The following alert is directed to organizations with a presence in the UK or who anticipate the need to place talent at a UK work site.

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The Migration Advisory Committee (“MAC”) has published its recommendations following an in-depth review of Tier 2, which is the primary route for economic migration to the UK. The MAC is an independent advisory body commissioned by the Government to undertake this wide-ranging review, with the aim of recommending proposals to substantially restrict the volume of migration to the UK under this route.

In the past, the Government has implemented most of the MAC’s proposals. Therefore, employers should be prepared for these changes to be introduced in April. The main theme throughout the report is that in order to achieve the Government’s aim to reduce migration to the UK, “price should be the main mechanism.”

The following is a summary of the proposals: 

  • Increase the minimum annual salary threshold to £30,000 for the Tier 2 General and Tier 2 Intra-Company Transfer (ICT) Short Term routes.
  • For new entrants within Tier 2 General and Tier 2 Graduate Trainee, a lower threshold should be set at £23,000.
  • Employers should be required to pay an Immigration Skills Charge upfront for each Tier 2 application (except Graduate Trainees) of £1,000 per year.
  • Tier 2 ICT Long and Short term migrants should be required to have two years of previous experience, rather than one year under the current rules. 
  • Sponsors should be required to provide a more detailed description of the role to be undertaken in the UK to ensure that it is sufficiently specialized. 
  • Tier 2 ICT migrants, and family members, should be subject to the Immigration Health Surcharge which is £200 per year
  • A new Tier 2 ICT route should be created for third-party contractors with a minimum salary level of £41,500. 
  • All in-country applicants (other than shortage occupations) should be subject to the resident labour market test and included in the monthly Certificate of Sponsorship quota. This would apply, for example, to Tier 4 students who are currently exempt from the advertising requirement.
  • The automatic right to work for the dependents of Tier 2 migrants should be retained.

The proposals are generally positive. Although the cost of employing Tier 2 migrants in the UK is likely to increase, significant restrictions in terms of skills criteria or shortage occupations are unlikely to be introduced. The increase in the qualifying period from one to two years for Tier 2 ICT Long and Short term migrants would require additional forward-planning by sponsors, as would the need to advertise the role for in-country changes of status applications. The recommendation to retain the right for dependents to work in the UK is welcome.

What does this mean for employers?

The Government is now considering the proposals presented by the MAC. If the changes are introduced, the primary impact on employers will be the increased cost of employing Tier 2 migrants in the UK. This is a step toward restricting Tier 2 to the “higher value, highly specialized” experts and shifting the focus to upskilling the resident labor market. We expect the Government to confirm the specific details of the changes by March, with implementation to take effect in early April.