The government is due to respond imminently to the Migration Advisory Committee’s (MAC) announcement on the Tier 2 visa route for non-EU skilled workers. The list of recommendations, designed to support the government’s aim of stemming the increasing flow of migrants to the UK while prioritising high value skills, has been met with mixed reactions from UK firms.
As the main route for economic migration to the UK, Tier 2 is divided into four streams: general, intra-company transfer (ICT), religious ministers and sportspeople. It is the first two that will be affected by the recommendations, which if implemented – and it is broadly felt that they will be – will take effect from 6 April this year.
The recommendations focus on cost as the key to curbing recruitment from outside the EU. They include increasing minimum salary thresholds, introducing an Immigration Skills Charge (with a suggested rate of £1,000 per year per employee), and a restructuring of the ICT route as well as expanding the existing health surcharge to include ICT employees.
Minimum salary thresholds will increase from £20,800 to £30,000 for experienced workers and to £23,000 for graduates. Implementation of the threshold for public sector workers will be phased.
The big shock is proposals for the ICT route, where third-party contracting – heavily used by the IT sector – will assume its own category, with its minimum salary threshold bumped up from £24,800 to £41,500, in line with the main ICT route.
Additionally, required prior experience with the employer will increase from 12 to 24 months, with employers having to submit, along with their applications, detailed descriptions of specific skills they will gain from bringing the individual to the UK.
“This could be very awkward for some employers,” says law firm Migrate UK managing director Jonathan Beech. “There will be employees who have already been lined up to start in the UK after April but have been with the company for less than two years, for example. And unless their application is completed and paid for by 5 April they will no longer qualify.”
Beech says those responsible for making applications must make sure they are aware of any employees lined up to transfer via ICT, and get the paperwork done now to avoid potentially costly contract cancellations in case criteria are not met.
Partner at law firm Kingsley Napley Ilda de Sousa warns that as well as getting on top of processes quickly HR managers and directors will need to pay close attention to compliance.
“We think the Home Office will be looking much more closely at compliance in future. HR will have to really understand its responsibilities and liabilities particularly where it is responsible for right to work checks,” she says.
The MAC also recommends that the Resident Labour Market Test (RLMT) is expanded to include those already living in the UK and wanting to switch to Tier 2, a route commonly used by graduates. Additionally it suggests the RLMT could be considered for the ICT route.
“There’s nothing stopping employers putting down a list of requirements on the advert that only their own staff could know,” Beech points out. “It’s just going to be another long-winded, expensive exercise for companies.”
He believes the recommendations will frustrate many employers and that skills shortages could be exacerbated where businesses have to carry out the RLMT. This is because applicants, especially graduates, may be put off.
Charlotte Holloway, head of policy at UK technology trade body TechUK, highlights minimum salary threshold, particularly for students, as a real problem area for tech companies.
“We are hearing a lot from start-ups who will potentially be affected by this, because their employment offers aren’t always about the money – they include other benefits.”
De Sousa agrees and says that one client has stated it will offset the impact of the skills charge on non-EU recruits by making local cutbacks in the UK. Other UK businesses unable to fund the salary threshold, she says, may downscale and set up elsewhere.
“Banks and law firms would welcome the salary threshold because they already pay above the market rate, but an architect may not. You can’t have a blanket provision, it must be considered sector by sector,” she states.
It is a point backed by NHS Employers chief executive Danny Mortimer, who says there is a “real danger in using salary level as the prime determinant of whether the country needs skills”.
“There has to be a more nuanced assessment of the skills the country needs, and the provision of healthcare is a fundamental part of the economic wellbeing of the whole country,” he says.
While the government agreed to temporarily put nurses on the Shortage Occupation List in October 2015 if it does not agree to various calls to make this a longer-term solution the impact of the proposed changes would be crippling, according to Bev Edgar, HR director at Abertawe Bro Morgannwg University Health Board.
“I plan to bring 450 nurses to Wales from the Philippines in the autumn. If we find we have restrictions I will have a massive gap in my workforce,” she explains. “And with the EU drying up we would have to rely on bank and agency nurses again, which has huge implications for patient continuity, training and teamwork.”
Edgar says the real concern would be the minimum salary threshold, which if applied to the NHS would affect both nurses and doctors.
The CIPD’s public policy adviser Gerwyn Davies says that while he wants to see a greater degree of flexibility, particularly for the public sector and in certain geographical areas, he believes the recommendations are modest and strike “a fair balance between the need to cut immigration and maintain productivity at existing levels”.
Davies applauds the MAC’s decision not to propose the ‘sunsetting’ of jobs on the Shortage Occupation List and to retain Tier 2 dependants’ automatic right to work.
However, the CIPD doesn’t believe that the measures will have the desired effect of boosting training levels in the UK. “Our research shows employers are using every avenue to recruit and train their staff to offset these restrictions,” he says.
Employing non-EU migrants will continue to get tougher, he adds. He points out that Tier 2 recruitment issues only apply to a small proportion of people, so the key now is to focus on the medium term and invest in training to address skills gaps.