Thu 22 Oct 2015

Review of Tier 2 Visas

I recently attended a meeting of the Migration Advisory Committee (MAC) which is conducting a review of the Tier 2 visa system. This is the system which allows licensed companies to sponsor individuals from outside the EEA to work for them and it is commonly referred to as the work permit system.

The MAC has been asked to consider how the UK can reduce the use of Tier 2 visas which has increased recent years. This is not an easy task as these visas are only available when an employer is unable to recruit a worker from the domestic labour market.

What are the suggested changes?

The MAC is considering a number of ways to meet the overall aim of reducing the number of Tier 2 visas issued each year and each of these will have implications for businesses. The methods under consideration are:

  • Increased salary thresholds - Each job which can be sponsored under Tier 2 has its own minimum salary threshold and employers must pay above this rate if they intend to sponsor someone. The rates are based on UK averages and the Government has asked MAC to consider the impact of increasing salary thresholds. This will have a particularly negative impact on small and medium sized enterprises as it may make hiring a Tier 2 worker unaffordable.
  • Changing the requirements to sponsor someone - At present, a licensed employer can sponsor an individual if it completes the Resident Labour Market Test and does not find a suitable worker in the UK or EU. There are a limited number of exceptions to this as discussed in one of our previous articles. It has been suggested that this will be changed so that only jobs which are considered "Genuine Skill Shortages" will be filled by "Highly Specialised Experts" and only they will be able to use the Tier 2 route.
  • Applying a skills levy charge to businesses who sponsor foreign workers - This will be in addition to the cost of a Sponsor Licence and each CoS. It would also be separate from the proposed apprenticeship levy.
  • Removing the right of dependents of Tier 2 workers to work in the UK.
  • Tightening the Intra Company Transfer route which allows for temporary transfers between UK companies and connected companies abroad. A particular area of focus is the IT sector where it has been suggested Intra Company Transfer use is high.

What will the changes mean for businesses?

Many of those present at the meeting with the MAC expressed concern about the proposals. Currently Tier 2 is a valuable route for businesses as it helps to fill skill shortages and bring in new skills to help a business grow. The proposals will likely make this process more difficult and businesses may need to consider using other immigration routes to fill shortages.

The MAC intends to publish its findings in early 2016 and it is likely that any changes to the Immigration Rules will follow later in the year. 

If you would like further information on these changes, or you would like to discuss how the Tier 2 system can help your company fill skill shortages please get in touch.

Morton Fraser's Immigration team has been ranked number 1 in The Legal 500 2016 and shortlisted as Immigration Provider of the Year at the Expatriate Management and Mobility Awards 2015. Stuart McWilliams has been shortlisted as the Global Mobility Rising Start at the Expatriate Management and Mobility Awards 2015.

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