We recently shared five steps employers should take to prepare for the new "points-based" immigration system. That was a high-level overview, but since then, on 22 October the Home Office published its proposed changes to the immigration rules, running to more than 500 pages.

Many of the rules have been rewritten as part of its simplification project, using a separate appendix for each visa route or for the detail of visa conditions such as English language or maintenance. Most of the changes commence from 1 December 2020, with the new Hong Kong visa route for British National (Overseas) status open from 31 January 2021.

Although there are new rules for those with BN(O) status and their households, for Swiss resident workers as well as drafting changes to many of the other visa categories, we've focused here on the detail of the changes that will affect UK employers using or considering the sponsored work visa routes.

Overview

As general points across all routes, and considering that the new rules apply equally to non-Irish European and non-European citizens needing visa status:

• Applicants from the European Economic Area (EEA) and Switzerland will be able to apply for entry clearance outside the UK using the UK Immigration: ID Check app if they have a passport with a biometric chip. This will avoid the need to attend a biometric appointment at a visa application centre. Non-EEA applicants will need to continue to attend appointments in person.
• As part of the relaxation of the rules, many more applications will be able to be filed from inside the UK. So, unless the applicant is a visitor, or has permission in certain short-term categories or outside the immigration rules, they will be able to apply in the UK. That's great news for many applicants. For example anyone in the UK holding a dependant partner, youth mobility or Tier 2 ICT visa, will avoid the considerable cost and inconvenience of having to travel back to their home country for several weeks for visa processing.
• As is already the case for non-EEA applicants, evidence of English language is required as a condition of some visa applications. For example, Skilled Workers, Sole Representatives and Global Talent applicants will have to prove this, but not ICT applicants. Malta has been added to the list of majority English speaking countries, giving an exemption to Maltese nationals and to those that studied a bachelor’s degree or higher in English there. There’s also a welcome new concession allowing applicants for Skilled Worker, Start-up, Innovator or Student visas (only) to meet the English language requirement if they have a GCSE, A-Level or equivalent Scottish qualification in English language or English literature awarded by a UK school or awarding body while they were under 18.

Skilled Worker

The Skilled Worker route is a rebrand of Tier 2 General and will be the UK’s main sponsored work visa route. It requires the UK employer to hold a sponsor licence granted by the Home Office, so it can sponsor a work visa tied to skilled employment with the sponsoring organisation. Existing Tier 2 General licences will be converted to a Skilled Worker licence and existing Tier 2 General visas will continue to be valid until they are extended or holders apply for settlement as a Skilled Worker.

Businesses that are not already sponsors will need to apply for a sponsor licence to be able to sponsor visas for non-British and non-Irish citizens moving to the UK to work from January 2021.

In several areas, the sponsorship rules have been relaxed compared to Tier 2:

• Employers will be relieved to see the end of the Resident Labour Market Test (RLMT), which has been scrapped. There will be no more need for employers to demonstrate their advertising process and that there are no suitably qualified local settled workers for the role. They may still need to prove the role is genuine and that the applicant has the appropriate attributes to do the job and the decision maker can ask for "additional information" when reaching their decision. We’ll need to wait for further details of what this means.
• The 12-month cooling off period has been removed, meaning Tier 2 ICT holders can switch into a Skilled Worker visa from inside the UK at any time, for their existing sponsor or a new employer. They can apply in the UK without having to serve a cooling-off period outside the UK, holding a high-earner job offer, and the employer having to conduct the RLMT (advertising).
• The cap/quota on overseas applications has been suspended, removing one potential refusal risk, especially for roles that are not shortage occupation and that have a salary close to the minimum required. But the new rules now say that in overseas entry clearance applications the certificate of sponsorship (COS) must have been "allocated by the Home Office to the sponsor for the specific job and salary details shown". This suggests that rather than being able to use the available pool of COS in the SMS, sponsors may still have to use the restricted COS process, but without monthly deadlines or quotas. We’ll need to wait for further details, and of course the cap could still be reintroduced later.
• The six-year limit on visa duration has been removed so sponsored workers in this route can keep extending indefinitely, if they don’t apply for settlement (previously called "Indefinite Leave to Remain") after five years' continuous stay.
• The minimum skill level for UK sponsored roles has been reduced from graduate level (RQF level 6) to also include roles at A-level equivalent (RQF level 3). Qualifying roles will be listed in "Appendix Skilled Occupations". Sponsors for Skilled Worker and ICT visas must choose the most appropriate occupation code (known currently as a "SOC Code"). Government decision makers can assess whether the sponsor has shown a genuine need for the job, whether the applicant has the appropriate skills, qualifications and experience needed for the job, the sponsor’s history of compliance with the immigration system – including whether it has paid its sponsored workers appropriately – and any additional information from the sponsor. We will need to see the policy guidance to understand whether applicants need to disclose more supporting evidence than they do currently, but strict compliance with sponsor duties will continue to be essential for all sponsors.
• The minimum baseline annual salary has been reduced from £30,000 to £25,600. As is currently the case, if the going rate for the specific job is higher, the sponsor must pay that higher amount. But under the new tradeable points system, in some circumstances minimum salary can be reduced. For example, if the role is on the shortage occupation list (SOL), minimum salary drops to the higher of £20,480 and 80% of the going rate, or to 70% of going rate for a "new entrant", which includes applicants aged under 26 or a UK graduate. Taking a software developer role as an example, the minimum pay for a 39-hour week will reduce from £33,300 currently to £26,640 because it's a SOL role, or as low as £23,310 for a new entrant applying for a visa of up to four years.
• The 10% shareholding limit for applicants other than those on a "high-earner" salary of at least £159,600 has been removed. As the RLMT won't be required and the visa cap/quota has been suspended, there is no longer any need for a high-earner threshold, at least while the cap is not operational.

As well as these welcome concessions for employers, there are also more restrictive changes to the rules that sponsors must take account of:

• "Salary" means guaranteed gross basic salary only. As a change to the Tier 2 rules, guaranteed allowances or bonuses cannot be counted towards minimum salary, and salary for visa purposes cannot include any fluctuating pay, benefits-in-kind, joining or guaranteed bonuses, payment of visa or relocation costs, or pension contributions. As a transitional arrangement, Tier 2 General visa holders can also rely on guaranteed allowances (only) in Skilled Worker applications to extend or settle made before 1 December 2026, as long as the applicant is sponsored by the same sponsor and the allowances would be paid to a local settled worker in similar circumstances.
• For the first time, a COS will need to include PAYE details for those paid through PAYE; the same will apply for ICT applicants too. We will need to wait for guidance on how to demonstrate this.
• As part of a "genuineness" test for Skilled Worker and ICT applicants, Home Office decision makers must not have reasonable grounds to believe the sponsored job is fake (does not exist), is a sham or has been created mainly so the applicant can apply for visa permission. Whether applicants must disclose extra evidence or only provide this if decision makers have concerns remains to be seen.

Intra-Company Transfers (ICT)

"ICT" is the rebrand from Tier 2 ICT. As with Skilled Worker, any existing Tier 2 ICT licences will be converted automatically to an ICT licence, and Tier 2 ICT visa holders can extend in ICT up to the relevant capped period. Employers that have held a licence for some time may not have included EU offices or newly opened or acquired entities in the scope of their ICT licence, so should review now if they should be added.

Companies applying for a licence for the first time that are part of an international group structure should apply in ICT too, to give maximum flexibility. Employees of an overseas entity can only qualify for an ICT visa if the overseas office is approved as a linked entity on the licence.

• The salary and skill level concessions in Skilled Worker have not tracked through to ICT. Minimum salary will remain at the higher of £41,500 or the going rate for the job (no discounts), and minimum skill level with remain at RQF level 6, which is graduate level. Minimum salary for Graduate Trainees is the higher of £23,000 and 70% of the going rate for the role.
• The ICT cooling-off period has been removed. Anyone in Tier 2 ICT or ICT can switch into Skilled Worker inside the UK without needing a salary above £159,600 and without the employer first having to advertise. Moving into Skilled Worker will enable the applicant to start the clock running on the five-year qualifying period for settlement.
• The “high-earner” salary level for ICT has been retained but reduced from £120,000 to £73,900. High-earners do not need 12 months’ service overseas and can remain in ICT for longer as set out below. For applicants that are not high-earners the 12 months service outside the UK can be interrupted by time spent in the UK as long as the applicant has remained employed by the sponsoring group throughout. 
• Applicants will not be granted permission beyond five years in total (ICT or Tier 2 ICT) in any six-year period. High-earners can stay in ICT for nine years in any 10-year period.
• The Graduate Trainee route will remain available for applicants that have worked overseas for a linked entity for three months or more. For the UK job to qualify, it must be part of a structured graduate training programme, "with clearly defined progression towards a managerial or specialist role within the sponsor organisation". Sponsors can assign up to 20 Graduate Trainee COS in each year starting on 6 April.
• Sponsors of ICT visas have the same restrictions on what can be treated as salary as Skilled Workers, except that guaranteed allowances such as London weighting or cost of living adjustments can be included. Allowances that are solely for accommodation will only be considered up to 30% of the total salary package, or 40% for Graduate Trainees.

Now that the RLMT and the visa cap have been removed from Skilled Worker applications, what is the benefit of applying for an ICT visa? As well as having a Graduate Trainee option with a lower salary threshold, the main advantage is exemption from meeting any English language requirement (and possibly exemption from some form of restricted COS allocation process).

ICT is ideal for short term assignments or for urgent assignments of citizens of countries that are not majority English speaking, as the applicant can avoid the additional delay of arranging an approved English test or verification from NARIC for degrees taught in English. It is also possible to rely on guaranteed allowances as part of the minimum salary, which is not possible for Skilled Workers. Again, this is useful for short term assignments.

Find out more

To explore this further, please get in touch to discuss how the changes will affect your business, and sign up below for our upcoming webinar on 12 November 2020.

Register for our webinar