The Migration Advisory Committee (MAC) are an independent body who advise the UK government on migration issues and periodically issue reports on different aspects of immigration law. It recently reviewed Tier 2 of the Points Based System and the Immigration Minister has now responded setting out what changes are proposed to be made. These changes will start to be introduced later in 2016 and will all be in force by April 2017.
The Government’s stated aims in conducting this review were to:
- Look at restricting skilled work visas to genuine skills shortages and highly specialist experts.
- Raise Tier 2 salary thresholds to stop businesses using foreign workers to undercut wages.
- Assess a new immigration skills charge to invest in funding for training resident workers.
Not surprisingly, given the current political climate, the proposed changes are designed to tighten the rules and make entry to the UK more difficult for workers from outside the EEA.
However, not all of these proposed changes are bad news and in particular for employers who use, or plan to use intra-company transfers or are moving to the UK, the changes will be welcomed. As always, when considering such complex immigration rules, the amendments emphasise the need for businesses to carefully assess how their global talent management processes will be impacted.
What are the changes?
Increase to salary threshold
The Tier 2 minimum salary threshold, that employers must offer Tier 2 migrant workers in order for them to be permitted to work in the UK, will increase to £30,000 for experienced workers. This change will be phased in, with the minimum threshold increased to £25,000 in late 2016 and to £30,000 in April 2017. The minimum threshold for new entrants will remain at £20,800.
These thresholds serve to reduce net migration and ensure that migrant workers are not undercutting the resident labour force.
To reflect public sector pay restraint and specific recruitment challenges in these occupations, the following will be exempt from the new salary threshold:
- Medical radiographers,
- Paramedics, and
- Secondary school teachers in mathematics, physics, chemistry, computer science and Mandarin.
Where an occupation is not on the Shortage Occupation List (see here), extra weighting will be given to it in the monthly allocation of the Tier 2 (General) limit (see below). Both these measures will apply until July 2019.
In line with the MAC’s recommendations, Nurses will remain on the Shortage Occupation List. However, employers will need to try to recruit from within the UK in accordance with certain procedures otherwise known as carrying out a “resident labour market test” before recruiting a non-EEA nurse.
Extra weighting for Tier 2 (General) visas
There is an annual limit of 20,700 Tier 2 (General) Visas that can be granted, (although certain categories are not included in this limit such as general migrants who earn over £155 300 and “in country” applications to transfer from Tier 2 to another points based category). Where applications are made for visas included in this capped category, points are awarded for attributes such as salary and other factors to determine whether a visa will be issued. The Government will be allocating extra points to the types of applications outlined below to assist them in scoring enough points to qualify for a visa within the limit.
Businesses sponsoring overseas graduates get extra weighting
- Employers will continue to be able to recruit non-EEA graduates of UK universities without first testing the resident labour market and without being subject to the annual limit on Tier 2 (General) places, which will remain at 20,700 places per year.
- Additionally, the Government propose to give extra weighting within the Tier 2 (General) limit to businesses sponsoring overseas graduates, and will allow graduates to switch roles within a company once they have secured a permanent job at the end of their training programme. These changes are a positive move for employers and will take effect towards the end of 2016.
Extra weighting for businesses relocating to UK or inward investment
- From April 2017, there will be extra weighting within the Tier 2 (General) limit where the allocation of places is associated with the relocation of a high-value business to the UK or, potentially, supports an inward investment.
- The resident labour market test for these applications will also be waived.
Simplifying and encouraging intra-company transfers
- The Government intends to simplify and streamline the Tier 2 (Intra-Company Transfer) provisions. Previously there were four categories in Intra-Company Transfer visas: long term, short term, skills transfer and graduate trainee.
- In future, all intra-company transferees will be required to qualify under a single visa category with a minimum salary threshold of £41,500. The exception will be the Graduate Trainee category, where the current salary threshold will be reduced from £24,800 to £23,000, and the number of trainees that an employer may bring to the UK will be substantially increased from five to 20. There will be a transitional period until April 2017 to allow those affected to plan for the changes.
- To provide further flexibility within the streamlined intra-company transfer category, the Government will lower the minimum salary threshold for intra-company transferees working in the UK for between five and nine years from £155,300 to £120,000. They will also remove the one year experience requirement for all applications where the worker is paid over £73,900. These changes will take effect from April 2017.
Closing skills transfer and short term categories
- Towards the latter part of 2016, the Skills Transfer category will be closed to new applications and the minimum salary threshold for the Short Term category will be increased to £30,000.
- From April 2017, the Short Term category will also be closed to new applications.
Introduction of immigration health surcharge
- From late 2016, all intra-company transferees will be required to pay the Immigration Health Surcharge. This surcharge has been introduced to help fund the national UK healthcare system (NHS) and allows migrants the same access to the NHS as UK citizens. How much must be paid depends on the period of stay and type of visa, and can range from £150 – £200 per year per person (including dependents).
No changes for Tier 2 dependants
- There will be no change to the work rights of dependants of Tier 2 migrants.
Introduction of a skills charge
- The MAC strongly support the introduction of the Immigration Skills Charge to incentivise employers to reduce their reliance on migrant workers and to invest in training and up-skilling UK workers. The new charge will be levied on Tier 2 employers at a rate of £1,000 per Certificate of Sponsorship per year. A reduced rate of £364 will apply to small and charitable sponsors.
- There will be a few exceptions who will be exempt this charge: PhD level occupations, the Intra-Company Transfer Graduate Trainee category, and those switching from a Tier 4 student visa to a Tier 2 visa.
What should my business do?
The Government has stated that as part of the implementation process of these changes they also intend to simplify the Immigration Rules and guidance for skilled workers coming to the United Kingdom, to make the system clearer and more user-friendly for employers and applicants.
If you recruit Tier 2 migrants you should review how these changes will impact your business, processes and employees.
How can we help?
Abbiss Cadres offers a unique blend of skills to enable businesses to tackle complex talent management issues such as immigration and global mobility. For help in understanding just how you may be affected and what action you need to take please get in touch.