The New ‘Points-Based’ System for Migrants and How It Will Affect Businesses

As we entered the new year, the freedom of movement between the UK and EU ended, and a new immigration scheme has kicked in. The new rules are essentially a revision of the points-based system first introduced for non-EU migrants in 2008. Therefore, this newly revised system is said to treat EU and non-EU citizens “equally and aims to attract people who can contribute to the economy”.

Under the new rules, the main route for any immigrant looking to work in the UK is now the Skilled Worker visa. To qualify, applicants need to demonstrate that they meet a specific set of requirements for which they will score points. The basic requirements are that they have to speak English, have a job offer at the required skill level from a licensed sponsor, and meet a salary threshold of £25,600 or the going rate for their profession—whichever is higher.

So, what does this all mean for UK employers?

Unless the migrant worker has an alternative route of entry, employers will now need to sponsor workers through the Skilled Worker visa route; this means a longer recruitment process and additional expenses for businesses. Companies relying on the migrant workforce will now need to apply for a sponsor licence in order to sponsor workers. The application process can take several months and be costly. In addition to the application fee, businesses will need to pay a fee to assign a Certificate of Sponsorship to migrants and the Immigration Skills Charge per migrant for each year of sponsorship.

Some sectors have been largely relying on cheap, flexible EU labour for a long time now. The main reason for such reliance was the fact that workers could come and go without “bureaucratic hurdles to pass”. So, now with this gone, it will create “a shock” in many sectors, including social care, construction and hospitality, which employ the greatest number of EU migrants.

Some specific sectors, such as the vegetable and meat processing industry, employ around half their workforces from EU immigrants. It is almost impossible for people working in the food processing industry to meet the points threshold. So the concern is that businesses will struggle in finding workers “on the shortage occupation list”, and a shortage of workers may arise as a result.

While businesses recruiting EU migrants will surely suffer, an overall statement as to the impact of the new rules, in the long run, cannot be yet made. Although not to a great extent, observers suggest that the new rules may eventually lower British-born unemployment and lead to a rise in wages. Therefore, the economic consequences of the new rules are likely to be mixed.

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