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. People 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 non-UK 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.
Reasons for employing workers from overseas
There’s considerable value to organisations in employing workers from overseas. Key reasons include:
- Performing jobs requiring specialist skills (for example, technical or language skills) that are not available in the UK.
- Filling vacancies for highly-skilled jobs which the government agrees are in designated ‘shortage occupations’.
- Facilitating 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.
- Filling temporary vacancies requiring a pre-existing skill set
- Filling unskilled or low-skilled vacancies due to labour shortages.
People professionals have an important role to play in this process: it’s crucial they ensure the organisation complies with the relevant law and carries out the required checks.
The UK’s decision to leave the European Union
Following the UK’s departure from the European Union on 31 January 2020, a transitional period during which negotiations will decide the future UK/EU trading relationship will end on 31 December 2020. In this period, existing employment law regulations, as well as existing enforcement arrangements, continue to apply.
In February 2020, the government published a policy statement outlining the new UK points-based immigration system that will be introduced when free movement of EU workers ends on 31 December 2020. Under the new system, all applicants, both EU and non-EU, will both need a job offer from an approved sponsor at the required skill level and demonstrate that they can speak English. Applicants will also need to have 70 points from the following list to be eligible to apply. Some of these characteristics are tradeable.
- Offer of job by approved sponsor – 20 points.
- Job at appropriate skill level – 20 points.
- Speaks English at required level – 10 points.
- Salary of £20,480 (minimum) - £23,039 – 0 points.
- Salary of £23,040 - £25,999 – 10 points.
- Salary of £26, 000 or more – 20 points.
- Job in a shortage occupation – 20 points.
- Education qualification: PhD in a subject relevant to the job – 10 points.
- Education qualification: PhD in a STEM subject relevant to the job – 20 points.
The policy statement adopts many of the recommendations put forward by the Migration Advisory Committee (MAC) in January 2020, including:
- Lowering the minimum salary threshold from £30,000 to £25,600.
- Lowering the salary threshold for new entrants (30% lower than the rate for experienced workers), skill shortage occupations (£20,480) and workers with PhDs relevant to the job (£20,480).
- Bringing the skill threshold down from Regulated Qualifications Framework (RQF) Level 6 to Level 3 (in Scotland, Scottish Credit and Qualifications Framework Level 6).
- Suspending the cap on the number of migrant workers that can come to the UK.
- Removing the Resident Labour Market Test (RLMT).
- No regional immigration policy or salary threshold.
Under the new system, employers will be subject to more bureaucracy and a range of costs in recruiting all non-UK citizens from overseas. These seem likely to include a sponsorship licence, visas (which could extend to dependants of the skilled migrant) and the Immigration Skills Charge for each worker. All non-UK citizens will be subject to an Immigration Health Surcharge of £400 per year, which their employer may also feel compelled to pay, with the exception of health and care staff who will be exempt from the charge.
In July 2020, the government announced a new health and care visa which will offer a new fast-track visa route for eligible health and care professionals with a lower visa application fee.
Find more resources and comment in our Brexit hub.
The legal framework
Those currently entitled to work in the UK
The current system will apply until 31 December 2020. Under this system, there are several broad categories through which non-EEA 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 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.
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's 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 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 made should be done in a non-discriminatory manner, following 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 guidance for employers.
Recruiting overseas workers
Organisations which have divisions overseas should find that their HR teams 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 candidate cannot be found for the role, recruitment should be conducted so as to satisfy the Resident Labour Market Test (RLMT).
Employers should consider using 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, face-to-face interviews will probably be needed, either in the home country or the 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's 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.
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 line 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, £24,800 for the Tier 2 Intra Company Transfer short-term category and £41,500 for the long-term category. 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 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, employers should give practical help such as finding accommodation, 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.
However, it may be necessary to have 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 from 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 to 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.
An 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. 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 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)
Books and reports
DEPARTMENT FOR BUSINESS, INNOVATION AND SKILLS. (2015) The impacts of migrant workers on UK businesses. London: BIS.
CHURCHILL, F. (2020) Majority of UK migrant workers now non-EU citizens, figures show. People Management (online). 19 June.
FARAGHER, J. (2020) You still need to get ready for Brexit (remember Brexit?)People Management (online). 26 March.
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: Senior 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.