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Post-Brexit Immigration: Introducing the Points-Based Immigration System

Mayer Brown
02/11/2020

In February 2020, the Home Office of the UK government released a policy statement noting the details of a new era of immigration to launch in the wake of Brexit. The new system, which remains encapsulated in the February 2020 policy statement, is purported to fulfil the UK Government’s commitment to “take back control of its borders by ending free movement and introducing a single, global immigration system” (emphasis added).

Set to be in full force by the end of the Brexit transition period on January 1, 2021, the UK’s post-Brexit immigration policy is founded upon a new Points-Based Immigration System (PBS). In addition to PBS qualification, the policy includes several specialized immigration routes through which foreign nationals may gain admission to the United Kingdom. For example, the Global Talent Route, which is currently available for non-EU citizens, will also be available for EU citizens 1 who are exceptionally skilled in prominent fields including, for example, science, humanities, engineering, the arts and digital technology, and are endorsed by a recognized UK body, as approved by the Home Office.

As a result of these new policies, the UK Government is planning to suspend the admission cap for skilled workers and remove resident labor market tests altogether. This shift in policies is intended to cut down processing times for new employment authorization applications by as much as eight weeks and liberalize the system for employers. The objective is to implement a level playing field of immigration control for all nationalities while simultaneously attracting the skills, talent, and investment that the United Kingdom requires.

1.  What is the Points-Based System? 

As of January 1, 2021, the PBS will be applied to all prospective applicants that are outside of the UK resident labor market and are seeking employment in the United Kingdom in occupations requiring “skilled workers”—the Skilled Worker Route. All employers in the United Kingdom seeking to hire these workers must have a sponsor license issued by the Home Office.2 The Home Office included in its PBS policy statement a list of Standard Occupational Classifications from the Office for National Statistics for employers to determine whether a given job meets the standard to be considered a skilled-worker occupation.

Under the PBS, all individuals seeking employment in the United Kingdom, excluding Irish citizens, must apply in advance, providing evidence that they meet specific requirements for which they will score points. Each applicant will be required to initially demonstrate the following:

i.  The applicant has a job offer from a Home Office licensed sponsor.

ii.  The job offer is at the required skill level3

iii.  The applicant speaks English to the required standard.

The new policy also introduces new salary requirements for jobs offered to individuals outside of the UK resident labor market.4 Each job offer must typically meet a new minimum salary threshold—the higher of £25,600 or the going rate for the specific occupation.5

Applicants are also allowed to “trade” certain characteristics in substitution for a lower salary. If the salary offered is below the minimum threshold, but no less than £20,480, an applicant may still be eligible under the PBS if:

i.  The applicant’s job offer is in a specific shortage occupation.6

ii.  The applicant holds a PhD relevant to the job. Or

iii. The applicant holds a PhD in a STEM subject relevant to the job.

All applicants for whom the PBS applies will be required to obtain a minimum of 70 points in order to apply for employment authorization in the United Kingdom. The full chart of characteristics and related point allocations can be found here.

Employers are not required to be Home Office-licensed sponsors if they seek to hire an individual from the UK resident labor market that has existing right-to-work documentation, including EU citizens registered through the EU Settlement Scheme and non-EU citizens with indefinite leave to remain.  An employer also will not need to be a Home Office-licensed visa sponsor to employ a migrant under the Global Talent route. 

2.  How Does the New Skilled Worker Route Impact Current Immigration Routes?

Employers should take note of the interrelation of the new Skilled Worker Route with existing employment-based immigration routes. Significantly, the Skilled Worker Route will effectively replace the current Tier 2 (General) Route. The UK Government will suspend the annual cap under the current Tier 2 (General) system as well as eliminate the existing Resident Labour Market Test requirement. Additionally, reduced salary and skill-level requirements for the Skilled Worker Route will replace the requirements of the predecessor Tier 2 (General) Route. These new requirements will broaden the occupational categories that fall within this employment sponsorship process.

Conversely, the Intra-Company Transfer (ICT) Route will remain unchanged in its salary and skill-level requirements. Although there are distinguishing characteristics between the new Skilled Worker Route and the ICT Route, there is considerable overlap, and employers should consider the advantages and disadvantages of choosing one over the other. The ICT Route, for example, has been and will remain an option for temporary assignments of workers in the United Kingdom. The Skilled Worker Route may also be used for temporary assignments. As such, the reduced salary and skill-level thresholds of the Skilled Worker Route may allow more flexibility for employers during the hiring process, provided that the additional requirements of the Skilled Worker Route are also fulfilled.

Employers seeking to sponsor workers on temporary assignments through the Skilled Worker Route should take particular note of the differences in compensation requirements between these two routes. Specifically, ICT workers need only be paid at the required level while the worker is in the United Kingdom and some allowances may be counted as part of that salary. However, Skilled Workers must be compensated at the required salary throughout the duration of the visa and allowances cannot be counted as part of that salary.

3.  How Does Brexit Impact the Freedom of Movement?

Beginning January 1, 2021, freedom of movement will end for individuals traveling between the United Kingdom and the European Union with continued exceptions for individuals traveling under the country’s visitor exceptions and individuals from the Common Travel Area. Prior to January 1, 2021, EU citizens will continue to have free movement rights under the Brexit transition arrangements.

4.  What is the European Union Settlement Scheme?

All EU citizens and their family members admitted to the United Kingdom prior to January 1, 2021 will be eligible for the EU Settlement Scheme and will have until June 30, 2021 to submit an application under that scheme. The EU Settlement Scheme is a program created by the Home Office to register UK residents who are citizens of the EU, the European Economic Area (EEA), and Switzerland, as well as their family members. The program is intended to grant residency rights to eligible individuals who began their residency in the United Kingdom prior to the end of the Brexit transition period. Eligible individuals are generally granted either “Settled” or “Pre-settled” status.

Individuals are typically granted Settled status if they (1) became residents of the United Kingdom prior to January 1, 2021 and (2) have resided in the United Kingdom for a period of at least five continuous years. Individuals who are granted Settled status are allowed to remain in the United Kingdom indefinitely with limitations on extended absences from the United Kingdom during ongoing residency.

Individuals are typically granted Pre-settled status if they (1) became residents of the United Kingdom prior to January 1, 2021 and (2) have not resided in the United Kingdom for a period of at least five continuous years. Individuals that are granted Pre-settled status are allowed to remain in the United Kingdom for an additional five-year period. During the additional five-year period, these individuals can apply to change their status to Settled upon completion of the five-year period.

Eligible candidates for the EU Settlement Scheme should apply prior to June 30, 2021. Additional information related to the EU Settlement Scheme application process can be found here.

5.  What’s on the Horizon for Brexit?

Although experts have contemplated the need for an extension of the transition period in light of the COVID-19 pandemic, the deadline for extending the transition period passed on June 30, 2020, and no further extensions are accepted under the provisions of the EU Withdrawal Agreement Act 2020. This means that the Brexit transition period will end on December 31, 2020, whether or not the United Kingdom and European Union come to a consensus and ratify a new trade agreement. A lack of a new trade deal would leave much in the balance in the way of the United Kingdom’s relationship with the European Union moving forward; however, the United Kingdom will move forward with its new immigration policies regardless of its ability to secure the new trade deal with the EU.

6.  What Should Employers be Thinking About?

Apply Now for a Sponsor LicenseAs the UK Government plans to open the new immigration routes this fall, employers that will be required to apply for a sponsor license with the Home Office should begin that process as soon as possible. Securing a sponsor license now will ensure a seamless transition for those new hires that will be required to apply through the skilled-worker route.

Budget Considerations and PlanningEmployers should also be prepared for new costs related to onboarding processes. As a result of the new PBS, employers will incur new costs through visa application fees, Immigration Skills Charge fees, and the Immigration Health Surcharge. The Immigration Skills Charge will apply to UK employers for each skilled migrant worker and intracompany transfer. The Immigration Skills Charge will be levied through a fee of £1,000 per skilled worker for the first twelve months and £500 for every six-month period thereafter. Additional time and planning will be required to secure work authorization in the UK for EU citizens.

Legal Right to Work ChecksCompanies hiring EU citizens after the end of June 2021 should also consider realignment of existing validation procedures for legal right-to-work checks. Until the end of June 2021, the checks will remain the same, i.e., EU citizens will be able to present their passports and/or ID cards to confirm their legal right to work in the UK.

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1 References throughout this blog to citizens of the European Union also apply to citizens of the European Economic Area and Switzerland.

2 The sponsorship requirement will also apply to individuals seeking admission to the United Kingdom through the Health and Care Visa program, the student route, and some specialized worker routes.

3 Jobs that meet this threshold are to fall within the Regulated Qualifications Framework’s (RQF) level 3 or above. Additional information on the RQF can be found here.

4 Different salary requirements are applied to workers in certain health and education jobs as well as for “new entrants” at the start of their careers.

5 The “going rate” is the specific salary requirement for a given occupation. Details on the going rate for eligible occupations under the PBS can be found at Annex E in the Home Office’s PBS policy statement.

6 Further guidance has yet to be published on the full list of occupations that fall into this category; however, the Migration Advisory Committee has confirmed that it will publish this list when available.