On 24 March 2016, James Brokenshire (The Minister of State for Immigration) announced reforms to the Tier 2 skilled work route with the aim of reducing the increasing number of migrants and reliance on them to fill shortages in the UK labour market. The reforms are in response to the Migration Advisory Committee (‘MAC’) published report on Tier 2 and its separate report on the nursing shortage.  Please note that this article does not cover the MAC’s recommendations in respect of nurses.  

The MAC’s recommendations in its report on Tier 2 included increasing the minimum salary threshold of migrants, the introduction of an Immigration Skills Charge (‘ISC’) on employers and a recommendation that the use of the Tier 2 (Intra-Company Transfer) (‘ICT’) category for third party contracting be moved into a separate route and a higher salary threshold be applied. Notably, the MAC did not recommend restricting automatic work rights for dependents of Tier 2 migrants.  The Government intends to accept most of the MAC’s recommendations.

The changes summarised below will be introduced in two stages to allow those affected plan for the changes.

Autumn 2016 changes

  • There will be an increase in the Tier 2 (General) minimum salary threshold to £25,000 per annum for experienced workers (the minimum salary threshold of £20,800 per annum for new entrants will remain unchanged).
  • There will be exemptions from the increased Tier 2 (General) experienced worker salary threshold for nurses, medical radiographers, paramedics and secondary school teachers in mathematics, physics, chemistry, computer science and Mandarin. This exemption will end in July 2019.
  • The Tier 2 (ICT) Skills Transfer category will be closed to new applications.
  • The salary threshold for the Tier 2 (ICT) Short Term category will increase to £30,000 per annum.
  • The Immigration Health Surcharge will be introduced for the Tier 2 (ICT) category.
  • The minimum salary requirement for the Tier 2 (ICT) Graduate Trainee category will be reduced from £24,800 per annum to £23,000 per annum and the number of places available to companies will rise from 5 to 20 per annum.
  • Extra weighting will be given to overseas graduates in the Tier 2 (General) monthly quota allocation, to make it easier for employers to score the necessary points to secure a restricted Certificate of Sponsorship (‘CoS’).
  • Employers will continue to be able to sponsor non-EEA graduates of UK universities without first testing the resident labour market.  These non-EEA graduates will not be subject to the annual limit on Tier 2 (General) places which will remain at 20,700 places per annum. Graduates will also be able to switch from their Tier 4 visa to Tier 2 following graduation if they secure a permanent job at the end of their studies, without the sponsor having to undertake a resident labour market test.

April 2017 changes

  • The Tier 2 (General) minimum salary threshold will be raised to £30,000 per annum for experienced workers.
  • The Tier 2 (ICT) Short Term category will be closed to new applications.
  • Tier 2 employers will be required to pay the ISC in the sum of £1,000 per CoS per annum (£364 for small businesses and those in the charitable sector).  The MAC suggested an upfront charge and therefore, the ISC for a 3 year visa would cost £3,000 and a 5 year visa would cost £5,000. There are exemptions for PhD-level jobs, the Tier 2 (ICT) Graduate Trainee category, and international students switching from Tier 4 to Tier 2 (General). 
  • The high-earners’ salary for the Tier 2 (ICT) Long Term category will be reduced from £155,300 per annum to £120,000 per annum.
  • The one year experience requirement in the Tier 2 (ICT) Long Term category will be removed where the applicant is earning over £73,900 per annum.
  • There will be a waiver of the resident labour market test and prioritisation for Tier 2 (General) places where the visa grant(s) are in support of the relocation of a high-value business to the UK or, potentially, supports an inward investment project.

If you would like to discuss any of the issues raised in this article, please contact Chetal Patel, an Associate in the Immigration Department.

Chetal  Patel photo

Chetal Patel

Senior Associate

+44(0)20 7551 7741

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Posted on 01/04/2016 in Legal Updates

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