Further changes to the visa regime proposed

Tier 2 – the basics

Tier 2 visas are the primary route for economic migration to the UK for non-EU nationals. The two main routes within this visa category are:

• Tier 2 (General), which is subdivided into two categories of skilled workers: those coming to fill jobs advertised under the Resident Labour Market Test (RLMT), or under the Government’s Shortage Occupation List (SOL). The salary requirement for this visa type is dependant on the role the migrant worker will fill but since April 2015, the minimum salary threshold has been £20,800.
• Tier 2 (Intra-Company Transfer), which allows multi-national companies to transfer key personnel from overseas branches to the UK on a temporary basis. A pre-requisite for the majority of the visas under this category is that the employee must have been employed by the overseas branch for at least 12 months before transferring to the UK.

What changes have been recommended?

As part of the Government’s stated aim of reducing the number of economic migrants from outside the EEA, the MAC was commissioned to consider changes to the Tier 2 visa. The key recommendations made include:

Salary thresholds

• The threshold for the minimum annual salary earned by entrants under Tier 2 (General) should rise from £20,800 to £30,000 to reflect the current degree level qualifications required to be eligible for this route.
• It was acknowledged that for public sector employers this rise may have to be implemented gradually due to the majority of entrants earning under the new proposed threshold. A lower threshold has also been recommended for graduates entering under Tier 2 (Intra Company Transfer) of £23,000.

Resident Labour Market Test

• At present, those individuals already in the UK who are switching from a student Tier 4 visa to a Tier 2 (General) visa are exempt from their prospective role meeting the Resident Labour Market Test.

Immigration Skills Charge

• An Immigration Skills Charge should be introduced to act as a skills levy on businesses using migrant labour. The funds raised by the Treasury could then be used towards training to widen the skills base in the UK, therefore reducing the requirements for migrant labour.
• The MAC has suggested an upfront charge of £1,000 per year for each Tier 2 migrant employed by organisations in the UK.

Restrictions to Tier 2 (Intra Company Transfers)

• The MAC recommends that the skills transfer route through Intra Company Transfers should be tightened to prioritise highly specialist staff. Research indicated that this route was often being used to allow entry to the UK for migrants servicing third-party contracts, particularly within the IT sector. The MAC concluded that this practice does not allow sufficient contribution of skills to the UK.
• It recommends that an alternative route, designed specifically for third party contracting, be created with a higher salary threshold at £41,500 (up from £24,800) to be applied.
• Further, the length of service employees at an overseas branch must have before they are eligible to enter the UK under a Tier 2 (Intra Company Transfer) visa has been recommended to increase to 24 months from 12 months.

The full MAC report can be found here.

What happens now?

There has been no comment from the Government on whether it will adopt the proposals, but if it does so, the changes are likely to come into force by April 2016.

How does this affect me?

If put in place, these changes will add another layer of complexity, expense and difficulty to the process businesses must go through to recruit non-EEA workers. It is recommended that organisations carry out a review of their current workforce in light of anticipated needs now and if necessary, take steps to hire migrant workers sooner rather than later.

How can Ward Hadaway help?

For guidance on recruiting and employing non-EEA workers or on any other issue raised by this newsflash, please get in touch.