October 30th, 2012 / Insight posted in

Employing foreign workers

The new coalition government has taken its first steps to limiting non-EU migration by implementing a temporary cap on immigration ahead of imposing a permanent one in April 2011. Record levels of foreign workers are present in the UK with 567,000 arriving in the UK last year and net immigration up by 33,000 on 2008. When introduced, this cap could have adverse affects on the technology sector and IT and outsourcing software organisations that are heavily reliant on foreign workers.

The new regulations play into the hands of larger technology firms as they can easily fill gaps because intra-company movement laws will still allow large companies to bring in people (in 2008, 12,600 of the 29,000 IT workers entering the UK through intra-company transfers arrived from India).

Indeed, over 80% of non-EU IT workers enter under these laws. The risk is that the new rules will stop small UK-owned IT businesses plugging skills gaps. What if an employer cannot fill an urgent niche requirement because there are no suitable EU candidates available?

The questions you need to address are:

• How is the cap on immigration going to affect your business? 
• Are you playing by the rules when hiring foreign employees? 
• How should you prepare for changes on immigration? 
• What can you do to fill the skills-gap?

Below is a summary of the rules on employing foreign workers and how to prepare for the impending changes on immigration.

The UK operates a points-based immigration system. Any UK business that wants to employ skilled foreign workers or temporary workers from outside Europe must apply for a sponsor licence from the UK Borders Agency (UKBA), which, in practical terms, means that employers will need to have a much greater understanding of the immigration system.

There are five tiers of immigration categories:

Tier 1 – Highly skilled migrants
Tier 2 – Skilled workers
Tier 3 – Low-skilled workers
Tier 4 – Students
Tier 5 – Temporary or exchange workers

Migrants within each of these categories will have to earn points in order to come to the UK for work or study. Moreover, in the case of all tiers, except Tier 1, migrants will have to be sponsored before they come to the UK to work or study.

For Tier 2 workers, following changes that came into effect on 6 April 2010, it will now be more difficult to gain points under prospective earnings as the minimum salary to gain points increased from £17,000 to £20,000. However, Tier 2 workers will find it easier to transfer employers within the same sponsorship organisation.

There are strict criteria that businesses will have to meet if they wish to become a sponsor under the points-based system.

• They must register with the UKBA as a sponsor before they can bring foreign workers from outside the European Economic Area into the UK to work.
• The UKBA will asses a company’s human resources systems and compliance procedures therefore, both must be up to scratch otherwise a licence may not be granted, or if granted, may subsequently be revoked.
• Businesses must alert the UKBA if their migrant workers do not comply with their immigration conditions, e.g. by not turning up for work. Failure to do so could result in the UKBA withdrawing the employer’s licence.

The system holds stringent duties and responsibilities for employers who use migrant workers from outside of Europe. Any business that fails to follow the requirements could face a fine or even a criminal prosecution.

More details about the scheme can be found on the Home Office website at www.ukba.homeoffice.gov.uk/employer/points. Alternatively, please contact Heather Matheson at HR Insight on 01708 758958 for advice. HR Insight Limited is part of Kingston Smith.