Major changes coming to Tier 2 sponsors

IMPACT – HIGH

What is the change? The government has announced a series of amendments to the U.K.’s immigration rules impacting Tier 2 sponsors.

What does the change mean? The package of changes will generally increase flexibility for businesses, but new salary requirements for Tier 2 workers and maintenance increases across all categories will also raise the cost of business.

• Implementation timeframe: Maintenance changes will take effect July 1.
• Visas/permits affected: Points-Based System applications, particularly Tier 2 skilled workers.
• Who is affected: Companies requiring Tier 2 skilled workers.
• Impact on processing times: None; impact is on qualification requirements.
• Business impact: Higher base costs for Tier 2 workers.

Background: The U.K. government is creating a package of changes to Points-Based System work routes, to improve flexibility for sponsors and applicants and boost the U.K. economy. In this alert we focus on Tier 2, but further updates will be published relating to Tiers 1, 4 and 5.

The main changes to Tier 2 are that Intra-company transfers and Tier 2 (general) applicants will be granted up to five years leave at a time (rather than the current maximum of three years). Employers will pay a higher government fee for the longer duration, but they will not have to apply for extensions as often.

The government has updated minimum salary thresholds as follows:

BAL Analysis: The Tier 2 changes that corporate clients will be most interested in is the possibility of paying a higher initial fee to secure a one off five-year visa for Tier 2 (general) employees who intend to settle, or for Tier 2 ICTs who intend to stay on assignment for the maximum five-year period before “cooling off” outside the U.K. They should also be aware that salaries they have historically used to support Tier 2 visas may be out of line with new Standard Occupation Classification (SOC) codes and the revised minimum salaries. Employers may need to revise salary packages for future assignees and new hires accordingly.

This alert has been provided by the BAL Global Practice group in the United Kingdom. For additional information, please contact uk@bal.com.

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