsorship.

Intra Company Transfer

The Tier 2 (ICT) visa category is designed to enable multi-national companies to parachute skills from their entities outside of the UK to the UK on a temporary basis. The re-branded version of this visa – the Intra Company Transfer visa – is designed for the same.

Like the Tier 2 (General) visa, the current skill level for a Tier 2 (ICT) visa is RQF level 6. Under the new system, the skill level will not fall and therefore Intra Company Transfer visa applicants must be coming to the UK to perform a role which is deemed by the Home Office to be degree level or above.

Tier 2 (ICT) visa holders must currently be paid a salary of at least £41,500 per annum or the minimum salary set by the type of role, whichever is higher. This salary threshold will remain in place for Intra Company Transfer visa applicants.

The main changes to this route are as follows:

  • Time limits and "cooling-off": Tier 2 (ICT) visa holders are currently limited to five years in the UK on this visa (or nine years if the salary is £120,000 per annum or above). Additionally, when a Tier 2 (ICT) visa holder leaves the UK – even if this is before the full five (or nine) years have elapsed – they enter a cooling-off period of 12 months during which time they cannot apply for a new Tier 2 visa. Under the new Intra Company Transfer visa rules, the high-earner threshold will be reduced to £73,900 per annum and therefore an Intra Company Transfer visa holder with at least a salary of £73,900 will be able to extend their visa for a maximum period nine years. Moreover, the "cooling-off" period is being abolished and instead Intra Company Transfer visa holders cannot have held an Intra Company Transfer visa (or a combination of Tier 2 (ICT) and Intra Company Transfer visa) for longer than five years in any six-year period, or nine years in any 10-year period if their salary is £73,900 or above.
  • Switching and ILR: A Tier 2 (ICT) visa holder is currently not permitted to switch from a Tier 2 (ICT) visa into Tier 2 (General) in the UK. If they travel outside of the UK, they enter a cooling-off period and so they cannot apply from outside of the UK until 12 months have passed from the date they leave the UK, unless they will be applying for a Tier 2 (General) visa where the salary will be £159,600 per annum or above. Under the new rules, a Tier 2 (ICT) visa holder or an Intra Company Transfer visa holder will be allowed to switch from their visa route to a Skilled Worker visa in the UK. While the Tier 2 (ICT) and Intra Company Transfer visa still do not lead to ILR, if the employee switches to a Skilled Worker visa, the employee can then begin on a path to ILR and will be able to make such an application after five continuous years in the UK with a valid Skilled Worker visa, provided all other criteria for such an application are also met.

What to do to be prepared for the new immigration system?

Key issues for businesses to consider now in preparation for the end of the Brexit transition period include:

  • Identify who in your workforce are in the UK under EEA Regulations: EEA and Swiss Nationals and their family members residing in the UK by 31 December 2020 must register their right to live in the UK by making applications under the EU Settlement Scheme to obtain permission under UK laws to continue living and working and in the UK. They have until 30 June 2021 to make applications and, if they fail to do so, they will become illegal entrants in the UK on 1 July 2021.
    Those who have been in the UK for five years or more can be granted "Settled Status" which means they may remain permanently in the UK without the imposition of any time limit on their ability to stay in the UK. Those who have been in the UK for less than five years can apply for "Pre-Settled Status" which will give them a grant of leave for a five-year period. It is important to note that Pre-Settled Status therefore has a time-limit and before that time - limit comes to an end, they must apply for Settled Status or a visa under the UK's immigration rules at the time if they wish to remain in the UK.
    Companies should conduct a full audit of their workers in the UK to identify employees who will need to obtain Pre-Settled or Settled Status under the EU Settlement Scheme between now and 30 June 2021. For any employee who has been granted Pre-Settled Status, a record of their visa end date will be required on the company's HR systems, with appropriate reminders in place prior to the expiry of leave to ensure the employee applies for Settled Status or a new visa before the Pre-Settled Status visa comes to an end.
     
  • Become a licensed sponsor: As you may be required to sponsor workers from the EU who will commence employment on or after 1 January 2021, we recommend applying to the Home Office for a sponsor Licence (if not already in place) as soon as possible to ensure the company is ready and able to sponsor workers from 1 January 2021.

 

 

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