The skilled migrant cap in the Tier 2 General category was reached again in July. The visa limit was also hit in June, resulting in many UK employers being unable to hire the skilled non-European workers they need to plug the skills gap, to train their UK workforce and to expand to overseas markets.
The UK's Tier 2 cap is set at 20,700 visas for each allocation year, running from April to April. The cap is split into a monthly allocation, with 1,650 certificates of sponsorship available in most months. The cap applies to any overseas applicants for roles requiring the resident labour market test to be conducted with a salary under £155,300 per year and also to UK applicants who are currently on Tier 4 dependant visas.
Tier 2 General applicants already in the UK on qualifying visas and Tier 2 intra-company transfers fall outside the cap. Shortage occupation roles - such as specialist scientists, medical practitioners and engineers - are caught by the cap but are effectively guaranteed to receive approval against the cap as a result of the points scoring system.
With a recent upsurge in UK recruitment levels and a skills shortage across many sectors, demand for a "restricted" allocation against the cap has risen sharply over the past few months. Until June 2015, the cap had never been reached, partly due to a consistent roll-over of unused certificates from previous months. Now that the slack has been removed from the system, in June and July the number of certificates requested exceeded the monthly limit, meaning many applications were unsuccessful. Once the cap is reached, UKVI gives priority to shortage occupation and PhD level roles and then uses a scoring system for the remaining applications, with points allocated according to proposed salary levels. The minimum benchmark salary to succeed against the cap in any given month depends on the total number of applications against the limit. The salary threshold for June and July was as follows:
- June 2015 – minimum UK salary to qualify was £46,000
- July 2015 – minimum UK salary to qualify was £32,000
We expect demand to continue to exceed the monthly cap level for the foreseeable future due to the serious skills shortages across many industries and because unsuccessful applicants in June or July will want to re-apply. It may be that the minimum salary to be successful in August or subsequent months is bumped up again to £46,000, because the statistics reveal that the July cap was increased by almost 400 certificates following a roll-over from June. There will only be 97 extra certificates carried over from July to August, so sponsors should be prepared for the cap to be hit again and for the possibility that they will be unable to sponsor a Tier 2 General visa unless annual salary is at least £46,000.
If demand continues to spike, it is conceivable that the minimum salary threshold could jump to the next band starting at £75,000, which would have a disastrous impact for most employers.
We have seen many companies and migrants affected by the cap being reached in the last two months. In the private sector, technology and other start-ups, SMEs, employers outside London, and businesses recruiting graduates and young people in entry-level positions – all of which typically offer lower salaries – have unable to fill crucial vacancies.
Employers considering hiring talent on Tier 2 General visas from overseas should continue to monitor the monthly cap outcomes, consider proposed salary levels against internal payscales and plan ahead for possible delays in recruitment.