Further restrictions on Tier 2 migrants and intra company transfers expected

The government is investigating new measures to help bring the UK’s annual net migration figure below 100,000. It can do little to restrict the migration of workers from within the EEA (EU plus Iceland, Liechtenstein and Norway) into the UK, but it can make it more difficult for employers to bring in skilled workers from outside the EEA by tightening the restrictions under Tier 2 of the points based immigration system. Some changes have already been introduced.

Under Tier 2, skilled migrants with job offers can come to the UK to fill gaps in the UK labour market. Organisations can also transfer employees from an overseas company to a UK company within the same group on a short term basis using an Intra Company Transfer. In most cases intra company transferees must have worked for the overseas company for at least 12 months. Employers can also recruit new hires under the Tier 2 (General) category although there are already numerous hurdles to overcome, including applying for a sponsor licence if they don’t already have one, and taking on a number of onerous record keeping and reporting obligations if they are granted one. Sponsors may be audited by the Home Office at any time.

The Tier 2 route can only be used for employees taking up skilled management or professional roles and the role must meet a salary threshold. Applicants must also be able to show they can maintain themselves and their dependants in the UK without financial assistance. Tier 2 (General) applicants also have to meet English language requirements and pay a surcharge of £200 a year towards their NHS care. The main applicant for entry to the UK is restricted to working only for his or her sponsoring employer, but there are only limited restrictions on the work their dependants can do.

Before being able to sponsor someone under Tier 2 (General), employers must advertise the role for at least 28 days and be satisfied that no UK or EEA national can perform it, although there are a few exemptions to this. Intra company transferees, recent graduates from UK universities, jobs with an annual gross salary of at least £155,300 and roles on the shortage occupation list don’t have to meet this advertising requirement.

From April 2016 most Tier 2 applicants will additionally need to earn at least £35,000 a year in order to be able to apply for settlement after five years in the UK. Those who earn less will normally need to leave.

Last year the government asked the Migration Advisory Committee to review Tier 2, especially whether:

  • changes should be made to the skills shortages list, including only allowing jobs to remain on the list for a limited period
  • to implement  a skills levy on Tier 2 visas which would be used to fund apprenticeships
  • to restrict dependants’ right to work
  • to raise the minimum salary levels that Tier 2 employees have to be paid.

The committee was also asked to consider possible ways of tightening up the intra company transfer route, including whether to apply the immigration health surcharge to these applicants. The Migration Advisory Committee has already reported to the government on these issues and its report is expected to be made public later this month.

It is widely expected that a skills levy will be introduced, meaning an additional cost for sponsors. It is also likely that, at the very least, roles on the shortage occupation list will be updated more regularly. Proposals on restricting, or even removing, the intra company transfer route are also anticipated and minimum salary levels may be increased for all Tier 2 categories. However, it seems unlikely that the committee will recommend restricting dependants’ right to work.

Whatever is proposed, the government’s clear aim is to limit the number of Tier 2 applications. UK based businesses are, therefore, likely to face further difficulties recruiting from outside of Europe where there is a skills gap in the UK job market or may find that the cost of sponsoring migrant workers has become prohibitive.

Kerry Garcia is a partner, and Adam Landy a senior associate, at Stevens & Bolton LLP

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