Home Office announces reforms to Tier 2 visas to reduce reliance on foreign workers

The Home Office yesterday announced reforms to Tier 2 visas, saying it was "to protect job opportunities for UK residents and reduce UK businesses' reliance on foreign workers."

Image credit: UK GovernmentThe reforms are a response to two reviews of Tier 2 policy by the independent Migration Advisory Committee (MAC).

The main changes announced yesterday include:

• Tier 2 (General) salary thresholds for experienced workers will be increased to £25,000 in autumn 2016, and £30,000 in April 2017. However, some health and education professionals will be exempt from the higher threshold until July 2019. The minimum threshold of £20,800 for new entrants will be maintained
• Tier 4 students switching to a Tier 2 visa will not be subject to a limit on numbers and their sponsor will not have to carry out a Resident Labour Market Test
• nurses will remain on the Shortage Occupation List, but sponsors will need to carry out a Resident Labour Market Test before recruiting a non-EEA nurse
• the current intra-company transfer provisions are being simplified by requiring all intra-company transferees to qualify under a single visa category with a minimum salary threshold of £41,500, with the exception of the graduate trainees
• the Immigration Skills Charge will be levied on Tier 2 employers at a rate of £1,000 per person per year from April 2017, with a rate of £364 for smaller businesses and charities, and an exemption for PhD occupations, Tier 2 (Intra-Company Transfer) Graduate Trainees and Tier 4 students switching to Tier 2
• the Immigration Rules for work categories will be simplified, making them easier for sponsors and applicants to understand and use

The changes will come into effect in two stages (autumn 2016 and April 2017) to ensure that businesses have time to prepare.

Minister of State for Immigration James Brokenshire announced the reforms in a written statement to the Commons, saying:

"I am today announcing reforms to Tier 2, the migration route for those undertaking skilled work in the UK, in response to the Migration Advisory Committee (MAC)'s review of Tier 2, and its separate review of whether nurses should remain on the Shortage Occupation List.

"For too long we have had a shortage of workers in certain roles, and in the past, it has been too easy for employers to recruit overseas. Last May, the Prime Minister set out our ambition to reform our immigration and labour market rules, and to reduce the demand for skilled migrant labour. The Government subsequently commissioned the independent MAC to advise on reducing economic migration from outside Europe. The MAC was asked to look at restricting skilled work visas to genuine skills shortages and highly specialist experts, raising Tier 2 salary thresholds to stop businesses using foreign workers to undercut wages, and a new immigration skills charge to invest in funding for training resident workers.

"The MAC published their report on 19 January. It sets out a balanced series of proposals that aim to strike a balance between reducing reliance on non-EEA skilled workers while also supporting growth and productivity. The Government intends to accept the majority of the MAC's recommendations.

"We will increase the Tier 2 minimum salary threshold to £30,000 for experienced workers. This change will be phased in, with the minimum threshold increased to £25,000 in autumn 2016 and to £30,000 in April 2017. The minimum threshold for new entrants will remain at £20,800.

"Reflecting ongoing public sector pay restraint and specific recruitment challenges in these occupations, we shall exempt nurses, medical radiographers, paramedics and secondary school teachers in mathematics, physics, chemistry, computer science and Mandarin from the new salary threshold. Where the occupation is not on the Shortage Occupation List, we shall also give extra weighting to these occupations in the monthly allocation of the Tier 2 (General) limit. Both measures will apply until July 2019. In line with the MAC's recommendations, nurses will remain on the Shortage Occupation List, but employers will need to carry out a resident labour market test before recruiting a non-EEA nurse.

"Employers will continue to be able to recruit non-EEA graduates of UK universities without first testing the resident labour market and without being subject to the annual limit on Tier 2 (General) places, which will remain at 20,700 places per year. Additionally, we shall give extra weighting within the Tier 2 (General) limit to businesses sponsoring overseas graduates, and will allow graduates to switch roles within a company once they have secured a permanent job at the end of their training programme. These changes will take effect from autumn 2016.

"From April 2017, there will be extra weighting within the Tier 2 (General) limit where the allocation of places is associated with the relocation of a high-value business to the UK or, potentially, supports an inward investment. We will also waive the resident labour market test for these applications.

"We will simplify and streamline the Tier 2 (Intra-Company Transfer) provisions in line with our international trade obligations to provide a route for senior managers and specialists. All intra-company transferees will be required to qualify under a single visa category with a minimum salary threshold of £41,500. The exception will be the Graduate Trainee category, where we shall reduce the current salary threshold from £24,800 to £23,000, and increase the number of trainees that an employer may bring to the UK from five to 20.

"There will be a transitional period until April 2017 to allow those affected to plan for the changes. In autumn 2016, we will close the Skills Transfer category to new applications and increase the minimum salary threshold for the Short Term category to £30,000. From April 2017, we will close the Short Term category to new applications.

"From autumn 2016, all intra-company transferees will be required to pay the Immigration Health Surcharge. We will review the extent to which allowances may be counted as salary to ensure we have appropriate safeguards in place against undercutting of the resident labour market and consider how to take forward the MAC's proposal for a review of skills in the IT sector.

"To provide some further flexibility within the streamlined intra-company transfer category, we shall lower the minimum salary threshold for intra-company transferees working in the UK for between five and nine years from £155,300 to £120,000. We will also remove the one year experience requirement for all applications where the worker is paid over £73,900. These changes will take effect from April 2017.

"There will be no change to the work rights of dependants of Tier 2 migrants.

"The MAC strongly supported the introduction of the Immigration Skills Charge to incentivise employers to reduce their reliance on migrant workers and to invest in training and up-skilling UK workers. The charge will be levied on Tier 2 employers at a rate of £1,000 per Certificate of Sponsorship per year. A reduced rate of £364 will apply to small and charitable sponsors, as defined by Immigration and Nationality (Fees) Regulations. PhD level occupations, the Intra Company Transfer Graduate Trainee category, and those switching from a Tier 4 student visa to a Tier 2 visa will be exempt.

"The Government intends to have completed implementation of these measures by April 2017. As part of the implementation process, we also intend to simplify the Immigration Rules and guidance for skilled workers coming to the United Kingdom, to make the system clearer and more user-friendly for employers and applicants."