Migration Watch UK has recently published a paper drawing attention to a perceived abuse by certain employers of part of the UK’s immigration system. Distortion of the ICT visa system suggests that the Tier 2 (Intracompany Transfer) (‘ICT’) visa route is currently being exploited by employers who are ‘undercutting the domestic labour market’. The ‘law that is’ and the ‘law that ought to be’ by nature pull in opposite directions. Taking UK immigration law as a ‘closed circuit’, the use of the word ‘loophole’ might better be categorised by some as simply ‘poor regulation’.

Background

The main visa route through which UK companies sponsor migrant workers is Tier 2. Tier 2 consists of Tier 2 (General) and Tier 2 (ICT). Tier 2 (General) is used to sponsor new hires who work outside of a company’s corporate structure. Tier 2 (ICT) is used by multinational companies to transfer employees (working in the corporate structure) to the UK on a temporary basis.

For both visa types, employees must be sponsored. They need a Certificate of Sponsorship from the company and must receive a minimum salary. The role they perform must also qualify for sponsorship.

What is the ‘loophole’ and how is it being exploited?

Ease of access to the UK labour market

Companies are (usually) required to demonstrate that there are no suitably qualified candidates within the resident workforce for Tier 2 (General). A monthly cap also exists on the number of Tier 2 (General) migrants. No similar issues exist for ICT migrants. A company can theoretically sponsor an unlimited number of ICT migrants and does not need to test the labour market.

Third party contracting

Migration Watch UK notes the main exploitation occurs when companies (often multinational IT companies) use ICT visas to contract out certain roles. Sponsored workers perform duties at third party companies. For example, a multinational IT company would sponsor an ICT migrant and that individual would then work at a different UK company under a service agreement between the sponsor and the third party company. In essence, the IT company sponsoring the individual is perceived as an intermediary or agency.

Are these ‘loopholes’ totally unchecked?

ICT sponsorship has specific rules. The minimum salary is £41,500 per year and most ICT migrants must have worked with the company for a period of at least 12 months. Third party work is restricted to a time-bound service or project – once ended, nobody else will continue it. ICT migrants cannot undertake an ongoing routine role and the sponsor company must retain full responsibility for deciding the duties, functions and outcomes of the job.

In theory, a company can sponsor an unlimited number of ICT migrants. In reality, this would require strong commercial justification and is ‘pre-assessed’ by the government before sponsorship occurs.

ICT migrants cannot settle in the UK on a permanent basis. Tier 2 (General) migrants are permitted to apply for Indefinite Leave to Remain in the UK after 5 years of continuous residence.

Conclusion

Multinational companies are using the ICT route to bring migrant workers to the UK, and contract them to third party companies. If multinational companies are using the ICT visa route as is permitted under the rules, there is no ‘loophole’. If, on the other hand, companies are going beyond the rules and acting in more of an agency capacity, they stand to face harsh penalties such as having their sponsor licences revoked as that is strictly prohibited. Again, there is no ‘loophole’.

Ultimately, the issue is not necessarily that the ICT visa is being exploited or that ‘loopholes’ exist. Rather, the effect of the ICT route (or at least part of what is permitted) is damaging to the UK labour market in the short term, as qualified residents are overlooked for UK roles for which they are absolutely qualified.

Squaring the circle is never easy and as the saying goes, something’s gotta give…