Tier 2 category reforms set to take effect soon

IMPACT – MEDIUM

What is the change? The United Kingdom is expected to implement a number of changes to Tier 2 skilled worker visa categories this fall, including increasing the Tier 2 (General) salary to £25,000, phasing out the Skills Transfer sub-category as part of a broader overhaul of the Tier 2 (ICT) category, applying the immigration health surcharge to all intracompany transfers and giving extra weight to overseas graduates within the Tier 2 (General) quota.

What does the change mean? The reforms were announced in March and are the first phase of changes to the Tier 2 categories, with additional changes expected to be implemented in April and July of 2017. No exact implementation date has been set, but once the changes go into effect, they will raise costs for employers sponsoring employees and intracompany transfers under the Tier 2 route. Businesses that will be impacted should begin preparing now.

• Implementation time frame: 
• Visas/permits affected: Tier 2 (General) and Tier 2 (ICT).
• Who is affected: Employers sponsoring non-EEA employees and assignees in the categories listed above.
• Business impact:The reforms aim to limit migration primarily by raising costs in the form of higher minimum salaries and through implementing new charges in the Tier 2 system, including application of the immigration health surcharge to all intracompany transfers.
• Next steps: The Home Office is expected to announce an implementation date soon.

Background: The Home Office announced the changes in Marchafter receiving recommendations from the Migration Advisory Committee, an independent body that advises the government on immigration. Among key changes that are due take effect this fall:

• The Tier 2 (General) salary threshold will increase to £25,000. Exemptions will be provided for nurses, medical radiographers, paramedics, and secondary school teachers in mathematics, physics, chemistry, computer science and Mandarin. The threshold for new graduates will remain £20,800.
• The Skills Transfer sub-category will close to new applications as part of a broader overhaul of the Tier 2 (ICT) category.
• The Short-Term ICT sub-category salary threshold will be raised to £30,000.
• The immigration health surcharge will be applied to all intracompany transfers.
• Extra weight will be given to overseas graduates within the Tier 2 (General) quota.
• In-country graduates in the Tier 2 (General) quota will be allowed to switch roles within a company after securing a permanent job at the end of their training program.

Additional changes will be implemented in 2017. It remains to be seen when, exactly, the autumn changes will be implemented and whether there will be additional changes besides those that were announced in March.
BAL Analysis: The changes the Home Office announced earlier this year will increase costs for a number of U.K. businesses. Employers should work with their BAL team to prepare for the changes this fall and next year. BAL will continue to follow events in the U.K. and provide notice to clients when firm implementation dates are announced.

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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