The cost of sponsoring Tier 2 migrant workers is set to rise significantly from 6 April 2017 with the start of the Immigration Skills Charge, designed to incentivise employers to focus recruitment and training efforts on UK workers.
What is the Immigration Skills Charge ('ISC')?
An up-front charge of £1,000 per year will apply in relation to each migrant worker sponsored under the Tier 2 General and Tier 2 Intra Company Transfer visa routes. This means employers face additional costs of up to £5,000 when looking to fill vacancies with Tier 2 migrant workers.
A reduced rate charge of £364 per year per certificate of sponsorship will apply for small or charitable organisations.
The ISC will be payable at the time employers assigns certificates of sponsorship (in addition to the normal fee, currently £199).
The ISC will not apply to:
- Tier 2 migrant workers who were sponsored before 6 April 2017 and are applying from inside the UK to extend their Tier 2 stay (either the same or a different sponsor);
- PhD-level roles;
- Tier 4 student visa holders who are switching to a Tier 2 (General) visa from within in the UK;
- Intra-company transfer graduate trainees;
- Dependents of Tier 2 migrant workers.
No exemption applies to roles on the shortage occupation list.
The ISC will be payable in addition to the Apprenticeship Levy, which comes into force at the same time.
Employers considering sponsoring a migrant worker under the Tier 2 route in the near future may wish to consider whether they can expedite the process in order to assign the certificate of sponsorship before 6 April.
We anticipate there will be an increase of applications in March 2017 and a corresponding delay in processing times, so plan accordingly.
Higher Minimum Salary Thresholds for Tier 2 Workers
From 6 April 2017, the minimum salary threshold for experienced workers applying for a Tier 2 (General) visa will be increased to £30,000. The minimum threshold for new entrants will remain at £20,800.
With a view to ensuring that multinational employers bring only senior manages and specialists to work in the UK, the Tier 2 ICT short term route will be closed from 6 April, meaning all applicants will need to meet a minimum salary requirement of £41,500. There is an exception for graduate trainees, who must meet a salary threshold of £23,000, a reduction of £1,800 from the current requirement.
Together with an increase in the number of graduate trainees employers can bring to the UK, from five to 20, this minimum salary reduction provides a welcome concession for employers amidst a range of changes which generally make it more expensive and challenging to fill labour shortages with migrant workers.
Other changes which are likely to be welcomed by some Tier 2 ICT sponsors are:
- the removal of the requirement for employees transferring to the UK to have at least 12 months' service with an overseas arm of the business if they are paid over £73,900; and
- a reduction in the 'high-earner' minimum salary which allowing ICT holders to work in the UK for between five and nine years from £155,300 to £120,000.
While April will bring a handful of welcome changes for employer-sponsors, the general theme is one of significant cost increases within the Tier 2 visa routes which some organisations fear will restrict them from being able to source suitably qualified and experienced specialists to fulfill immediate business needs and remain competitive in an increasingly uncertain market.