UK: Statement Of Intent Published For Tier 2 - 16 February 2011

An annual quota of 20,700 Certificates of Sponsorship (CoS) for Tier 2 (General) migrants and 1,000 Tier 1 (Exceptional Talent) migrants will commence on 6 April 2011 until April 2012.  While detailed immigration rules and formal guidance will not be published until mid March, this Statement of Intent represents the Governments current plans and they are unlikely to change.

The Statement of Intent can be read in full by clicking here.

This Law Now summarises the key changes for Sponsors and employees including;

  • Who is covered by the quota?
  • How the quota will work in practice
  • Restricted and Unrestricted Certificates of Sponsorship

Who does the quota apply to?

  • Tier 2 (General) migrants i.e. "new hires" who are coming to the UK from overseas.

Who is exempt from the quota?

  • Intra Company Transfers ("ICTs") – employees with at least 12 months experience with the group overseas
  • Tier 2 migrants extending their stay with their current employer
  • Tier 2 migrants switching to a new employer.  However, for those coming to the UK after 6 April 2011, the in-country exemption will only apply to Tier 2 (General) migrants as Tier 2 (ICT) migrants will not be permitted to switch in-country to Tier 2 (General).

Example:

Employee has a CoS with Sponsor A under Tier 2 (ICT) granted May 2011.  In September  2011 he wishes to move to Sponsor B which requires a Tier 2 (General) permission.  He  cannot switch while he is in the UK.  He will have to leave the UK to apply from overseas and will therefore be subject to the quota (unless exempt because of salary).

  • Those admitted in another immigration category e.g. Tier 1 (General), Tier 4 (General) i.e. (student), Tier 1 (Post study work).
  • Those earning salary of at least £150,000.  Please note that the Resident Labour Market Test ("RLMT") will not be required for these applications.

How will this quota system work in practice?

Certificates of Sponsorship will be divided in to 2 categories;

1. Unrestricted CoS

All CoS which fall outside the quota will be classified as "unrestricted".  Sponsors will shortly be contacted, as under the current system, by the UKBA to request an initial allocation of unrestricted CoS which will then be shown on the Sponsor Management System.  There will be an ability to request additional CoS during the course of the year.

2. Restricted CoS – Tier 2 (General)

These are CoS which fall within the quota.

Unlike the current system, a Sponsor will not have a number of restricted CoS allocated to it.  Instead it will apply for one of the monthly allocations along with all other UK Sponsors.  

How many restricted CoS will be available each month?

4,200 in April 2011 and approximately 1500 per month thereafter (depending on demand).

How will Sponsors apply for a restricted CoS?

The Sponsor's application for a restricted CoS (no limit on how many it can request in any one month) must be submitted by an agreed date each month.  We understand that the "application request" will be on-line via the Sponsor Management System.

The UKBA will consider the application request against the ranking criteria based on whether it is a

  • shortage occupation;
  • PhD level post and a RLMT undertaken;
  • RLMT has been undertaken; and
  • the level of salary on offer for the role in the UK.

Please refer to the points table in the Statement of Intent

What will happen where the application requests exceeds the quota level?

The UKBA will award a CoS to all applications with sufficient points to place them above the threshold.  A minimum of 32 points will be required.  The Sponsor can then assign a CoS to the migrant – this must be done within 3 months.

If an application is unsuccessful the Sponsor will have to reapply the following month.

Once the system has been in operation we will have more clarity about which types of applications/roles/salary thresholds are likely to qualify, although there may be slight monthly variations. 

Changes to Tier 2 (Intra Company Transfers)

While Tier 2 ICTs have fallen outside of the permit quota, the UKBA will make a distinction between CoS depending on the length of the assignment.

Short term ICTs

  • This is for assignees transferring for 12 months or less.  They must be paid at least £24,000.
  • Short term ICTs cannot extend for any further period of time while in the UK and will not be permitted to return to the UK again as short term ICT until they have spent 12 months outside the UK.  
  • A short term ICT may return to the UK as a long term ICT provided salary is over £40,000.

It is therefore essential that a decision is made at the outset about the likely duration of an assignment so that an application is filed under the correct category.

Long-term ICT

  • A CoS will only be issued for more than 12 months where the UK salary is in excess of £40,000. 
  • They may apply for a limited period of 3 years and then may extend for 2 years.
  • A long-term ICT may spend no more than 5 years in total in the UK with no possibility of extending. 
  • At the end of the 5 years, the migrant cannot return to the UK as an ICT for at least 12 months.  

Example

Jo Bloggs is transferred from the US to the UK as a Tier 2 (ICT) for 12 months in May 2011.  He is paid a salary of £39,000.  

In April 2012, the company decide they need him here for a further 2 years.  The company cannot extend him in the UK beyond 12 months as he came in as a short term ICT and his salary is below £40,000.  

The company cannot send him back to the US to then return to the UK as a short term ICT for a further 12 months (January 2013).

He will be able to return to the UK as a long term ICT in May 2012 only if his salary is increased to over £40,000.  

What about Tier 2 (ICT) migrants already in the UK?

These new rules will not be applied to them.

What should Sponsors be doing now?

Sponsors should focus on the following:

  • communicating these changes to the business. 
  • identifying  migrants who may be impacted by the  April changes and whose applications should therefore be filed sooner e.g. long term ICTs ( more than 12 months ) who will earn less £40 000 in the UK.
  • using any remaining Tier 2 (General) allocations.
  • ensuring that any RLMTs are concluded in the next few days for any Tier 2 ( General ) migrants that they wish to submit applications for in the first monthly quota in April.
  • assessing how many unrestricted Certificates of Sponsorship they will require from April 2011 to April 2012.

With regard to restricted CoS, there is nothing that a Sponsor with a zero Tier 2 (General) allocation left can do until the request for allocation process is opened on 16 March.  However Sponsors must ensure that RLMT has been completed making the first request for an unrestricted CoS.  This may impact on timings.

Example

Proposed start date of 1 May 2011 for new recruit who requires Tier 2 (General) under the quota.

1st Allocation of Restricted CoS  - likely to be issued early April and request for restricted CoS must be submitted from 16 March.

RLMT – must run for at least 28 days with sufficient time to consider applications.  Therefore, unless the RLMT advertising has been started by now it is unlikely the Sponsor will be able to apply under the April quota.

Transitional provisions for migrants already in the UK

The Statement of Intent confirms that the new requirements will not apply to applicants who apply before 6 April 2011. 

For entry clearance applications, an application is treated as having been submitted when the fee is paid and for in-country applications on the date of posting.

Applications must therefore be submitted by 5 April 2011 to be treated under the old rules.  For migrants applying close to this cut off date and who may receive a visa after this date, it is essential that they retain evidence of when the application was submitted to show that the post 6 April 2011 rules should not apply to them – for example biometric receipt/evidence of date of posting.

Good news for graduate recruiters!

  • Tier 1 (Post Study) workers can switch to Tier 2 (General) from within the UK.

    In addition there will be no RLMT required where they have been in post for 6 months or more with the Sponsors.
  • Tier 4 (General) will be permitted to switch in to Tier 2 (General).  They will therefore also fall outside the quota provided they file from within the UK before their visa expires.

New rules on settlement

Very general details are provided in the Statement of Intent on the new rules for settlement.  The proposal most likely to cause issues in that:-

  • Tier 2 migrants must receive the salary specified in the relevant code of practice (i.e. minimum market rate) and the level stipulated when they were last granted leave.

    This may cause issues where a migrant has taken a salary reduction due to flexible working hours, agreed a reduction in hours due to paternity/maternity leave or where overall remuneration is dependent on profit share. 

Conclusion

The Government has thankfully listened to the concerns of business over the last few months and the framework that has been announced is far more business friendly than we had anticipated when the quota system was first introduced last July.  We have particularly welcomed the confirmation that Intra Company Transfers and "switching" applications will be permitted for migrants already in the UK in another category.
 
The next few months are definitely going to be challenging for employers seeking to bring in workers from outside the EU.  As the new system is rolled out we will be able to gauge the minimum salary thresholds needed to qualify under the quota and the timelines required to recruit migrant workers.  While there will undoubtedly be issues to be addressed from some quarters, the UK clearly remains " open for business ".

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 17/02/2011.

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