February 16, 2016

Stemming from fears of significant overuse, the UK authorities recently commissioned an independent review of the popular Tier 2 Immigration Route. The review, undertaken by the Migration Advisory Committee (MAC), was published on January 19 and contained recommendations for significant changes to the Tier 2 stream.

It is important to note that this MAC report only contains recommended changes. In order for any of these changes to be adopted, they must first undergo government approval to be written into law. Even so, final versions of these recommended changes may differ from these initial recommendations.

Tier 2 Immigration Route

Serving as one of the most highly-utilized UK immigration streams, the Tier 2 Immigration Route accounted for 151,000 foreign nationals living and working in the UK [1].  Tier 2 work authorizations cover a wide variety of “skilled” migration routes into the country including, but not limited to, intra-company transferees (ICT), general skilled migration, skills transfer to UK colleagues, and graduate trainee positions.

What’s Changed?

The full report, titled “Review of Tier 2: Balancing migrant selectivity, investment in skills and impacts on UK productivity and competitiveness,” contained nearly 300 pages worth of MAC’s analysis, conclusions, and recommended changes to the Tier 2 Immigration Route.

Recommended Increase to Minimum Salary Levels

One of the most significant changes proposed by the MAC was the recommendation to raise minimum salary thresholds for several Tier 2 subcategories:

Tier 2 (ICT) (Short Term Staff) – the report recommends raising the minimum salary thresholds from the current GBP £24,800 to £30,000 per year.
Tier 2 (ICT) (Long Term Staff) – the report recommends maintaining the current minimum salary threshold at GBP £41,500 per year.
Tier 2 (ICT) (Graduate Trainee) – the report recommends amending the minimum salary threshold to £23,000 per year.
Tier 2 (General) – the report recommends raising the minimum salary threshold from the current GBP £20,800 per year to £30,000 per year.
Tier 2 (General) (New Entrants) – the report recommends amending the minimum salary threshold to £23,000 per year.

Citing an attempt to reduce the number of applicants eligible for the Tier 2 route, these minimum salary increases would have the most significant impact on small businesses, start-ups, and some IT sector companies. If these minimum salary thresholds are adopted, the MAC endorses staggered increases to these minimum salary thresholds in order to protect public sector interests.

Newly Proposed Fees

Aimed at both lessening multinational companies’ reliance on foreign workers and encouraging the hiring of local labor, the MAC also proposed considerable new fees for nearly all Tier 2 immigration subcategories.

Immigration Skills Charge (ISC) – A new fee entirely, the MAC has recommended that the ISC be levied at an upfront charge of GBP £1,000 per Tier 2 assignee, per year (exceptions granted to Tier 2 [ICT – Skills Transfer] and Tier 2 [Graduate Trainee] subcategories).
Tier 2 (ICT) Subject to Immigration Health Surcharge (IHS) – while the IHS was first introduced in April 2015, Tier 2 (ICT) applicants have been exempt from paying this fee. The MAC, however, recommends that the exemption be lifted and Tier 2 (ICT) visa holder be required to pay the yearly GBP £200 charge.

Third Party Contracting to Receive Separate Subcategory?

Currently falling under the general Tier 2 (ICT) subcategory, third-party contractors account for an increasing portion of Tier 2 (ICT) migrants. Although this is permitted under the UK Immigration Rules, the MAC does not believe that this was the original intent of the Tier 2 (ICT) subcategory. Furthermore, the report cited specific concerns that companies in the IT sector were utilizing the Tier 2 (ICT) subcategory to leverage temporary foreign workers who may earn lower salaries than their UK counterparts.

In order to combat these factors and collect accurate data on third-party contractors, the MAC urges that a new Tier 2 (ICT) subcategory be created specifically for these applicants. In addition to other eligibility requirements for this proposed new subcategory, the MAC recommends that the minimum salary threshold for these applicants be set at GBP £41,500 per year. 

New Regulations Proposed for Change-of-Status and In-Country Tier 2 (General) Applications

The MAC also reviewed the relationship between Tier 2 (General) applications filed inside the UK (i.e. change-of-status applications) and those filed outside the UK. Overall, the report concluded that the current exemptions from Resident Labour Market Testing (RLMT) and quota figures for in-country Tier 2 (General) applicants provides this group with an unfair advantage to these in-country applications. Thus, the following recommendations were proposed:

Tier 2 (General) Quota to be Expanded to In-Country Applicants – Currently, the Tier 2 (General) annual quota is set at 20,700 Certificates of Sponsorship (CoS) that can be issued under this category; however, most in-country applicants filing for a change-of-status into the Tier 2 (General) category are exempt from this quota. In order to compete with the other Tier 2 (General) applicants filing from outside of the UK, the MAC has proposed that the annual quota numbers be revised to include in-country applicants.
In-Country Change of Status Applicants Subject to RLMT – Foreign nationals applying for an in-country change-of-status to a Tier 2 (General) visa are not currently subject to RLMT or Tier 2 quotas, which may give them an unfair advantage over Tier 2 (General) applicants filing outside of the UK who are subject to these requirements. Thus, the MAC recommends that these applicants be subject to RLMT procedures and be included in the Tier 2 (General) quota figures.

Other Points of Interest

Finally, some additional recommendations and analysis were also included:

Possible Changes to Minimum Work Requirements – Currently, Tier 2 (ICT) applicants (both long- and short-term) are required to have worked for their overseas company for at least 12 months before being eligible for this immigration route. The MAC recommends this timeframe be extended to 24 months.
Right to Work for Tier 2 Dependents – Finally, the MAC has recommended that Tier 2 dependents continue to receive work authorization in the UK automatically with their dependent status as they determined that there was no significant impact on the UK economy or local labor forces.

How These Changes Affect You

Both employers and foreign employees in the UK should take close note of these proposed changes, while understanding that these recommendations have not yet been implemented in any form. Moreover, it remains unknown which, if any, of these recommendations the UK authorities will adopt and what any final regulation changes will contain.

However, should any of these changes be carried out into the UK Immigration Rules, there could be significant effects on UK inbound immigration. Pro-Link GLOBAL continues to monitor the status of these proposals and will provide updates as they are made public by the UK authorities.

[1] Migration Advisory Committee. Review of Tier 2: Balancing migrant selectivity, investment in skills and impacts on UK productivity and competitiveness. London, United Kingdom: Gov.UK, 2015. Web.

Caveat Lector | Warning to Reader

This is provided as informational only and does not substitute for actual legal advice based on the specific circumstances of a matter. We would like to remind you that Immigration laws are fluid and can change at a moment’s notice without any warning. Please reach out to your immigration specialist or your client relations manager at Pro-Link GLOBAL should you require any additional clarification. This alert was prepared by your Pro-Link GLOBAL Knowledge Management team.

Information contained in this Global Brief is prepared using information obtained from various media outlets, government publications and our KGNM network of immigration professionals. Written permission from the copyright owner and any other rights holders must be obtained for any reuse of any content posted or published by Pro-Link GLOBAL that extends beyond fair use or other statutory exemptions. Furthermore, responsibility for the determination of the copyright status and securing permission rests with those persons wishing to reuse the materials. Interested parties are welcome to contact the Knowledge Management Department (km@pro-linkglobal.com) with any additional requests for information or to request reproduction of this material.

Visit us at: www.pro-linkglobal.com | Email us at: info@pro-linkglobal.com | Call us at: 1877 PLG 8754