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Employing Foreign Nationals

Immigration law now plays an increasingly important part of the recruitment process in the UK. An employer's ability to recruit key personnel from outside the UK within given time frames is a crucial factor in a business' continued success. Those dealing with recruitment should therefore have an appreciation of immigration law so that they are able to assess how realistic it will be to employ migrants and importantly, how to avoid civil and criminal penalties when doing so.

To avoid civil and criminal liabilities, an employer must firstly understand who can and cannot work in the UK without permission. Subject to a small number of exceptions, unless the migrant is a national of Switzerland or a country within the European Economic Area, he or she cannot work in the UK without obtaining permission from the Home Office.

When determining whether to grant permission, the Home Office applies a tiered Points-Based System (PBS). There are five tiers of entry to the UK under the PBS:

  • Tier 1: high-value migrants.
  • Tier 2: highly skilled migrants.
  • Tier 3: low skilled workers (currently not operational).
  • Tier 4: students.
  • Tier 5: temporary workers.

Tier 1: High-value migrants

Tier 1 of the PBS is intended to provide a route of entry into the UK for the most talented people across the world and those with significant funds who wish to invest in businesses in the UK. To reflect this, permission under this tier belongs to the individual and provides them (and in most cases their dependants) with the right to live and work in the UK with no or limited restrictions.

Within Tier 1 there are four subcategories: exceptional talent, entrepreneur, investor and graduate entrepreneur.

Given the nature of the subcategories in Tier 1, most employers will not be involved in employing migrants who hold permission to work in the UK under the entrepreneur, investor or graduate entrepreneur sub-categories.  Some employers in the arts, technology, medicine, science, engineering and humanities may come across Tier 1 exceptional talent visas. There are two further Tier 1 categories which are now closed.  Tier 1 post study work was closed in April 2012.  It permitted migrant students to remain in the UK for two years after graduation to find skilled work.  Tier 1 general was closed to new applicants in 2011 and closed to extension applicants in April 2015.  Employers who are presented with visas in either of these Tier 1 subcategories should be wary and check the dates and visas carefully.  

Tier 2: Highly skilled migrants

Most migrants targeted by employers will be defined by the Home Office as 'skilled workers.'  Tier 2 of the PBS sets out the rules and requirements which skilled workers must meet.  The majority of skilled workers can be split into two further sub-categories: Tier 2 (General) or Tier 2 (Intra-company transfer). The Tier 2 (General) category is for migrants who have been offered a skilled job to fill a gap in the workforce that cannot be filled by a worker already settled in the UK. The Tier 2 (Intra company transfer) category is for employees of multinational companies who are being transferred by their overseas employer to a UK branch of the organisation, either on a long-term basis or for frequent short visits.

Tier 2 (General) or Tier 2 (Intra-company transfer) workers must be sponsored by an employer in the UK before they can apply to work in the UK.  As a result, an employer must obtain a sponsor licence from the Home Office if it wishes to recruit such workers.

Becoming a sponsor

An employer must register with the Home Office and submit an online application form to obtain a sponsor licence. Using the application form an employer must satisfy the Home Office that it:

  • is a genuine employer based and operating lawfully in the UK;
  • is able to comply with employment and immigration law and good practice and has not previously failed to comply;
  • can provide original or certified copies of the documents required to support its application; and 
  • is prepared to agree to comply with certain obligations.

The Home Office uses a scoring system to assess applications. The Home Office will grant an employer a licence as an A-rated sponsor if the employer: can show that it uses tight human resources systems; does not have any civil penalties or criminal convictions against its organisation or its key staff; and is not found to be non-compliant for any other reason. Any employers whose scores are not satisfactory will be granted a lower B-rating or may not be granted a licence at all.

An employer should therefore carry out an internal audit to satisfy itself that it is eligible for a sponsor licence and to become an A-rated sponsor. This includes being able to nominate existing employees with key responsibilities for the sponsor licence and checking to ensure that they do not have any unspent criminal convictions.

Sponsoring skilled workers

An employer can begin to sponsor migrants once it has been granted a sponsor licence and provided it has ensured that both the migrant and the position which the migrant is to occupy meet a number of requirements. An employer must ensure that:

The migrant:

  • meets the English language (if applicable) and maintenance requirements;
  • can provide all documents required; and 
  • does not have any adverse immigration history that could lead to a refusal of their application to enter and remain in the UK;

The position which the migrant is to occupy meets:

  • the requirements on the skill level of the position; and
  • the appropriate rate of pay for the position.

If those requirements are satisfied and the appointment is a Tier 2 (Intra-company transfer), an employer can make an application for a certificate of sponsorship without having to satisfy any other criteria. 

If the appointment is under a Tier 2 (General) certificate, the employer will, in most circumstances, firstly need to conduct a 'resident labour market test' (RLMT). The RLMT is usually not required if the position is on the 'shortage occupation list' (but this is not the case for all roles on the list). To pass the RLMT, the employer must advertise the role in accordance with the code of practice relevant to the occupation which sets out where an advert can be placed and what types of recruitment are appropriate. This takes a minimum of 28 days.  The shortage occupation list is maintained by the Home Office and is limited to a small number of occupations with a high demand and low supply of workers in the UK. 

If the employer is exempt from or, alternatively, once the employer has satisfied the RLMT, an application can be made for the migrant's certificate of sponsorship. The Home Office restricts the number of certificates which it issues and the frequency of their issue so will prioritise the employer's application depending upon the role and salary offered to the migrant.

Sponsorship duties

As a sponsor, an employer must meet certain duties to ensure that immigration controls remain effective, including:

  • keeping records for every sponsored migrant which include up to date contact details;
  • reporting to the Home Office within strict time limits on matters such as the sponsored migrant's absenteeism or change in circumstances;
  • complying with the immigration laws and ensuring that the migrant remains legally allowed to work in the UK; and
  • fully co-operating with the Home Office.

If an employer does not meet its duties and illegally employs migrant workers it may be subjected to civil and/or criminal penalties and/or have its sponsor licence revoked.

Tier 4: Students

This route was created to provide for foreign nationals (adults, students and children) who wish to enter the UK to study.

Employers who are not in the educational sector tend to deal with Tier 4 foreign national students where those students are working part-time alongside their studies. To reduce the risk of employing students unlawfully, employers should have an understanding of their permission to remain and work and carry out the appropriate right to work checks.

Students are allowed to work full-time during vacation periods. During term time, students are permitted to work between ten and 20 hours a week depending on the course that they are undertaking. Employers should obtain specified documents evidencing the student's sponsor, course and term times.  Students will also be permitted to take part in a work placement that forms part of their course. The maximum length of the placement will be determined by the course that they are studying but should not represent more than 50% of the length of the course.

Students who have completed a course at undergraduate level (or above) may apply to switch to the Tier 2 (General) route from within the UK.

The time frame to switch in this way is relatively limited (being the period between receiving final confirmation that the student has passed his or her course and the expiry of their Tier 4 visa). This can be a helpful relaxation of the immigration rules and employers should plan ahead if they spot potential recruits who are about to finish university.

Tier 5: Temporary Workers

The purpose of this category is to attract certain temporary workers to allow them to experience the cultural and social aspects of living and working in the UK.

There are two broad categories under this route: the youth mobility scheme and temporary workers. The second category is for temporary workers in the areas of creative and sporting, charity, religion, government authorised exchanges and under international agreements.

Youth mobility scheme (YMS)

The YMS has been established between the UK and participating countries (where there are reciprocal agreements) for young people (aged between 18 and 30) who wish to visit and experience life in the UK. There are a restricted number of places each year, depending on the country of exchange. The participating countries are: Australia, Canada, New Zealand, Japan, the Republic of Korea, Hong Kong, Taiwan and Monaco.

There are certain restrictions on this category and it is not intended to provide a route to long-term employment in the UK. For example, permission is only granted for up to 24 months, there is no possibility of extension at the end of this and time spent in the UK under the YMS does not count towards settlement. The YMS only provides permission to the individual and does not enable a non-EEA foreign national to bring dependants with them to the UK.

Temporary workers 

There are a number of temporary worker categories, but two are of most relevance to employers:

1. Government authorised exchanges provide for foreign nationals to come to the UK through government approved schemes, of which there are three broad types:

  • Work experience programmes (including volunteering, job-shadowing and internships).
  • Training programmes for science and medicine.
  • Research programmes for science, medicine, academic or government research projects.

This is the only route that provides foreign nationals with the opportunity to work in the UK in order to undertake internships.

Foreign nationals in the UK under a government authorised exchange will not be permitted to switch into another tier and they will need to leave the UK at the expiry of their visa.

2. The International agreements category caters for those coming to the UK under contract to do work that is covered under international law, such as the General Agreement on Trade in Services (GATS), employees of foreign governments and international organisations and private servants working in diplomatic households.

This document has been created by, or on behalf of ESP Ltd, as a general document and as a guide in relation to its subject matter and has not been bespoke drafted for you or the specific circumstances in which you are looking to use it. Prior to using this document and undertaking any HR process you must consult your organisation’s own policies and procedures to ensure that you do not do anything in conflict with your own policies and procedures.  If in any doubt as to how to use this document or, if you require any legal advice, please feel free to contact ESP Ltd on 0333 006 2929 and our legal team will be more than happy to assist.  ESP Ltd will not be liable in any way for any actions undertaken by you or your use of this document unless we have been consulted regarding your use of this document as legal advisor to your business or have bespoke drafted any documentation in response to a specific support request.