The new changes to Tier 2 in 2017

As of 24 March 2016, the UK government has announced new changes to Tier 2 type visas. This is the migration route for those who have a confirmed job offer to undertake skilled employment in the UK.

While these changes will not drastically affect the overall structure of Tier 2 type visas, they will shake up the foundation by making it costlier, by increasing the minimum salary requirement as well as introduction of additional charges, for those companies that wish to sponsor non-EU nationals who wish to work in the UK.

Below are the different categories and how they will be affected. These changes will be implemented in several stages: some were presented in autumn 2016, others will be in effect from April 2017. Some of these changes will not apply to certain public sector workers until 2019.

Tier 2 (General)

The UK Government will increase the Tier 2 (General) annual salary threshold to £25,000 in autumn 2016 following by another increase to £30,000 in 2017, for experienced workers, please note that this is for experiences workers and not new entrants.

Such a change will obviously distort the local labour market since, if an employer is only able to identify a non-EEA worker to undertake a certain job which would normally attract a salary below the revised minimum salary requirements, they would be forced to offer a higher salary for that role, even if it could be filled by a local worker. This will potentially deter some new visa entrants from accepting these jobs as they must meet the experienced threshold to extend their stay.

Resident Labour Market Test exemptions

Starting from April 2017 the government will waive this test and give some extra weighting under the Tier 2 (General) limit where the request for a restricted CoS is associated with the relocation of a high-value business to the UK. It will be interesting to see how the UK government will try to define what a “high-value business” is and what type of investment can trigger this exemption.

Tier 2 (Intra-Company transfer) (ICT)

In autumn of 2016, the Government has increased the annual salary threshold for this type of visa to £30,000 and has abolished the ICT Skills Transfer sub-route. The ICT Short Term route will be abolished in April 2017 which means that the ICT migrants (excepts graduate Trainees) will have to be paid an annual salary of £41,500. This will be a huge impact on those companies, particularly in the IT and
consulting industries. The minimum salary for ICT Graduate Trainees will has been increase to £23,000 as of Autumn 2016 and the number of places available to companies under this route will increase to 20.

High Earners

From April 2017 the threshold for high earners will be lowered from £155,300 to £120,000 for ICT migrants looking to stay in the UK for between five and nine years.

Removal of the experience requirements

From April 2017 those applying under ICT who will receive an annual salary of £73,900 in the UK, the requirement to have at least one year of experience working for the sponsor overseas will be removed.

Immigration Health Surcharge (IHS)

As of Autumn 2016 Tier 2 (ICT) migrants will be required to pay HIS.

Conclusion

These changes will have an impact on the cost to UK employers of sponsoring non-EEA nationals to work in the UK under Tier 2 and it remains to be seen whether this increase in cost, and inevitable decrease in the number of skilled migrants coming to the UK will have any effect on the attractiveness of this country as potential business and investment spot. Furthermore, it is interesting whether measures to prioritise those coming to the UK to work for high-value businesses or support inward investment will be enough to encourage overseas companies to establish entities and invest in their UK businesses.

For the time being it is important that any employers who are sponsoring non-EEA migrants under a Tier 2 visa route, or are thinking to in the future, to review their HR, mobility and recruitment policies, procedures and processes to see what can be changed or improved.

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