What is the change? The Home Office has revised the rules for Tier 2 skilled workers applying for settlement in the U.K. (also known as “indefinite leave to remain” or permanent residence), including introduction of a new minimum salary threshold and a redefinition of the qualifying period of residence and ongoing employment.

What does the change mean? The new minimum annual salary for Tier 2 skilled workers applying for settlement on or after April 6, 2016 will be £35,000. This minimum will increase annually over the next five years to ensure that settlement is only available for higher earners. However, exemptions are available for certain Ph.D. level occupations, shortage occupations, certificates of sponsorship assigned before April 6, 2011, and applicants in previously listed shortage occupations under certain circumstances who are considered valuable to the U.K. despite potentially lower salaries.

The new rules also clarify the definition of the required five years of continuous lawful presence for Tier 2 migrants before applying for settlement. In addition, the new rules require that the employer who issued the certificate of sponsorship must still hold a Tier 2 sponsor license and certify the migrant’s future employment and salary.

  • Implementation time frame: The new salary thresholds will apply beginning April 6, 2016.
  • Visas/permits affected: Indefinite leave to remain.
  • Who is affected: Tier 2 (General) visa holders applying for indefinite leave to remain.
  • Business impact: Companies should budget for the new salary thresholds that will rise again in 2018, 2019 and 2020.
  • Next steps: U.K. employers and foreign employees affected by the change may contact their BAL team to determine if an exemption from the salary thresholds applies.

Background: The concept of applying minimum salary thresholds to all Tier 2 settlement applicants was approved in 2012 and will be brought into force for all applications filed on or after the following dates:

April 6, 2016 – £35,000

April 6, 2018 – £35,500

April 6, 2019 – £35,800

April 6, 2020 – £36,200

Please note that the base annual salaries do not include allowances outside of the guaranteed salary package or other benefits or incentives.

BAL Analysis: Businesses should assess any current Tier 2 workers who are due to apply for settlement after April (due to accrual of five years of residence in the U.K.) and ensure that the upcoming minimum salary requirement can be met. Applications that do not meet the salary requirements will be rejected.

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

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