In June 2015, the Government in its continued efforts to reduce net migration, commissioned the Migration Advisory Committee (MAC) to review how the Tier 2 work routes for migrants could be tightened by making them more selective and generally more restrictive.

On 19 January, the MAC published its report to the Government and set out its recommendations as to how it should reduce the number of skilled non-EU migrants coming to the UK.

The MAC stated that whilst it recognised that “migrant workers had made important contributions to boosting productivity and public finances, this had to be balanced against their potential impact on the welfare of existing UK residents”. The MAC’s overall recommendation was therefore that “raising the cost of employing skilled migrants via higher pay thresholds and the introduction of an immigration skills charge would encourage UK employers to invest in more training and development of UK employees.”

The MAC’s key recommendations are summarised below:

  • Migrant workers under Tier 2 (General) Category should be paid a minimum of £30,000 as opposed to the current minimum of £20,800, as this level of pay was a better “representation of the higher qualifications required are paid under this threshold.”  It suggested that as salaries of migrants, particularly in the health and education sectors, were below this new proposed minimum, this new minimum for such workers should be phased in.
  • That the minimum salary for Tier 2 (ICT) Short Term Staff be increased from £24,800 to £30,000
  • That the minimum salary for new Graduate recruitment under Tier 2 (General) and Tier 2 (ICT-graduate trainee) be increased to £23,000.
  • That Tier 2 (ICT) route should be overhauled such that a new route should be created for third party contracting. This change was mainly aimed at the IT sector which used the Tier 2 (ICT) route to bring in specialist IT workers. They further recommended that the salary threshold under this new route be set at a minimum of £41,500 and that employers wishing to recruit migrant workers under this route should be able to do so on the proviso that they carry out the resident labour market test.
  • That a migrant must have worked for an overseas entity for a minimum period of two years, as opposed to the current minimum of twelve months in order to qualify under the Tier 2 (ICT) category for both Short and Long term staff and that more detailed job descriptions would have to be provided on the requests for Certificates of Sponsorships to evidence the nature of the role.
  • That a levy of a £1000 (referred to as an Immigration Skills Charge (ISC)) be imposed on employers for each migrant employee recruited by them. This was to discourage employers from resorting to using migrant labour and to encourage them to invest in training UK employees. This levy will be in addition to the relatively new Immigration Health Surcharge (IHS) payment which Tier 2 migrants have to pay towards the services that they might receive from the NHS.
  • Jobs listed on the Shortage Occupation List should not automatically be phased out but should be reviewed. Employers should provide evidence to justify why a particular job must remain on the Shortage Occupation List where it has been on the list for a number of years.

Pertinently and thankfully, the MAC did not recommend restricting automatic work rights for Tier 2 dependants.

Interestingly, these recommendations were made despite the fact that MAC accepted that Tier 2 migrants were generally being paid more than their UK counterparts, supporting the view that some types of migrants in this route were in fact bringing much needed scarce skills that were of high value to the UK.

The changes recommended are likely to be adopted in the Immigration rules in April 2016 and will therefore not affect anyone applying for a Tier 2 visa under the current rules.

If the recommendations are implemented, the introduction of the skills levy is particularly worrying as it is likely to impede businesses from sourcing highly skilled migrants, who they need to ensure have the technical expertise to remain competitive and maintain their ability to supply world class products and services.

The skills levy may well make the employment of non-EU skilled migrants so prohibitive, that it may well force businesses to rethink whether retaining a base in the UK or even establishing a base in the UK is a viable prospect. Making the UK a less attractive destination/hub for business is in turn likely to have a detrimental impact on the already fragile UK economy.

If you have any questions about this topic, please contact Dhruti Thakrar – Head of Immigration, or a member of the Immigration team at Edwin Coe.

Please note that this blog is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.

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