At the end of the Brexit transition period on 31st December 2020, the UK will leave the EU single market and the free movement of people between the UK and EU will no longer apply. The UK will therefore be free to set its own immigration rules pertaining to entry and residence of citizens from outside the British common travel area.

Summary of Significant Changes Affecting Foreign Employees from 1st January 2020

• EU and non-EU citizens will be treated in the same way
• The resident labour market test will be scrapped
• The minimum salary requirement of £30,000 per annum has been lowered to £25,600 (for the majority of applicants)
• The skill level threshold will be reduced from RQF 6 to RQF 3 (approximately A-Level standard)
• The immigration cap (currently set at 20,700) on skilled labour will be ‘suspended’

What are the New Immigration Rules?

The government has considered whether the UK should adopt an ‘Australian-style’ points-based system as the ideal model for selecting migrants with the requisite attributes to enable the UK to flourish as an independent nation outside of the EU.

The Home Office will introduce a new employer-led points-based system under Appendix W ‘Workers’ whereby migrants will score points for the following:

• A confirmed job offer with an approved Home Office Sponsor at RQF Level 3 (A-level)
• A salary offer of at least £25,600 per annum (a reduction of the current salary level set under the Tier 2 (General) Skilled Worker category of at least £30,000)
• A proficient understanding of the English language
• Being able to ‘trade’ points for salary (minimum salary of £20,480) in exchange for the role being within the shortage occupation or a PhD-level role

The Home Office intend to scrap the cap on the number of people who are able to enter the UK under the skilled ‘worker’ route, as well as remove the resident labour market test, which are very welcome additions to the rules.

How will the New Points-based System Work?

Applicants would need to achieve a total of 70 points with three fixed characteristics and others as ‘tradeable’ points. These are as follows:

Will There be a Rise in Labour Costs Due to the New Immigration Rules?

One of the biggest concerns raised by employers is the rise in labour costs as a result of the new immigration rules. In this respect, the Home Office has specified that employers will still be required to pay sponsored migrants the appropriate salary rate for their role as specified in the Home Office Standard Occupational Codes of Practice. Therefore, where this is higher than the general salary threshold, the higher salary requirement would need to be met.   

What are Shortage Occupations?

The Home Office will commission the Migration Advisory Committee (MAC) to produce a shortage occupation list covering all occupations within the skilled worker category, which will be kept under review. Where an applicant scores extra points for working in a sector where there is a recognised skills shortage, they could be paid less than £25,600.

Will Employers Need to Consider Additional Costs Due to the New Immigration Rules?

It is likely that many employers will be worried by the new immigration rules, which will affect both EU citizens and those outside of the EEA, as consideration will need to be made into the significant cost implications of recruiting non-UK workers. The UK government will levy the Immigration Skills Surcharge and Immigration Health Surcharge on the same basis as now.

Will There Be a Category for Low-skilled Workers Under the New Immigration Rules?

Perhaps the most contentious change in the immigration rules is the Home Office’s announcement that there will not be an immigration category for the ‘low-skilled’ workers, even on a temporary or transitional basis.

The MAC’s report concluded that there will already be sufficient labour in the UK from the 3.2 million European nationals that have already applied to remain in the UK under the European Settlement Scheme, as well as from non-EU citizens who enter the UK as dependants of skilled workers.

This will, however, cause concern for employers within the care, construction and hospitality sectors that rely heavily on the free-flow of labour from Europe.