The introduction of a points-based system for foreigners coming to work in the UK means added costs and responsibilities for employers. Jonathan Goldsworthy, an associate at international law firm Bird & Bird, reveals how the changes will affect companies which employ foreign nationals.

The introduction of a points-based system for foreigners coming to work in the UK means added costs and responsibilities for employers. Jonathan Goldsworthy, an associate at international law firm Bird & Bird, reveals how the changes will affect companies which employ foreign nationals.

The migration reforms currently being rolled out arguably represent the largest single overhaul of the UK’s immigration system since the Immigration Act of 1971. Around 80 routes of entry into the UK, including work permits, are being replaced by a five-tier system using points-based criteria.

The first tier covers highly skilled individuals who the Border and Immigration Agency (BIA) believes will be best placed to contribute to the UK’s growth and productivity.

Tier two is for skilled workers who have an offer of employment from a UK company. It will replace the current work permit scheme and is expected to go live during the third quarter of 2008.

Further details have not yet been released, but we do know that in addition to their offer of employment individuals will need to gain points based on qualifications, prospective salary and evidence that the company has been unable to source the position through the European labour market.

Tiers three to five cover low-skilled workers, students and temporary workers, and are less likely to be relevant to businesses.

Gaining sponsor status
Any employer wishing to employ migrant workers who qualify under tiers two to five will need to register with BIA as a sponsor. This involves providing documentation including audited accounts and will cost £1,000 for businesses with more than 50 employees.

Sponsorship gives companies the right to employ qualifying migrants, but they will be subject to greater responsibilities in return. These will include keeping more detailed records and reporting to the BIA if migrants do not turn up for work. Sponsor companies can also expect to receive audits from the BIA to ensure they are meeting their obligations.

If companies do not comply with the new measures, they could face civil or criminal penalties. These may include fines of up to £10,000 for each unauthorised worker (an increase from the previous maximum of £5,000).

It remains to be seen whether the points-based system will represent an improvement over the current system, which has in many respects served UK businesses well. Only time will tell if concerns relating to the inflexibility of a points-based system and the increased obligations on employers are justified.

What is clear is that UK businesses need to be prepared for the changes in order to avoid delays in hiring or transferring non-European staff and incurring penalties, the knock-on costs of which could have serious implications on their ability to employ migrant workers in future.