Migration Advisory Committee recommends £1000 Immigration Skills Charge for non-EU workers

Following a consultation at the end of last year, the Migration Advisory Committee (MAC) has published its recommendations to tighten skilled worker visa routes into the UK with the aim of reducing non-EU migration.

The report was published on 19 January 2016 and key recommendations include:

  • Raising minimum salary thresholds that must be paid to skilled workers coming into the UK from outside the EU;
  • The introduction of an Immigration Skills Charge (ISC) to be paid by employers for each non-EU worker they sponsor;
  • Tightening the rules relating to intra-company transferees including increasing the prior experience they must have with the company from 12 months to two years;
  • Subjecting all those switching into Tier 2 from within the UK to the Resident Labour Market Test, as well as a recommendation that they should also come under the annual cap; and
  • Continuing to allow accompanying family members the full right to work in the UK.

We have provided some further detail regarding the main proposals below.

Background

In July 2015, the Government commissioned the MAC to undertake a review of Tier 2 of the Points Based System, the immigration system currently operating in the UK. Tier 2 is the mechanism by which employers are able to bring skilled workers from outside the EU into the UK for assignments (via the Intra-company route – ICT) or as permanent hires (known as Tier 2 (General)).

The ultimate objective of the Commission was to identify ways in which the Government could seek to reduce net migration into the UK via this route in the midst of a continual rise in the numbers. The key message from the MAC is that using price is likely to be the most effective way to do this.

Raising salary thresholds

  • One of the key criteria under Tier 2 is that the worker must meet a minimum salary threshold in order to qualify for the visa, the purpose here being to ensure that migrant workers do not undercut the resident labour force.
  • Under the current rules the minimum salary level for Tier 2 General has been £20,800 and the minimum salary level for the short term Intra-company (ICT) categories, including Skills Transfer and Graduate Trainees has been £24,800.
  • The MAC recommends raising the minimum salary for these categories to £30,000. However, for new entrants within the Tier 2 (General) and Tier 2 Graduate Trainee routes, the MAC has recommended an exception to this rule, with a lower minimum salary threshold of £23,000 to apply.
  • Additional exceptions may be considered for start-ups and creative occupations.

Immigration Skills Charge

  • The MAC recommends that an ISC should be introduced.
  • This will be an up-front cost payable at the time that the Certificate of Sponsorship (essentially the work permit) is issued for the worker.
  • It suggests an amount of £1000 per worker, per year of the visa. This essentially means that for a three year work visa the ISC will be £3,000 and for a five year work visa it will be £5,000 etc. It is estimated that this will raise over £200million a year in revenue.
  • The recommendations are that the charge should apply across all the Tier 2 categories, except Tier 2 Skills Transfer and Tier 2 Graduate Trainee.

Changes for Tier 2 Intra-company transfers

  • The key proposal here is that the amount of prior experience the worker must have with the employer should increase from 12 months to two years (with the exception of those using the Skills Transfer and Graduate Trainee routes).
  • It also suggests that ICTs should be required to pay the Immigration Health Surcharge (introduced in April 2015) from which they are currently exempt. This would mean an additional cost for an intra-company assignee coming into the UK for three years of £600.
  • For employers who use Tier 2 intra-company assignees to service UK client contracts (particularly common in the IT sector) the MAC has recommended a separate route be introduced with a minimum salary requirement of £41,500.

Changes to Tier 2 (General)

  • The MAC recommends that all foreign workers switching within the UK to the Tier 2 (General) route should be subject to the Resident Labour Market Test and included in the annual cap, albeit that the Government may consider expanding the cap to accommodate this.
  • Some good news here finally however, with the MAC recommending that Tier 2 (General) should not be restricted only to skills shortages and highly specialist experts. They also maintain that a ‘sunsetting’ clause should not apply to roles on the Shortage Occupation List (i.e. whereby roles would be removed from the list automatically after a certain period of time).

Tier 2 Dependants

  • Again, goods news in this area as the MAC recommends that no restrictions should be placed on a Tier 2 dependants’ right to work in the UK.

Note these are only recommendations at the current time and we will have to wait to see which of the proposals are implemented by the Government. Those recommendations that are picked up will most likely be brought into force with the April 2016 Immigration Statement of Changes.

We will of course continue to provide you with updates on this as further news emerges. In the meantime, if you have any comments or questions on this subject, please do not hesitate to get in touch, contact details below:

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