UK: The Right Response – The Government's Largely Non-Protectionist Stance Is Unexpected And Welcome

Last Updated: 7 April 2016
Article by Jonathan Chaimovic, Tim Richards, Neena Samuel and Nisha Mahi

Fears of wholesale, protectionist change to the Tier 2 framework have been calmed. The Government's measured initial response to the Migration Advisory Committee's (MAC's) January 2016 recommendations provides encouragement to Tier 2 Sponsors in the quest to employ the brightest and the best, irrespective of nationality. The main changes announced, to be implemented in Autumn 2016 and April 2017, are summarised below.

Surprisingly, on the basis of the brief Ministerial statement, the Government declined to implement some of the MAC's more protectionist recommendations. Some key changes and their implementation timelines are:

All Tier 2 Processes

April 2017 – Introduction of an annual Immigration Skills Charge (ISC) to be levied at an annual rate of £1,000 per person.  A reduced annual rate of £364 per person for small and charitable sponsors.  PhD roles, Tier 2 Intra Company Transfers (ICTs) Graduate Trainees and those transitioning from Tier 4 to Tier 2 General will be exempt from the ISC.

April 2016 – April 2018 - Transitional arrangements for workers at NQF levels 3 and 4 to be phased out.

Tier 2 General

  • Maintaining the exemption from Resident Labour Market Test (RLMT) for eligible students transitioning to Tier 2 from Tier 4;
  • No "global quota" covering in and out of country Tier 2 General applications;
  • The minimum salary thresholds (subject to Code of Practice (COP) thresholds) for new entrants to remain at £20,800.  The MAC had recommended an increase to £23,000;

Autumn 2016 – Increase of minimum salary thresholds for experienced workers to £25,000.  The MAC had recommended an immediate increase to £30,000;

Autumn 2016 – Weighting of overseas graduates more heavily in the Tier 2 General monthly quota;

Autumn 2016 – Enable graduates to switch roles when they secure a permanent job at the end of their training programme;

April 2017 – Increase of minimum salary threshold for experienced hires to £30,000 and

April 2017 – Waiver of RLMT, and extra weighting within Tier 2 General quota for roles associated with relocation of high value businesses to the UK or which carry potential for UK inward investment. 

Tier 2 ICTs

  • Maintenance of 12 months' overseas group company service requirements for Tier 2 Long Term ICTs.  The MAC had recommended an increase to 24 months;

Autumn 2016 – Closure of the Tier 2 ICT Skills Transfer category for new applicants;

Autumn 2016 – Removal of exemption from Immigration Health Surcharge (IHS);

April 2017 – Closure of Tier 2 Short Term Staff and creation of a single Tier 2 ICT category with a standard minimum salary requirement of £41,500 (except for ICT Graduate Trainees);

April 2017 – Reduction of high earners' salary for Long Term Staff ICT applicants from £155,300 to £120,000 for stays of between 5 and 9 years;

April 2017 – Removal of requirements for 12 months' overseas service for Tier 2 ICT Long Term Staff, for roles commanding a gross annual salary of over £73,900; and

April 2017 – Implement possible changes in the extent to which allowances can count as 'salary' under the Tier 2 ICT framework.

We await further detail of the intended changes, particularly those relating to the creation of a single Tier 2 ICT route, and the waiver of RLMT for applications under Tier 2 General associated with the relocation of high value business and for roles which have a potential UK inward investment dynamic.  We will update accordingly.

The Right Response – The Government's Largely Non-Protectionist Stance Is Unexpected And Welcome

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