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Immigration Update January 2016

The Migration Advisory Committte ("MAC") was commissioned by the Government in June 2015 to advise on changes to Tier 2 of the Points Based System and on 19 January 2016 MAC published its recommendations to tighten the Tier 2 skilled worker route and following its review, has proposed the following:-

Minimum Salary Thresholds

The overall minimum salary threshold be increased in both the Tier 2 (General) and Tier 2 (Intra Company Transfer) categories.

For Tier 2 (General), it is recommended that the minimum salary be increased by £30,000 per annum for experienced workers, and £23,000 for new entrants.

For Tier 2 (Intra-Company Transfer), the recommended minimum salary for thsoe applying under the Short-Term, Graduate Trainee and Skills Transfer sub-categories will be £30,000 per annum.  The recommendations for the Long-Term Staff sub-category is that the salary should remain unchanged from the current £41,500 per annum.

Immigration Skills Charge

This is a levy that MAC has recommended the Government introduce for all Tier 2 applications with the exception of those applying under the Tier 2 (ICT) Skills Transfer and Graduate Trainee routes.  Although MAC has said it is a matter for HM Treasury to determine the level of the charge and how this will be spent, it is their view that the charge should be an up-front cost, payable at the point of application for a Certificate of Sponsorship and that the charge should be regressive so that employers hiring more highly paid (and therefore by inference more highly skilled) workers are penalised less in proportion to the salary paid.

Tier 2 (Intra-Company Transfer)

Beyond the introduction of the ISC and higher salary thresholds, MAC has not made any substantial recommendations to the ICT route.  However, in order to ensure thta the route is being used to bring senior managers and specialist staff to the UK, and not displacing resident workers, MAC is recommending that the qualifying period of employment overseas be exended from 12 months to 24 months for Tier 2 (ICT) Long-Term and Short-Term applications.  The increase will not affect assignees from applying under the Graduate Trainee or Skills Transfer routes. 

MAC has also recommended that Tier 2 (ICT) applications be subject to the Immigration Health Surcharge that is currently in place for Tier 2 (General) and other immigration categories.

Introduction of a new Tier 2 (ICT) Route

MAC has recommended the creation of a new route within Tier 2 (ICT) to enable sponsor companies to use workers to carry out third party contract work, on one off projects as well as on contracts for continuing services.  MAC has observed that the use of overseas workers from countries such as India where labour costs are lower (predominantly within the IT sector), is affecting the competitive advantage of IT firms within the UK who do not have access to this source of labour.  It has therefore recommended that the salary threshold within the new Tier 2 (ICT) route be set at £41,500 per annum irrespective of the length of time that the worker will be in the UK in order to prevent undercutting and displacement within the UK labour market.

Tier 2 (General)

MAC has recommended that all applications for switching in to Tier 2 (General) from inside the UK be subject to the Resident Labour Market Test, affecting mainly overseas students in the UK under Tier 4 whose prospective employers are currently exempt from the requirement to advertise the position.

The annual limit for Tier 2 (General) applications for those applying from outside the UK is currently set at 20,700.  This will soon be reviewed and MAC recommends that a new expanded limit be introduced to include in country applications in order to ensure fair competition with those applying from outside the UK.

Work Rights for Tier 2 Dependants

MAC has reported that the automatic right to work for Tier 2 dependants in the UK appears to pose minimal risk to the UK economy as evidence suggests that a large proportion of Tier 2 dependants are highly skilled.  It also concluded that restricting dependant work rights would have no significant impact on the overall volume of Tier 2 applicants.  MAC has therefore recommended that the automatic work rights for Tier 2 dependants remains unchanged.