03 June 2016 #Immigration
Immigration is never far from the headlines and never has it been so widely discussed as in the lead-up to the EU referendum. There is much debate over whether leaving the European Union would mean that nationals of the European Economic Area (or EEA, being the EU member states plus Norway, Lichtenstein and Iceland) would lose their visa-free access to the UK. Whilst the post-Brexit future for EEA nationals is deeply uncertain, we do know what measures the Government will be implementing in respect of migrants from outside of the EEA and those working here illegally. As discussed in this article, the Government is implementing measures to make the UK an increasingly hostile place for people who are here illegally, whilst also trying to strike a balance between reducing overall immigration but not discouraging those who can add value to our economy.
Clamping down on illegal working
The Immigration Act 2016 which recently came into force (and will be enacted over the next few months through regulations) will introduce new measures to make the UK a more difficult place to live and work illegally. As set out in our recent blog, once implemented, a new offence of illegal working for workers will be created and those working here illegally will face a potential sentence of up to 6 months and/or a fine and their earnings may also be seized as the proceeds of crime. Employers who know, or have reasonable cause to believe, that they are working illegally will also face tougher sentencing and fines. Whilst the maximum fine for employers will remain at a hefty £20,000 per illegal worker, the maximum custodial sentence will be increased from 2 to 5 years. Immigration officers will also be given new powers to close some employer’s premises for up to 48 hours where illegal working is suspected and the employer cannot provide evidence of right to work checks.
To avoid these potentially devastating penalties, businesses must have in place a clear system for checking each employee’s right to work in the UK. This involves checking the employee’s passport, ID card and visa (if they have one) and being satisfied that the evidence that they provide shows that they are legally permitted to do the job on offer. Currently, employees from the UK or the EEA can work here without a visa, but most others will need some form of visa to work legally in the UK. Employers must keep a record of each check to ensure that they maintain a “statutory excuse” against a penalty. If you employ someone on a visa which will expire at some point in the future, you also need to have a clear system in place for checking their right to work when this expires.
The Immigration Act 2016 builds on the Immigration Act 2014 which received Royal Assent two years ago and made what was described at the time as "fundamental changes" to the immigration system. Amongst these changes was the introduction of the right to rent scheme which came into force earlier this year, which requires landlords of residential premises to check the immigration status of prospective tenants and other occupiers. The Immigration Act 2016 also widened the potential penalties under the right to rent scheme so that they mirror the tougher penalties for employers who employ illegal workers. The combined effect of these measures will be to make it much harder for people to live and work here illegally and to put the burden of checking this on to those offering homes and jobs.
Changes to the rules on sponsored workers
The Immigration Act 2016 also contains the power to introduce a new “skills levy” on businesses sponsoring workers from outside the EEA. This is expected to be introduced in April 2017 and the Government has announced that the charge will be £1,000 per worker per year (there will be a lower charge of £364 for small and charitable sponsors). The Government’s aim is to encourage employers to recruit and train UK employees, rather than employ them from overseas, and the money will go towards funding apprenticeships. Whilst some migrants will be exempt (those in PhD level occupations, on Tier 2 Intra Company Transfer Graduate Trainee visas and those transferring from Tier 4 General visas to Tier 2), for the majority of employers this will mean that the cost of employing someone from outside of the EEA will be significantly higher.
This new charge will join the various existing costs associated with sponsoring workers. Employers who want to recruit staff from outside of the EEA will firstly need to apply for a sponsor licence if they don’t already have one – the fee for a 4-year licence is currently £1,476 (£536 for small or charitable sponsors). If you want to then sponsor someone on a Tier 2 visa you’ll need to assign a certificate of sponsorship (at a cost of £199) and then the visa application fees can range from £437 to £1,828 per person. There is also the relatively new immigration health surcharge to pay of £200 per year of the visa.
The new skills charge is just one of a number of measures that will be implemented over the next year as part of the Government’s pledge to reduce net migration to the UK from the hundreds of thousands to the tens of thousands. Just over half of the 300,000 or so people migrating to the UK are from outside of the EEA and so our immigration laws can control whether they are given permission to work or study here to a certain extent. The main changes in the pipeline that employers need to be aware of are:
If your business relies on recruiting or transferring employees from outside of the EEA then you may have to review your existing recruitment practices and/or budget for the increased costs of sponsoring workers once these changes take effect over the next year.