The Migration Advisory Committee Announces Far-Reaching Changes to Tier 2 of the Points Based System
On 19 January 2016, the Migration Advisory Committee (MAC) published its recommendations to tighten the Tier 2 route which is the primary route for economic migration to the UK.
We have set out below a summary of the recommendations made by the MAC. It is important to note that, while the UK government is not obliged to implement all of the MAC’s recommendations, historically, it has implemented the majority of changes proposed by the MAC. Therefore, it is highly likely that the below recommendations would be put in place and UK employers should be prepared for these changes to be introduced in April.
The MAC’s main recommendations include:
- Increase the minimum annual salary threshold to £30,000 for the Tier 2 General and Tier 2 Intra-Company Transfer (ICT) Short Term routes.
- For new entrants within Tier 2 General and Tier 2 Graduate Trainee, a lower threshold should be set at £23,000.
- An Immigration Skills Charge (ISC) should apply to every employer recruiting migrants under Tier 2 (except graduate trainees). This should be set at £1,000 per year per Tier 2 migrant.
- Tier 2 ICT Long and Short-term migrants should be required to have two years of previous experience, rather than one year under the current rules.
- Sponsors should be required to provide a more detailed description of the role to be undertaken in the UK to ensure that it is sufficiently specialised.
- Tier 2 ICT migrants and family members should be subject to the Immigration Health Surcharge which is £200 per year.
- A new Tier 2 ICT route should be created for third-party contractors with a minimum salary level of £41,500.
- All in-country applicants (other than shortage occupations) should be subject to the resident labour market test and included in the monthly Certificate of Sponsorship quota. The current RLMT exemption for those switching in- country from Tier 4 to Tier 2 (General) should be removed.
- The automatic right to work for the dependents of Tier 2 migrants should be retained.
If these changes go ahead, one of the major impact on employers will be the increased cost of employing Tier 2 migrants. The increase in the qualifying period from one to two years for Tier 2 ICT Long and Short-term migrants would require additional forward-planning by sponsors, as would the need to advertise the role for in-country changes of status applications e.g. switching from a Tier 4 into a Tier 2 visa.
By raising the minimum salary threshold to £30,000 for experienced workers under Tier 2, is likely to have a big effect on lower paid professions, such as those in the social care and hospitality sectors. It will also adversely affect small and start-up businesses, a sector which David Cameron has described as the “magic ingredient” in Britain’s economic recovery and the “backbone” of the UK economy. We welcome the MAC’s recommendation to retain the right for dependents to work in the UK.
Hudson McKenzie is very active in the small business and start-up space, hence in our clients’ best interests Rahul Batra, Managing Partner at Hudson McKenzie has suggested that Tier 2 needs to be made more accessible to start-ups and SMEs.
A full copy of the report can be downloaded here.
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