Are you prepared for the increased costs for hiring non-EU staff? - | Hudson McKenzie

Are you prepared for the increased costs for hiring non-EU staff?

February 4, 2016 | Immigration, News

The Migration Advisory Committee (MAC), an independent advisory body has proposed several changes to the Tier 2 of the points based system in a covert effort to reduce skilled migrants from coming to the UK. By doing so, the Govt, is asking employers to upskill and recruit British people.
As a consequence of these proposed changes, it is inevitable that UK companies would have to spend a lot more when looking to recruit non-EU staff, please click on the following link Report by the Migration Advisory Committee (MAC) to view the changes in detail. We feel that medium to large companies who recruit several non-EU works are going to be hit the most which would ultimately affect their staffing strategies.
The MAC has put forward several recommendations to curb Tier 2 migration thereby tightening the immigration rules for skilled sponsored workers. Amongst others, the suggestions include:

  • Increasing the minimum salary for Tier 2 workers to £30,000 per annum.
  • Charging employers a £1,000 ‘immigration skills charge’ for each year of sponsorship for a Tier 2 worker.
  • Paying Tier 2 workers assigned to a client contract at least £41,500.
  • Intra-company transferees to have a minimum of two years’ company experience overseas before they are able to move to the UK (up from one year at present).

Clearly, these changes cannot be taken lightly by any employer. It is not that simple and straightforward for companies to increase salaries or pay an ‘immigration skills charge’ which can easily add up for employers recruiting several non-EU workers.

It is important to point out that the above changes are not law as of yet. However in our experience, historically the Govt. does tend to follow MAC’s recommendations therefore employers must be prepared for these changes which we expect would come into force on 6th April 2016.

Next steps for employers recruiting non-EU workers

First and foremost, the recruitment and HR teams must let their management teams know of the above changes in order for them to work out the additional cost to the business. Such haphazard increased costs could well mean that employers are having to rethink their business strategies, which employee should be based where and ultimately changes to the cost of their products or services. It is also a good idea to inform the immediate line managers, talent acquisition, pay & benefits teams, financial controllers and in-house counsel.

At Hudson McKenzie we are always there to support your HR function and guide you through the maze of such complex changes. Please feel free to call Rahul Batra, Managing Partner on 020 3318 5794 or email at rahul.batra@hudsonmckenzie.com to discuss any of the above changes or how these could potentially affect your business.