All Change: The New UK Business Immigration System

Commencing in March 2008, the British government will start implementing a radical overhaul of its immigration procedures for people from outside the European Economic Area who wish to come to the United Kingdom to work. The headline points of this new system are:

• Over 70 existing routes to enter the United Kingdom to work, train or study will be consolidated into five groups (Tiers).
• It will be a points-based system (Points-Based System). Eligibility to enter the United Kingdom, or to extend a stay in the United Kingdom, will be determined by "earning" enough points—through educational qualifications, employment earnings and other objective criteria.
• Employees who seek visas in Tiers 2-5 will need to be sponsored by a licensed UK employer (Sponsor).
• Sponsors will be subject to new compliance and reporting obligations, enforced by a range of new civil and criminal sanctions. Licenses will be granted, refused or withdrawn based on an employer's ability to meet these obligations.
• Everyone wanting to come to the United Kingdom through the Points-Based System will need a biometric visa, or a biometric identity card when extending work status within the United Kingdom.

How the New System Will Affect Intra Company Transfers

The easiest way to understand these changes is to see what they will mean for American employers who have used the current Work Permit Scheme to transfer employees from the United States to work in their UK group companies (Intra Company Transfers).

Currently, a UK employer can apply for a work permit if it demonstrates that it is, or soon will be, an operating business and is part of the same group as the non-UK company employing the person to be transferred. The work permit is issued if the transferring employee has been employed by the non-UK company for at least six months and has company proprietary skills or knowledge required by the UK company. Once the work permit has been issued, the employee can apply for a UK visa at a British consulate in the United States. (From December 2007, American citizens are required to have biometric visas.) However, if the work permit is issued for six months or less, a visa is not required.

In the new business immigration system, Intra Company Transfers will come under Tier 2 of the Points-Based System, for "skilled workers with a job offer to fill gaps in the UK labour force." There will be three parts to this new system: Sponsorship, Certificates of Sponsorship and the Visa Application.

Sponsorship

A UK employer must be licensed before it will be able to apply to bring an Intra Company Transferee to work in the United Kingdom. An employer will apply online, but will need to submit hard copies of the required documents within 14 days. In its application, the employer will have to specify the Tiers and categories in which it expects to bring in foreign workers. If the application satisfies the general criteria for sponsorship and the specific criteria applicable to the Tiers and categories for which the employer applies, a license will be granted for four years. A license will be valid only for the Tiers and categories applied for, and will be graded "A" or "B." Most Sponsors are expected to be graded "A." Those graded "B" will need to comply with a time-limited action plan to improve their ability to comply with their duties as a Sponsor.

While many of the general criteria for becoming a Sponsor in the new system are similar to current criteria, some represent a higher standard, and greater burden, for UK employers. As under the current system, "startup companies" and established companies must produce different sets of documents. ("Startup companies" include companies that do not yet have a set of audited accounts (financial statements); a first set of accounts may not be prepared for over two years from the commencement of business.) Startup companies will, and established companies may, be required to prove they have employers' liability insurance for at least £5 million from an insurer registered with the UK regulator. Also, startup companies will, and established companies may, be required to prove the existence of a current, corporate bank account. (Setting up a bank account for a new company can be cumbersome and time-consuming in the United Kingdom.)

Sponsorship applications are likely to require commitments concerning an employer's capability and willingness to fulfill the new record keeping and reporting duties. All Sponsors will be required to keep, and provide to the Border & Immigration Agency on request, copies of the passport or immigrant status documents of all its Points-Based System workers (Migrants) and the current contact details of each Migrant. Sponsors will also be required to timely notify the Border & Immigration Agency of a Migrant's failure to start work, absence from work for ten working days without permission, premature cessation of work (whether by resignation or termination), and any significant change in work conditions. Ominously, every Sponsor will also have a duty to report "any suspicions it may have that a migrant is breaching the conditions of his or her leave."

Tier 2 Sponsors will need to meet the same test as currently applies for employers wishing to bring an Intra Company Transferee to the United Kingdom: a sufficient common ownership link between the UK company and the foreign company from which the employee will transfer. Under the new system, however, every Sponsor-applicant will have to indicate the number of Certificates of Sponsorship it expects to request per year for new Migrants and for existing Migrants for whom it will seek extensions. (See "Certificate of Sponsorship" below.) Applicants for sponsorship in the Intra Company Transfer category may need to have particularly good crystal balls to forecast not only the numbers of its Migrant employees over four years but also the group companies from which they may come so that the Sponsor-applicant can demonstrate in advance its common ownership with each of these companies.

Although a Sponsor will be licensed for four years, the Border & Immigration Agency will review its performance during that period and, if required, take steps to ensure better compliance, including downgrading or withdrawing the Sponsor's license.

Certificate of Sponsorship

A Migrant can only apply for a UK visa under Tiers 2-5 by submitting a Certificate of Sponsorship (Certificate). Only a licensed Sponsor will be able to issue this Certificate. A Certificate will not be a document; rather, it will be a unique reference number that the visa applicant will use with his visa application.

To issue a Certificate, a Tier 2 Sponsor will need to demonstrate that the job in question satisfies the Resident Labour Market Test or is a shortage occupation, and thus is exempt from usual requirements to recruit among existing residents. The UK government has indicated that the new system will no longer include a requirement to demonstrate the Migrant's company-specific proprietary skills or knowledge for an Intra Company Transfer. Instead, the government has indicated that it will require that the employee be paid "a salary appropriate to the UK." The UK government will publish more details later this year.

Visa Applications/Requests for Further Leave to Remain

An Intra Company Transferee Migrant seeking to enter the United Kingdom, or seeking to extend his current stay in the United Kingdom, will first need to have a Certificate of Sponsorship issued in connection with that application.

The Migrant will also need to have had his irises scanned and fingerprints taken for a biometric visa or biometric identity card. Those scans and prints will be taken by agencies approved by the UK government.

As currently proposed, applicants for Tier 2 Intra Company Transfer visas will need 50 points in order to qualify for that visa. Not coincidentally, the current proposal shows that a qualifying Intra Company Transfer job offer accompanied by a Certificate of Sponsorship will earn the visa applicant those 50 points.

Timetable

The first part of the Points-Based System is due to go live on March 14, 2008. This part will be Tier 1, which covers "highly skilled individuals to contribute to growth and productivity." The UK government plans to open the sponsorship application process "in early 2008," it says, with the current timetable calling for Tier 2 to be implemented "in the third quarter of 2008."