The new points based system and sponsorship regime

Topic: Immigration

Who: UK Border Agency/Home office

Where: UK

When: August 2008

Law stated as at: 31 August 2008

Why this matters:

Important changes to the UK’s immigration rules – the points based system and sponsorship

The UK’s immigration rules are in the process of being radically overhauled by the Home Office.  Out go over 80 existing previous or existing routes to work and study in the United Kingdom and in comes a five tiered “points based system”.  Also new is a system of sponsorship whereby employers must be registered as licensed sponsors before they can employ migrant workers from outside the European Economic Area (EEA) and Switzerland who would previously have required a work permit.

The five-tiered points based system

Under the new system, migrant workers will need to pass a points threshold before they are given permission to enter or remain in the UK and each tier will have different points requirements.  The five tiers are:

• Tier 1 – highly skilled workers, for example those individuals who would previously have applied for a Highly Skilled Migrant Programme (HSMP) visa;
• Tier 2 – skilled workers with a job offer, for example those individuals for whom their employer would previously have applied for a work permit;
• Tier 3 – low skilled workers filling specific temporary labour shortages, for example construction workers for a particular project;
• Tier 4 – students;
• Tier 5 – youth mobility and temporary workers.

Employers will typically only be interested in Tiers 1 , 2 and 5 since the Home Office has decided to suspend Tier 3 due to the availability of labour from the newest EU member states. Tier 1 is already fully operational but, since the HSMP visa category it replaced was also a points based assessment, the changes are not far-reaching.  Tiers 2 and 5 are expected to go live at the end of November.

Tier 2 – the new work permit system

Under the current work permit system employers make an application to the UK Border Agency (UKBA).  Assuming the application is successful, UKBA issues a hard copy work permit to the employer. 

Tier 2 of the points based system will see the onus shift away from UKBA and to employers, who will have the facility to self-certify work permits.  No longer will work permit applications be made to UKBA.  Instead, an employer will be required to make its own assessment as to whether the prospective worker meets the relevant points threshold.  If he does, the employer will then issue to the individual a certificate of sponsorship, which is no more than a reference number which the individual will then quote when applying for entry clearance overseas or further leave to remain in the UK. 

As with the current work permit system, Tier 2 will have distinct sub categories for employees who are transferring between group companies and those individuals who are new hires.

Employers must be registered sponsors

Before a certificate of sponsorship can be issued under Tiers 2 and 5 the employer must register as a sponsor.  The appliation process can be broken down into three steps:

1. An online application for which there is a fee of £1,000 or £300 for small employers.
2. The submission of various supporting documentation about the employer and its HR systems within 10 days thereafter. Rather than miss this deadline, employers would be well advised to ensue that all the supporting evidence is prepared before submitting the online application.
3. The possibility of a site visit by officials from UKBA who will check the validity of the information submitted, interview key personnel and attempt to satisfy themselves that the employer has the HR systems in place to keep track of its migrant workers and comply with the monitoring and reporting obligations (see below).

Before applying, employers should spend some time considering their likely needs for migrant workers and their own circumstances, since there are some important factors to consider when applying to be a sponsor.  For example:

• It is possible for an employer with several offices, locations or branches to register each as a separate sponsor or to register the head office as a single sponsor covering the group.  Large employers will want to strike a balance between having centralised control over the recruitment of migrant workers in compliance with the rules and running the risk of the entire group’s sponsorship status being adversely affected by non-compliance at a single outpost.
• UK based personnel must be nominated for the official posts of authorising officer, level 1 and 2 users and key contact.  These positions can be held by just one person or by a number of individuals.  Level 1 and 2 users will have access to the sponsorship management system, with the level 1 user responsible for setting up accounts and permissions for those staff members accessing the system.  The authorising officer will have responsibility for the staff using that system and identifying who can access it and what they can do within it.  The key contact is the point of contact between the UKBA and the employer.   

Each sponsor will be given a rating, "A" or "B", dependent upon the scores allocated by UKBA in relation to its human resource systems, suitability of the nominated key personnel and any any previous non-compliance with immigration law.  Employers will want to attain an “A” rating at the first attempt since a “B” rating will require the employer to comply with a UKBA-imposed action plan intended to transition the employer up to an “A” rating.  However, failure to improve and achieve an “A” rating could result in the withdrawal of the employer’s sponsor status.

The UKBA is currently recommending that employers make their sponsorship applications by October 2008 if they would like to be able to issue certificates of sponsorship when Tiers 2 and 5 are launched towards the end of November.

The sponsor’s monitoring and reporting obligations

As befits a self-certification system, self-regulation and administration will play important roles.  The employer’s duties and obligations will not end when the licence is issued and it issues the certificates of sponsorship.  On the contrary, that is only the beginning of the employer’s work.  It must record a copy of, and update as necessary, the employed migrant's identity documentation and contact details.  There are also reporting requirements upon the employer including notification where the migrant fails to report for work, if the migrant worker’s details change, upon termination of employment and a general obligation to co-operate with UKBA as and when required.

The penalties for illegally employing a migrant worker or non-compliance.

Whilst the apparent freedom of a self-certification scheme was initially welcomed with open arms by employers, as the details of the scheme have become known it is clear that this is a double edged sword for employers.  The onerous monitoring and reporting conditions and the risks of incorrectly issuing a certificate of sponsorship when the immigration conditions are not actually met have sharply focussed the minds of directors and HR managers, particularly in light of the new civil and criminal penalities for illegally employing migrant workers which were introduced in February of this year.

Whilst the employer may see its sponsorship licence downgraded or even revoked for failing to properly comply with its obligations, the UKBA can issue on-the-spot fines of up to £10,000 per illegal worker and will publish details of any offending employer on its website for public inspection.  Furthermore, the employer’s key individuals could face criminal penalties including imprisonment for up to two years and/or an unlimited fine for knowingly illegally employing a migrant worker. 

Why this matters:

The new system should make for a more streamlined process for UK marketing agencies working to bring in talent from outside Europe, both as agency staff and as talent for ad shoots.  But agencies and their directors need to be alert to the significant risks they face if the self-certificate scheme is abused or the various obligations are not complied with.