In what ways will the UK’s immigration policy affect business in 2016

New rules will make it harder for employers to rely on migrant workers.

Home Secretary Theresa May confronted the conventional wisdom that net immigration is both a sign of, and a contributor to, economic strength by telling Conservative conference delegates in September that the UK does not need the present high level of net migration and must act firmly to curb it. David Cameron supported her in the face of unease from business leaders, having already announced in May tougher immigration measures and new powers to enforce them.

The new Immigration Bill 2015-16 sets out mechanisms to remove illegal migrants more effectively, reduce demand for skilled and unskilled migrant labour, and renegotiate European obligations on in-work benefits which act as a pull factor to EEA migrants largely exempt from UK immigration control.

The bill makes working without permission a criminal offence, so illegal workers’ earnings become proceeds of crime, and “facilitating” such illegality becomes a new danger for employers, already subject under previous immigration legislation to criminal and civil penalties for employing migrant workers without the right permissions. The government will be able to be more involved in licensing regimes for high-risk employment sectors, and a pilot scheme penalising private landlords who fail to carry out prescribed checks on tenants’ immigration status is to be extended. Immigration officials will receive wider powers to seize property, enter, search and close down business premises.

Small businesses are often the first in line for enforcement, as they operate in sectors perceived as high risk for illegal immigration such as cleaning, independent retail and fast food, although they are least well equipped to carry out potentially onerous checks. The Immigration Act 2014 removed most grounds for appeal against immigration decisions; the new bill proposes a ‘deport now, appeal later’ approach for anyone whose appeal is not based on human rights grounds.

In 2016, employers will need to make contingency plans for more changes. Last year, the cap on Restricted Tier 2 (General) Certificates of Sponsorship (set at 20,700) was reached more than once. The cap is to stay at this level in 2016, so this is likely to happen again. The government may also decide to prioritize some skills shortages to the detriment of others, and impose time limits on certain sectors to stay on the designated shortage occupation list.

Other expectations are that Tier 2 will become more difficult – immigrants may have to pay a full health surcharge, and minimum salary levels (set out in the Standard Occupational Classification-based Codes of Practice) may rise. Employers are likely to encounter additional reporting and monitoring duties as sponsors, less flexibility on variations to terms of employment for sponsored migrants, and a requirement for sponsored migrants to be earning a minimum of £35,000 to be eligible for indefinite leave to remain in Tier 2.

The Prime Minister raised his frustration that the immigration policy hasn’t worked so far.

Unfortunately, the employers who rest on migrant labour, may conclude the same in 2016.

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