Immigration Act now in force; will impact employers

14 May 14

UNITED KINGDOM

IMPACT – HIGH

What is the change? Today, the U.K.’s Immigration Bill received Royal Assent – the Immigration Act 2014 is now in force.

What does the change mean? The law will make life more difficult for undocumented migrants in the U.K. by restricting access to housing, banking, healthcare and other services. However, the depth and breadth of the provisions will impact all British citizens and foreign nationals in the U.K. and create significant administrative burdens.

  • Implementation timeframe: May 14,
  • Visas/permits affected: All U.K. visa and permit categories.
  • Who is affected: All British citizens, EEA nationals, foreign nationals and all U.K. employers.
  • Impact on processing times: None – the Immigration Act does not look at individual visa categories or processes, but introduces measures designed to discourage illegal migrants from living and working in the U.K.
  • Business impact: The law will have a significant impact on employers in terms of cost and time spent on compliance measures.

Background: The bill was heavily debated as it moved through Parliament, mostly focusing on legal arguments, such as enforcement, appeals and human rights. However, the Immigration Act’s potential impact on corporate employers and employees (whether British citizens or foreign nationals) is significant.

Some key provisions impacting employers include:

  • Health services levy. The law establishes a framework for a new healthcare levy to be added to all entry clearance applications for more than six months’ duration. The levy will contribute to National Health Service (NHS) services. The law also gives the government the ability to charge for GP (general practitioner) and A&E (accident and emergency) services. This will add to the cost of any relocation to the U.K. (a figure of GBP 200 is proposed). Access to NHS will be limited to British citizens and settled workers, which means foreign workers entering for six months or less must be supported by private health insurance. Details of the scheme will be announced shortly by the Department of Health and published in secondary legislation.
  • Right-to-rent landlord checks. Landlords will be required to conduct document checks of potential tenants to identify who has a “right to rent” before issuing residential tenancies (or face fines of GBP 1 – 3000). Landlords and lawyers have criticized these provisions as unworkable, commercially naive and administratively burdensome. As a result, a pilot program in a limited geographical area will first test whether the document checks can be put into practice, before a wider national rollout. A Home Office hotline will field queries, and a consultative group including the British Property Federation, Crisis, and the Residential Landlords Association will be formed to advise on this area.
  • Enhanced penalties on employers. The law also creates a framework for enhanced penalties for employers of illegal workers and revisions to the right-to-work regime.
  • More fees. There are also provisions allowing the Home Office an unlimited right to levy fees far beyond those necessary to recover costs; employers will have no choice but to accept such fees.

BAL Analysis: While the new law discourages illegal migration, it imposes new costs associated with administering and regulating a “tighter” system. Employers are likely to feel the impact of the Immigration Act in their pockets, due to several additional direct costs and administrative processes.

Notably, the residential tenancy provisions will likely impact any relocation company or HR team that assists with home searches for employees, as the rules apply equally to domestic and international tenants. Given the difficulties companies experience conducting right-to-work checks in the employment arena, BAL anticipates considerable confusion amongst landlords and agents, and ultimately the development of a right-to-work service, whose cost will be borne by the employer or tenant.

This alert has been provided by the BAL Global Practice group in the United Kingdom. For additional information, please contact uk@balglobal.com.

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