Earlier this month, the Home Office introduced a suite of changes to the Immigration Rules and associated Policy Guidance in respect of Tier 2. For many employers, the most notable of these changes is the Immigration Skills Charge, which we reported on last month. However, there are a number of other changes which employers should be aware of. We cover these in detail here, along with their implications for current and potential sponsors of migrant workers. These changes all took effect from 6 April 2017.

New exemption from Resident Labour Market Test

Sponsors no longer need to carry out a resident labour market test for migrants who will be brought to the UK in connection with the relocation of a high-value business to the UK or a new inward investment project. The following are required for the exemption to apply:

  • the investment is made by the sponsor or an overseas company of which the sponsor is a registered branch or wholly-owned subsidiary;
  • the relocation/investment involves new capital expenditure of £27 million or the creation of at least 21 new UK jobs; and
  • the sponsor has been registered with Companies House no earlier than 3 years before the relevant CoS is assigned.

This is a helpful waiver for overseas businesses wishing to relocate staff or to invest in the UK, and for which the intra-company transfer category might not be available (e.g. due to shorter service on the part of the migrants).

Changes to Intra-Company Transfer category

The following changes have been made to the Tier 2 (ICT) category:

  • Migrants in the Tier 2 (ICT) category who are "high-earners" can stay in this route for up to nine years, rather than five years as previously. The "high-earner" threshold for these purposes has also been reduced from £155,300 to £120,000.
  • The requirement for migrants in this category to have been employed for 12 months with the overseas entity has been disapplied for those earning £73,900 or above.
  • The Short-Term Staff subcategory within the Tier 2 (ICT) category has been closed. Migrants must now qualify in a single Long-Term Staff subcategory, with a salary threshold of £41,500.

The above changes are welcome for those wishing to sponsor higher-paid migrants in this category for longer periods. However, it will be more expensive to sponsor migrants for shorter-term assignments and sponsors may, therefore, wish to consider alternatives for very short-term assignments. For example, some shorter-term assignments can be brought within the permitted intra-corporate activities under the visitor rules, provided that the relevant migrants can evidence that they are in the UK on a strictly temporary basis and will leave at the end of their assignment.

It is worth noting further that the Immigration Healthcare Surcharge has been introduced for the Tier 2 (ICT) category.

New minimum salary rate and high-earner threshold for Tier 2 (General)

It remains the case that sponsors do not need to conduct a resident labour market test in respect of high earners in the Tier 2 (General) category. However, the high-earner threshold has increased from £155,300 to £159,600.

The minimum salary rate for experienced workers in Tier 2 (General) has also increased from £25,000 to £30,000. However, these minimum rates will be frozen in respect of certain healthcare and education positions until 2019.

Priority change of circumstance sponsorship service

In addition to the above legal changes, it is worth noting the below service change recently announced by the Home Office, which will be welcome news to sponsors and Level 1 users.

The Home Office recently introduced a priority change of circumstances service for requests made via the Sponsorship Management System. This is used for expediting in-year requests for certificates of sponsorship or change of circumstances requests (such as adding a Level 1 user or replacing an Authorising Officer). Requests expedited using the service are considered and an outcome delivered within 5 working days (as opposed to the service standard of 18 weeks). This was first introduced as a pilot service and many of our clients experienced significant difficulties with it due to the very limited number of daily allocation slots. As of April 2017, an increased service will operate. This will assist Authorising Officers making urgent in-year applications for certificates of sponsorship where these are needed to complete a visa application in a short timeframe.

Please do not hesitate to get in touch if you would like to discuss any of the above changes with us in more detail. Full details of the legal changes can be found in the Home Office Statement of Changes HC1078.

Key Contacts

Sarah Harrop

Sarah Harrop

Partner, Employment & Immigration

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