IMPACT – HIGH

What is the change? The Home Office has released a statement of changes to the Immigration Rules covering nearly all U.K. immigration categories.

What does the change mean? Among the changes, there are new rules and criteria for Tier 2 and Tier 1 categories under the points-based system and an expansion of permitted activities under Business Visitor visas.

  • Implementation timeframe:The various changes become effective Oct. 20, Nov. 6 and Dec. 1 of 2014, and Jan. 1, 2015.
  • Visas/permits affected: The rules cover all visa categories under the points-based system.
  • Who is affected: Companies and foreign nationalsworking in the U.K. and family members.
  • Impact on processing times: The changes reflect qualifications for visas, not overall processing methods or timing.
  • Business impact: Corporate employers will be impacted most heavily in relation to Tier 2 and the tightening of Resident Labor Market testing.

Background: The U.K. Immigration Rules have undergone sweeping changes across all immigration categories, as well as on cross-cutting issues such as replacing appeal rights with administrative review (as set up by the Immigration Act 2014). We have summarized the changes most relevant to corporate employers below.

TIER 2 CHANGES:

  1. Tier 2 (General):Applications will be assessed on whether a “genuine vacancy” exists. Extension applications will be exempt from the Resident Labour Market Test where the applicant is continuing to work in the same job for the same sponsor. This applies if their previous leave as a Tier 2 (General) worker expired no more than 28 days before their extension application. The minimum salary of £20,500 can no longer be waived for companies reducing hours to avoid redundancies (layoffs). National Health Service positions will continue to be exempt until April 6, 2015 from the requirement to advertise via Jobcentre plus. (The rule was due to expire Oct. 1, 2014.)
  2. Tier 2 (Intra-Company Transfer):Applications will be assessed on whether a “genuine vacancy” exists. The rules will also correct a drafting error regarding how time spent in the ICT category is counted toward the maximum six years that applicants may spend in other Tier 2 categories.

BUSINESS VISITORS:

Business Visitor visas will permit new activities as long as the individual remains paid and employed overseas. The new activities are:

  1. Scientists and researchers are permitted to share knowledge, expertise and advice on international projects led by the U.K., unless the visitor is carrying out research that should be categorized under Tier 5 (Temporary Worker) or Tier 2 (Skilled Worker).
  2. Overseas lawyers who are employees of international law firms that have offices in the U.K. may provide direct advice to clients in the U.K. on litigation or international transactions as long as they remain paid and employed overseas.
  3. Graduates of overseas nursing schools may sit for the Objective Structured Clinical Examination in the U.K. on a Business Visitor Visa. The exam is required before a foreign nurse can work in the U.K. under the Tier 2 route.

TIER 1 CHANGES:

  1. Exceptional Talent.The duration of this category will be changed from the current three years to five years. English language proficiency will no longer be a requirement for extensions of this visa. The rules also modify criteria by individual industry bodies for endorsement of applicants.
  2. Investor. The minimum investment threshold will be doubled from the current £1 million to £2 million and 100 percent of the sum must be invested in qualifying instruments. Investors will no longer need to “top up” investments that fall below the minimum. The required investment may no longer be sourced as a loan.
  3. Entrepreneur.Applicants applying within the U.K. must show that the funds that will be invested in the business are in the U.K. Applicants for indefinite leave to remain must show that they have invested the funds if they have not done so in an earlier application. This will apply to those seeking accelerated indefinite leave to remain who have not applied previously for an extension.
  4. General category (now closed).Some changes to the grant periods will allow applicants to accrue five years in the category before it closes and thereafter qualify for settlement. The Home Office will assess these changes after all extension applications are processed after April 2015.

BAL Analysis: The new law encompasses a multitude of changes across the board. The changes to the Tier 2 category will have the biggest impact for corporate employers, who use this to move their global workforce. The Home Office’s intent to strengthen the Resident Labour Market Test and require that employers conduct a “genuine” search for a “genuine” role means employers should be very careful regarding recruitment practices as well as “overmanaging” any Tier 2 visa process. The language introduces a further level of subjectivity into the decision-making process in what should be an objective points-based system.

The changes to the Business Visitor category show a broadening of the category. We anticipate deep levels of change over the coming year to bring business visitor rules further in line with commercial realities.

Changes to the Tier 1 routes for the most skilled/valuable migrants to the U.K. are broadly welcome. The Exceptional Talent category is so tight in its definition of success that it does not form a realistic route for globally mobile professionals – the changes arguably do not go far enough to make this a meaningful immigration option. The increase in investment under the Investor category was widely anticipated, given that the amount has not increased in the last 10 years. An increase to £1.6 million would have been the level of inflation, but the increase to £2 million is legitimate, as are reforms to make investment in the U.K. clearer. The Entrepreneur category has been highly subscribed and so changes to clarify where monies are held will prevent further perceived abuse.

BAL is closely following the changes and will provide detailed analysis of these and other important changes in subsequent news alerts.

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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