Is your business prepared for the end of free movement?

The government has set out its vision for  new immigration rules which will come into force on 1 January 2021.  We set out what these changes are, what it means for your business and how you can prepare for the end of free movement.

These changes, which come into force when free movement ends on 31 December, give employers only ten months to ensure that they are ready for post-Brexit immigration rules.

It is worth noting, however, that EU nationals can still enter the UK to work and benefit from applying to the EU pre-settled and settled status scheme up to the 31 December 2020.  As such, businesses who frequently recruit from the EU - especially jobs that the government class as low-skilled - will need to ensure that they have planned ahead. The government has confirmed that there will be no separate immigration route for low-skilled workers and as such employers should recruit from the UK in these roles where they can.

A points-based system

Under the proposals, the current Tier 2 system will be extended to include roles at RQF 3 (A-level equivalent) rather than the current RQF 6 (Graduate Level), PhD roles and shortage occupation roles. The current annual quota is 20,700. Under these plans, EU and non-EU nationals will be able to come to the UK and work in these roles if they have a job offer from a sponsor approved by the UKVI and are paid a certain salary.

Migrants will be required to score 70 points for having a job offer with a sponsor, at an appropriate skill level being paid a certain salary and speaking English to a certain level. While a total of 70 points is required to be eligible to apply, some characteristics can be traded. For example, a university researcher in a science, technology, engineering, and mathematics subject wishing to come to the UK on a salary of £22,000 (which is below the general minimum salary threshold), may still be able to enter the UK if they have a relevant PhD in one of these subjects. Likewise, a nurse wishing to come to the UK on a salary of £22,000 would still be able to enter the UK on the basis that the individual would be working in a shortage occupation, provided it continues to be designated as shortage by the Migration Advisory Committee which will keep the list and the list of other sponsored jobs under constant review.

Low skilled workers

It had been thought that the government would introduce a temporary low skilled worker route so that businesses who rely heavily on low skilled workers from Europe would have time to adjust to the lack of free movement.  However, this has not been the case. The government has been very clear in their policy that businesses will need to adapt quickly by recruiting UK nationals or those EU nationals currently in the UK by increasing salaries or alternatively invest in technology or automation.

This will come as a blow to certain businesses - mainly within the care, retail, construction and hospitality industries. While certain roles in these sectors will fall under the RQF 3 skills level many will not. This leaves businesses in a very uncertain position. In addition, even if the role can be sponsored, those who do not already hold sponsor licences will need to apply for one.

There is a welcome extension of the current Seasonal Agricultural Workers Scheme (SAWS) to 10,000 places.  Whether or not this is sufficient remains to be seen.

Migrants without a job offer

The government recognises certain individuals as being leaders in their field or having exceptional talent in certain sectors. Therefore, its intention is to create a broader, unsponsored route within the points-based system to run alongside the Tier 2 scheme. This will allow a smaller number of the most highly-skilled workers to come to the UK without a job offer. They have at this stage not announced any particular details.

Impact on business

The impact of these proposals on businesses will be huge. Since the referendum, businesses have felt the impact of the fall in net migration from Europe. These proposals confirm some of the previous fears about a further reduction in the talent pool, and a reduced ability to retain workers.

We would recommend that businesses assess now how many EU nationals are currently working for them – to reach out to  retain them, offering a level of security wherever possible We further recommend that over these next nine to 10 months, businesses continue to recruit from Europe as they have been doing so previously. EU nationals arriving up to 31 December 2020 can benefit from EU pre-settled and settled status schemes. Finally, and most importantly, businesses must now begin preparing for the end of free movement. Businesses must assess how many roles they currently recruit skilled workers (under the proposed new definition) and low skilled workers into. If many of the roles fall into the new points-based route businesses must start taking action to apply for a UKVI sponsor licence.

Silver linings

Some businesses will welcome parts of the new policy. The annual quota for Tier 2 roles will be abolished as will the rather onerous resident labour market test, which means that more jobs will be available for sponsorship.

However, unfortunately for many, the new rules will bring worry and uncertainty plus an increased administrative burden.