At the end of November, if employers wish to employ skilled or temporary workers from outside the European Economic Area or Switzerland, they will need to have a "sponsor licence" issued by the UK Borders Agency. This requirement is part of a new immigration system designed to categorise economic migrants into 5 "tiers" using an objective, points-based system and which is the biggest change to UK immigration rules since the early 1960s.

A new "tier 2" category of Skilled Workers is to replace the current work permit regime, and a "tier 5" category of Youth Mobility and Temporary Workers is to replace the current regimes for student internship permits, TWES permits, and the working holidaymaker category. "Tier 1", covering highly skilled workers, investors, entrepreneurs and post-study workers, was rolled out in June 2008.

In order to employ any migrant worker under Tiers 2 or 5, employers will firstly be required to register as a sponsor and obtain a licence from the Borders Agency. Employers must firstly complete an online application form and within ten working days of submitting the application, provide evidence that they are a "legitimate organisation", to include, amongst other evidence, a certificate of employer's liability, the most recent audited accounts and evidence of registration with HM Revenue & Customs. The cost of applying is £1,000 for employers employing over 50 people and £300 for small employers.

Once licensed, employers will be subject to increased compliance and reporting obligations. Employers applying for a licence must allow the Home Office to audit their internal human resources systems and compliance procedures to ensure that they can comply (and do continue to comply) with the requisite record-keeping and reporting functions under the new regime.

Employers' responsibilities under the new regime will include:

  • Checking whether applicants qualify for a certificate of sponsorship
  • Maintaining the correct copies of employees' documents showing authorisation to work in the UK for the job that they hold
  • Keeping full and accurate records of the individual's contact details
  • Tracking the expiry date of any entry visas and performing document checks every 12 months for employees whose permission to live in the UK is limited.
  • Monitoring and reporting any significant changes in circumstances such as changes to salary, duties, personal circumstances, or where an employee fails to report for duty

Failure to comply with these obligations may result in a down-grading of an employer's licence, or their licence being revoked altogether.

Before applying for a licence, employers should ensure that their record-keeping is in order, including auditing existing document checks on their employees to ensure that all the requisite information has been obtained. Employers should also ensure that systems have been put in place to ensure that they can comply with the requirements of the new rules.

It is important to note that all employers, regardless of whether they apply for a licence, have strict record keeping duties under the new rules. Failure to comply with these requirements may result in employers committing a criminal offence with up to two years in prison and/or receiving a fine of up to £10,000 per illegal worker. Employers are therefore recommended to put in place strict procedures for initial and repeat checks of documents for the prevention of illegal working.

Detailed guidance on the changes is available on the UK Borders Agency website: http://www.bia.homeoffice.gov.uk/employers/