Introduces the current points-based system for economic migration focusing on the Tier 2 route for non-EU migrants
Many employers value workers from overseas due to the knowledge and skills they can contribute to the organisation. HR professionals have an important role to play in recruiting migrant workers as they are responsible for carrying out the necessary checks and making sure the law is followed.
This factsheet looks at categories of foreign nationals in terms of their freedom to enter and work in the UK. It outlines the legal framework and highlights the risks of employing people illegally. It also explores the particular issues and responsibilities employers currently need to be aware of when employing workers from outside the European Economic Area (EEA), and provides links to government guidance on the employer's role during the checking process.
There’s considerable value to organisations in employing workers from overseas. This approach opens up a useful source of information and knowledge which can be beneficial to the creativity, innovation and productivity levels of an organisation. For multi-national organisations, employing overseas workers is a crucial part of being part of overseas communities. Employers looking to hire workers from inside the EU must respond now to the prospect of migration restrictions or face the consequences of recruitment difficulties in the future.
HR professionals have an important role to play in this process: it’s crucial they ensure the organisation adheres to the relevant law, and carries out the required checks. It’s particularly important for HR professionals to keep abreast of the regular changes to immigration policy that continue to make the channel for employing non-EEA workers more restrictive. It’s also important to ensure that attention is paid to the induction and orientation of the overseas worker to allow that individual to become an effective part of the organisation.
Reasons for employing workers from overseas
Organisations may choose to employ overseas workers for various reasons:
- To perform jobs requiring specialist skills (for example, technical or language skills) that are not available in the UK.
- To fill vacancies for highly-skilled jobs which the government agrees are in designated ‘shortage occupations’.
- To facilitate secondments or transfers from an overseas division, for example for developmental assignments that will also introduce new ideas into the UK organisation. This is sometimes referred to as an intra-company transfer.
- To fill temporary vacancies requiring a pre-existing skill set
- To fill unskilled or low-skilled vacancies due to labour shortages.
The UK’s decision to leave the European Union
In June 2016, the UK voted to leave the European Union. Article 50 of the Lisbon Treaty was triggered on 29 March 2017 and set in motion the formal processes, so unless otherwise agreed under the provisions of the article, the UK’s membership of the EU will end on 29 March 2019.
The timing of the introduction of migration restrictions on non-UK nationals from the European Economic Area (EEA) will be subject to the outcome of the negotiations between the UK Government and the European Union. However, the first hints at what a post-Brexit EU immigration system may look like will be contained in the government’s forthcoming consultation paper. In the meantime, the Home Office has asked the Migration Advisory Committee (MAC) to conduct a wide-ranging investigation into how the UK’s immigration system should be aligned with a modern industrial strategy to help inform the consultation paper.
Our report Facing the future: tackling post-Brexit labour and skills shortages analyses employers’ perspectives and finds that the prospect of future migration restrictions is giving rise to a range of practical concerns for many UK employers that may be eased by a flexible immigration system for EEA nationals that would like to come to the UK to live and work.
Our Legal guide to managing a migrant workforce gives practical steps to help employers manage and support their migrant workforce through Brexit. There're more resources and comments in our Brexit hub.
The legal framework
Those entitled to work in the UK
Currently, there are several broad categories of overseas nationals that can enter the UK to live and work:
- Those who are free to enter, remain and work in the UK with minimal restriction on their length of stay or ability to change employment. These include all EU nationals and those from Switzerland, Norway, Iceland and Lichtenstein who have been granted indefinite leave to remain or have a Right of Abode in the UK.
- Those with greater, but still limited, restrictions on their ability to enter and work in the UK, including Commonwealth nationals with UK ancestry and dependants of British citizens.
- Those admitted to the UK with temporary permission as students or participants in short-term employment including exchange schemes, or for training or work experience.
- Those admitted to work in the UK in certain sectors on a ‘permit free’ basis, but still requiring specific and time-limited permission.
- Those requiring full employment-based permission to work in the UK.
All overseas nationals must comply with the entry requirements of the various immigration Acts and Regulations.
The points-based system for nationals from outside the European Economic Area
The main route for migrants from outside the European Economic Area (EEA) is the government’s five tier points-based system. It has been in place since 2008 to assess non-UK nationals from outside the EEA that want to come to work in the UK. The criteria are adjusted regularly, so it’s essential to check the latest information (see Useful contacts).
The tiers are:
- Tier 1 - Highly-skilled individuals, entrepreneurs and high net-worth individuals (not requiring a sponsor).
- Tier 2 - Skilled workers with a job offer.
- Tier 3 - Low skilled workers for temporary labour shortages (although this Tier has never been used because of the strong labour supply from European countries).
- Tier 4 - Students.
- Tier 5 - Youth mobility and temporary workers: people allowed to work in the UK for a limited period of time to satisfy primarily non-economic objectives. The scheme is restricted to several countries and is dominated by Commonwealth countries such as Australia and New Zealand, and Japan.
Migrant workers are required to score a certain number of points to obtain permission to enter, or remain, in the UK and the points criteria differ for each tier. Since the launch of the new system, significant changes have been made to the management and points table of Tiers 1 and 2.
Sponsorship by an employer is essential for Tiers 2 and 5. Sponsorship by an appropriately registered academic institution is essential for students with Tier 4 visas.
Under Tier 2, only employers registered with and licensed by the Home Office are permitted to issue a Certificate of Sponsorship (CoS) to a named individual, who must then apply for permission to enter the UK. The employer must have undertaken a strict verification exercise in order to issue a CoS.The government has made changes to the immigration system in recent years, including setting a ‘cap’ on immigration. CIPD members can see more in our immigration law changes factsheet.
Employers’ responsibilities for avoiding illegal employment
It's a criminal offence to knowingly employ a person who requires but lacks immigration permission, to be in that role. There is a maximum prison sentence of two years and an unlimited fine for employers caught in breach. In practice, this is aimed at employers who deliberately flout the law in order to exploit vulnerable employees and undercut legal competitors. The merely careless or negligent will generally be dealt with through a civil penalty.
Employers have to check and copy specific original documentation tor any new employees. The government's guidance for employers on preventing illegal working sets out when checks must be made, what employers need to do including tips on how to check authenticity and what to photocopy and retain. Checks must be completed before employment begins, but re-checking is also required for employees with time-limited immigration status.
Any checks that are made should be done in a non-discriminatory manner in accordance with government guidance on avoiding unlawful discrimination while seeking to prevent illegal working which recommends that all job applicants should be treated in the same way.
Read our pre-employment checks factsheet.
Recruiting overseas workers
Organisations which have divisions overseas should find that their HR function in these operations will be able to help with recruitment. Otherwise, it may be advisable to use an outside agency which has experience abroad. If the employer is a Tier 2 licensed sponsor and there is a serious prospect that a UK resident or EU candidate cannot be found for the role, recruitment should be conducted so as to satisfy the Resident Labour Market Test (RLMT).
Employers should consider the use of the internet in recruitment, particularly in the early stages, as it is an inexpensive way of reaching overseas workers and can save a lot of time.
After an initial sift it's likely to be appropriate to carry out face to face interviews, in the home country or UK. When interviewing, care must be taken to avoid discrimination. The government guidance gives advice.
Information comparing qualifications in different countries can be obtained from the National Recognition Information Centre for the United Kingdom (UK NARIC).
Contracts will vary depending on whether the assignment is temporary or permanent. For short secondments, it is often easier for the employee to retain home country pay and benefits, topped up by an allowance. Items to consider are:
- expected duration of assignment
- termination during an assignment and the period of notice at end of an assignment
- details of pay, including (for secondments) who pays and in what currency
- other financial benefits such as relocation costs and pension contributions
- taxes and social security payments
- applicable law during assignment; for example foreign nationals employed in the UK have the same statutory employment rights as their British counterparts but may also be subject to the mandatory employment laws of the home country
- having a dual contract for employees who divide their working time between the UK and another country.
Read our secondment factsheet.
In general, pay and conditions for overseas workers should be the same as those for UK employees doing the same job. The terms of employment must be in accordance with UK legislation including the national minimum wage and working time regulations. Tier 2 visa holders should also be paid the minimum salary for their visa or job; in practice this normally means £30,000 for Tier 2 General and £41,500 for Tier 2 Intra Company Transfer. For secondments, the employees will continue to be paid by their original employer at their normal salary.
Tax rules are complex and depend on the length of stay, the personal circumstances and whether the UK has any reciprocal arrangement with the worker’s country of origin. Employers should seek expert advice on these issues before drawing up a contract with an overseas worker.
The benefits package must include a fair relocation deal. This should include payments for:
- travel costs for the employee and family
- temporary accommodation at the start of the assignment
- cost of shipping possessions
- return trips to the home country (as agreed in the contract).
Sometimes the rest of the dependant family may choose to remain in the home country which means that the overseas worker is likely to want to make more trips home.
Apart from financial help with relocation, practical help should be given in finding accommodation and with practical tasks such as obtaining a driving licence and credit cards.
Find out more in our international mobility factsheet.
A new overseas worker should follow the same induction programme as any other employee. Find out more in our induction factsheet.
However, it may be necessary to supplement this with additional orientation sessions offering a basic understanding not only of UK employment but also of UK society in general.
Organisations which regularly employ overseas workers from a particular country (for example a Japanese company in the UK seconding employees from Japan), are likely to have an informal network of expatriate staff who can make a new family feel welcome and provide advice based on personal experience.
Where such a network does not exist, the use of a co-worker as a ‘buddy’ may be helpful. Preferably this co-worker should have a similar domestic situation to the new employee and so be able to give practical advice on the day-to-day issues facing the entire family.
Managers should be trained so that they can communicate effectively with people from other cultures and be sensitive to different communication styles and attitudes to work. It's particularly important to recognise that ideas vary from one culture to another. For example, some place greater emphasis on consensus and collaboration whereas others value clear direction from strong leadership in a strict hierarchy; some encourage honesty, even open criticism, whereas others would prefer more diplomacy and conciliation with no show of strong feelings.
It's possible to build effective teams by having a clear framework that does not ignore cultural differences but encourages communication and ensures that everyone understands the common goals.
Read our factsheet on cultural difference.
A new English language requirement has been introduced for public sector workers in public-facing roles. However, employers should be aware that insisting all staff speak English all the time could amount to indirect race discrimination. However, in some circumstances a requirement to speak English might be a proportionate means of achieving a legitimate aim which would mean that it's not a discriminatory policy. An example might be where staff are dealing with customers, such as on a reception desk. There's more advice on writing a policy that meets the employer’s needs and is not directly discriminatory in our report The state of migration: employing migrant workers.
Useful contacts and further reading
Sponsorship and Employers' Helpline Tel: +44 (0) 300 123 4699 (provides guidance and advice on the prevention of illegal working)
DEPARTMENT FOR BUSINESS, INNOVATION AND SKILLS. (2015) The impacts of migrant workers on UK businesses. London: BIS.
ABBISS, G. and CAMERON, J. (2017) Employing foreign staff in the UK. Employers’ Law. March. pp18-19.
Challenging the myths around migrant workers. (2014) Labour Research. Vol 103, No 7, July. pp17-18.
FLYNN, D. (2013) Do migrants cause low wages and joblessness? Labour Research. Vol 102, No 4, April. pp13,15.
RAZEEN, N. (2015) The perils for employers who employ illegal workers. Tolley's Employment Law Newsletter. Vol 20, No 6, April. pp46-47.
CIPD members can use our online journals to find articles from over 300 journal titles relevant to HR.
Members and People Management subscribers can see articles on the People Management website.
This factsheet was last updated by Gerwyn Davies.
Gerwyn Davies: Labour Market Adviser
Gerwyn is the CIPD’s Public Policy Adviser for a wide range of labour market issues. With lead responsibility for welfare reform, migration and zero-hour contracts at the CIPD, Gerwyn has led and shaped the policy debate and achieved substantial national media coverage through various publications. These include Zero-hours contracts: myth and reality (2013) and The growth of EU labour: assessing the impact on the UK labour market (2014).
In addition Gerwyn authors the CIPD's high profile and influential quarterly Labour Market Outlook. Gerwyn is an experienced labour market commentator, making regular appearances in the national media and on other public platforms, including several appearances before the House of Commons Work and Pensions select committee.
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