Immigration law will undergo extensive changes which take effect in relation to applicants already based in the UK from 29 February 2008. Other changes will take place throughout 2008.

All existing work permits and entry schemes (including intra-group transfer) will be replaced by a single system under which applicants receive points according to their skills.

Five immigration categories

Under the new system there will be five distinct immigration categories. These are as follows.

Tier 1: highly skilled individuals who will be assessed on “tradable” points (with points available in categories such as age, qualifications and income). Applicants will be exempt from employer sponsorship requirements.

Tier 2: skilled workers with job offers in the UK. The employer will act as the sponsor for anyone coming to the UK under this category. This will be the category of most interest to employers.

Tiers 3, 4 and 5: include low skilled workers, students and youth mobility and temporary workers.

Positive obligation on employers

All Tier 2 work permit applications will be dealt with under the new Employer Sponsorship Scheme and will involve registered employers being able to issue a Certificate of Sponsorship (“COS”) to relevant employees. The application process for acceptance on to the Sponsorship Register has not yet been set out, but may include, for example, a visit from the Border Immigration Agency (“BIA”).

Upon acceptance onto the Sponsorship Register, employers will become publicly registered and rated either “A” or “B”. “B” rated employers must fulfil a time-limited action plan to improve their rating or be removed from the Sponsorship Register. Registered employers will have ongoing reporting obligations to the BIA and a number of duties, including checking that individual employees qualify for the COS and keeping accurate records. Crucially for employers, the onuswill be on the employer to verify the immigration status of the applicant whom they are sponsoring.

The Immigration Asylum and Nationality Act 2006 has also introduced broader strict liability civil offences and limited criminal offences for failure to comply with the new rules. In addition, there are various grounds of withdrawal or downgrading of sponsor status. Inadvertent breaches of the new rules could result in removal from the Sponsorship Register, with the effect that the employer would not be able to employ anyone who needs permission to work in the UK.

What these changes mean for employers

There are a number of measures which should be taken by employers in response to the new rules.

Employment contracts and offer letters should incorporate explicit positive contractual obligations on employees to notify the employer if their immigration status changes. Employee handbooks should also set out that a failure to inform the employer of a change in immigration status will be treated as gross misconduct and will result in summary dismissal.

Appraisals should be used as an opportunity to update employee details. Employers should ask the same questions of all employees to avoid claims of discrimination.

Given that employers have a positive obligation in relation to employees they have sponsored, employers should ensure they have robust record keeping systems in place. Employers should keep documentation for two years after termination of employment. It may be sensible for employers to amend Data Protection Act consent forms to inform employees that they may need to disclose personal data to the BIA.

Employers should be prepared for uncertainty during 2008 while the new rules come into force. Employers are advised to allow plenty of time to deal with applications for overseas workers.