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The Home Office’s response to the MAC’s Tier 2 reviews – the Good, the Expensive and the Uncertain…

6 April 2016

On 24 March the government announced the actions it will be taking in response to the Migration Advisory Committee’s reports following its recent reviews of the Tier 2 visa category. The proposed changes are set out below:

The Good

Tier 2 (General)
  • The resident labour market test exemption for Tier 4 students switching to Tier 2 will remain in place
  • Overseas graduates will be given extra weighting in the annual Tier 2 (General) limit, meaning it will be easier for prospective employers to obtain restricted certificates of sponsorship for them
  • Nurses will  remain on the Shortage Occupation List but employers will need to carry out the resident labour market test before recruiting from overseas
  • Nurses, paramedics, radiographers and some teachers will be exempt from the new increased Tier 2 (General) salary threshold for experienced workers (exemption will end July 2019)
  • The current minimum salary threshold of £20,800 for new entrants will remain in place (although note that the SOC Codes may still require a higher salary level to be paid)
  • Graduates will be able to switch roles within the same employer once they have secured a permanent job.
Tier 2 (ICT)
  • A new, lower annual salary threshold of £23,000 will apply to those in the Graduate Trainee sub-category and places available will increase to 20 per employer per year
  • The ‘high earners’ salary threshold for the Long-Term Staff sub-category will reduce to £120,000 from April 2017
  • The requirement for those in the Long-Term Staff category to have 12 months’ employment with the overseas entity before they are eligible for sponsorship will be removed where their salary is over £73,900.

The Expensive

A new Immigration Skills Charge will be levied on employers who sponsor migrant workers under Tier 2 (both General and ICT). The charge will be £1,000 per person sponsored per year from April 2017. A reduced rate of £364 per person per year will apply to small and charitable sponsors. An exemption will apply to migrant workers in PhD roles, Tier 2 (Intra-Company Transfer) Graduate Trainees, and those switching from Tier 4 to Tier 2.

Tier 2 (General)
  • New annual salary threshold for experienced workers of £25,000 from Autumn 2016, rising to £30,000 in April 2017
Tier 2 (ICT)
  • The Immigration Health Surcharge will apply to ICT applications from Autumn 2016 onwards
  • New increased salary threshold of £30,000 for those in the Short-Term Staff sub-category
  • A new, single ICT category with a minimum salary of £41,500 will be introduced. The Skills Transfer sub-category will be closed to new applicants in Autumn 2016 and the Short-Term Staff sub-category will be closed to new applicants in April 2017 – employers will need to use a new, general ICT category instead

The Uncertain

  • The resident labour market test will be waived where the visas to be granted are pursuant to the relocation of a high-value business to the UK or, potentially, an inward investment project. These applications will also be prioritised in the Tier 2 (General) annual quota. However, there is as yet no further guidance on the type of situations this will apply to.
  • The use of allowances in calculating salaries under Tier 2 (ICT) will be reviewed and further changes may be made.
  • The Immigration Rules for work visa categories will apparently be simplified, but we do not yet know what the revised rules will look like.

Over the next 12 months we will be monitoring these changes carefully. We will provide further and more detailed updates and analysis in Autumn 2016 and April 2017 when the changes are due to come in.

In the meantime, if you have any queries or would like to discuss these changes please get in touch with your usual contact in the Immigration team.

This article was written by Katherine Dennis. For more information please contact Katherine on +44 (0)20 7427 6738 or at katherine.dennis@crsblaw.com