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In a letter to the Migration Advisory Committee (MAC) last week, Berry Appleman & Leiden LLP (BAL) and the Global Immigration Benchmarking Association (IBA) submitted comments and recommendations detailing how the U.K. government’s proposed restrictions on Tier 2 skilled migration routes would impact economic growth and job creation in the U.K.
The comments were submitted in response to the MAC’s call for evidence from business organizations and other stakeholders. The U.K. government has asked the MAC to gather evidence and report its recommendations on changes to the Tier 2 (General) and Tier 2 (Intra-company Transfer) routes by the end of the year.
The IBA, an association of in-house professionals advocating pro-growth global immigration policies, consulted with a number of companies regarding the MAC’s call for evidence. BAL, a global corporate immigration law firm that represents the leading companies in almost every industry, leveraged its extensive experience in government advocacy to support IBA’s submission.
The comments submitted by IBA are summarized as follows:
A spouse’s ability to seek employment is a critical factor in a high-skilled migrant’s decision to bring his or her talent to the U.K. as it has a profound impact on a migrant’s ability to integrate and assimilate into a new community. The government’s proposal to eliminate this benefit would make the U.K. a less attractive destination compared to other countries, which are trending in the opposite direction by affording spouses the right to work.
Reducing the number of migrants to the tens of thousands would cause the country’s GDP to decline by 11 percent and require an offsetting increase in the labor income tax rate, according to a recent report. Technology allows multinational companies to move or shift operations to access the best talent. If Tier 2 routes were restricted, companies operating in the U.K. would likely consider relocating, causing heavy losses to the U.K.’s economy.
Further, the current cap of 20,700 on Tier 2 (General) visas is unlikely to satisfy the growing demand for high-skilled labor. Because the monthly quotas have been reached in recent months, the government should take this opportunity to increase the annual cap or allow for the ceiling to adjust based on market demand.
The Tier 2 (Intra-company Transfer) route allows U.K. companies to transfer skills and knowledge among its employees, promote career progression and maintain connectivity throughout the business. New restrictions or per-company caps on ICTs would hit start-up companies especially hard by stifling their ability to grow and transfer employees to the U.K.
A record number of start-ups were created in the U.K. in 2014 and even more (600,000) are expected in 2015. Start-ups and rapidly growing companies rely on ICTs to bring knowledge of company systems to train new U.K. employees. Placing a cap on ICTs or otherwise tightening the ICT route would deter companies from forming and creating jobs in the U.K.
The Resident Labour Market Test (RLMT) should be modernized to reflect today’s recruitment environment, including use of online, industry-specific job ads, to ensure that job openings are broadly transmitted. Employers should be allowed to submit their recruitment practices for pre-approval and, once approved, they should not need to undergo a secondary RLMT.
The government should allow employers to recruit the best candidate for the job – rather than merely a “suitable” candidate – regardless of nationality. Imposing a recruiting and hiring standard that does not match real-world practices will deter companies from operating in the U.K.
The Shortage Occupations List should be updated more frequently to reflect the labor market, but should not be the sole means of determining whether a shortage exists and should continue to be used with the RLMT.
The MAC’s public comment period ended Sept. 25. Its recommendations to the government on Tier 2 reforms is expected by mid-December. BAL is closely following this matter and will report further developments on these important issues.
Copyright © 2016 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.
IMPACT – MEDIUM
What is the change? Immigration Rules published Sept. 17 adopt the Home Office’s proposed changes to add smaller salary bands within the points table and to allow unused Certificates of Sponsorship (CoS) to be reclaimed after three months and put back into the pot. The changes allow more effective operation of the monthly allocation cycle for Restricted Certificates of Sponsorship (RCoS).
What does the change mean? These new rules apply to decisions made on or after Oct. 12 (i.e., for RCoS requests submitted by Oct. 5) and should have a positive impact on the number of Tier 2 RCoS’s allocated in October and thereafter. The changes should allow the Home Office to maximize the allocation of Tier 2 visas every month and clear the backlog created over the last four months, while leaving in place the annual limit of 20,700.
Background: The rules were announced earlier this month as provisional, and have now been finalized. The changes introduce smaller salary ranges within the points-awarding table that is used to determine whether Tier 2 RCoS’s are granted or rejected. Points are awarded for the type of job and additional points are granted for shortage occupations, Ph.D.-level roles (as a priority) and thereafter for the salary offered (the higher the salary, the greater the likelihood of receiving an RCoS). Under current rules (set for change on Oct. 12), when the monthly cap is exceeded by more than 100 applications, large numbers of applications may be refused even if there is room within the monthly limit because U.K. Visas and Immigration must refuse applications scoring the same number of points at the relevant level in order to treat all applications equally. The greater number of salary bands will allow greater flexibility.
The rules will also allow the secretary of state to reclaim unused RCoS’s before they expire (after three months) and return them to the limit, so that all RCoS’s that are allocated are actually used.
The new salary table may be viewed here.
BAL Analysis: Tier 2 employees in the lower salary ranges should have better chances of obtaining a slot in October’s allocations. The Home Office noted earlier this month that if the rules are adopted, the UKVI may need to make changes to its computer systems, which could delay the opening of the panel by a few days. BAL will keep clients updated on a case-by-case basis.
This alert has been provided by the BAL Global Practice group in the United Kingdom. For additional information, please contact uk@bal.com.
What is the change? The monthly cap for Tier 2 Restricted Certificates of Sponsorship (RCoS) has been surpassed for the fourth consecutive month.
What does the change mean? While the monthly quota was surpassed once again, minimum salaries for successful applicants were down significantly in August and September compared to June and July. This suggests that the spike in demand over the summer is abating. While this news is welcome, the U.K.’s Migration Advisory Committee (MAC) is in the midst of considering wide-ranging changes to skilled-migration policies, including raising salary thresholds and limiting Tier 2 to genuine skills shortages and “highly specialist experts.” Such changes could make the Tier 2 route significantly more limited.
Background: September marked the fourth straight month that the monthly cap on Tier 2 RCoS work visas was exceeded.
The annual quota is 20,700 with visas allocated on a monthly basis. The quota was exceed for the first time in June and was exceeded in each of the following three months. Minimum salaries and the number of required points for successful applicants, however, were down in August and September compared to June and July.
The Home Office moved to address the recent oversubscription this month by announcing that it would introduce a greater range of salary bands within the points-awarding table. The changes have not taken effect yet, but are aimed at maximizing the number of places that can be allocated each month. They are a welcome step toward providing some flexibility and reducing the backlogs in applications. It also appears that based on the minimum salaries for successful applicants in the past two months, backlogs may soon be cleared.
That said, employers should note that the changes MAC is considering could impose significant restrictions on the Tier 2 route. The MAC is soliciting public comments until Sept. 25 and is expected to issue a report in mid-December.
BAL Analysis: Employers should work closely with their BAL professional on individual Tier 2 RCoS work visa applications. Longer onboarding times for Tier 2 migrants with lower salaries should be expected, even with the drops in minimum salaries in August and September. As for the MAC proposals, BAL is working with clients and associations interested in offering comments or recommendations. Please contact the BAL professionals whom you work with on a regular basis with any questions.
IMPACT – HIGH
The Migration Advisory Committee (MAC) is soliciting public comments until Sept. 25 from employers and other stakeholders on potentially wide-ranging changes to government policies on skilled migration.
The U.K. Home Office asked the MAC, an organization made up of senior economists and researchers, to conduct a thorough review of the Tier 2 route with a view toward restricting it to allow fewer migrants into the U.K., and to provide its recommendations before the end of the year. Since significant contraction of business migration routes is a genuine possibility, employer evidence is sought as a matter of urgency.
The MAC has been asked to consider the impact of:
The committee will issue its report in mid-December, after which the government will take action. If the government imposes significant restrictions on the Tier 2 route, employers will face a much harsher environment in which to sponsor both intra-company transferees and local hires.
Background: The sitting government has a long-term agenda to reduce net U.K. immigration from the hundreds of thousands to the tens of thousands. Given the government’s clear intention to stem the reliance on migration to fill U.K. skills shortages, some restrictions on the Tier 2 category for employers and skilled workers appear inevitable; the scope and type of restrictions are still being debated and businesses are encouraged to participate.
The committee has already provided an initial analysis of Tier 2 salaries, published on Aug. 13, weighing the rationale for raising the threshold against the impact on migration, the U.K. economy, and labor and business interests, but the remaining proposals remain open for discussion.
BAL Analysis: The MAC’s call for evidence contains a detailed list of questions on which the committee is seeking feedback. Companies have the option of responding to any or all of the questions directly to the committee in whatever format is convenient. BAL is working with clients and associations regarding the call for evidence. If your company is interested in participating or contributing to those discussions, please contact the BAL professionals whom you work with on a regular basis.
What is the change? A new Immigration Bill anticipated this fall would subject migrants working illegally in England or Wales to imprisonment and wage garnishment, while providing increased penalties for employers and landlords who fail to properly check the immigration status of employees or tenants.
What does the change mean? While the impact on corporate employers of changes regarding illegal migrants may not be direct, the proposals are reflective of the U.K. government’s ever tougher attitude on immigration and its commitment to get immigration “under control,” even at a high cost.
Background: While details of the Bill have not yet been published, statements from the Home Office in August indicate that it will include strict new measures. Under the Bill, anyone working illegally in England or Wales could face up to six months in prison, have their wages seized and face unlimited fines. The Bill would also make it easier to prosecute employers who know or reasonably suspect that an employee does not have permission to work in the U.K. The maximum sentence for employers found to violate this offense would increase from two years’ to five years’ imprisonment.
The Department for Communities and Local Government announced earlier in August that the legislation would enable landlords in England to more easily evict tenants in the country illegally and to do so without a court order in some cases. Landlords who repeatedly fail to conduct “right to rent” checks (introduced as a concept by the Immigration Act 2014 and recently trialed in the West Midlands) would face fines and up to five years’ imprisonment.
BAL Analysis: Migration to the U.K. is currently under intense political scrutiny, and the new Conservative government appears set to take more radical steps to both crack down on illegal migration and curb net legal migration.
Despite a long-standing pledge by the Conservatives to slash net migration “from the hundreds of thousands to the tens of thousands,” the Office of National Statistics announced in August that net migration reached an all-time high of 330,000 for the 12-month period that ended in March 2015 – a sign that policy initiatives taken over the life of the last coalition government were not sufficiently effective.
Cameron’s government has taken a hard line as it deals with the political fallout from high net migration numbers and the ongoing EU refugee crisis that sees scores of migrants crossing the Mediterranean and seeking to enter the U.K. via Calais. The anticipated Bill, coming less than a year after the Immigration Act 2014 took effect, would make the U.K. an ever more hostile environment for undocumented migrants.
BAL will continue to follow the Immigration Bill as it goes to parliament this quarter and will provide updates on significant developments as they relate to our clients.
What is the change? To address recent oversubscription of Tier 2 Restricted Certificate of Sponsorship (RCoS) requests, the Home Office announced today that it is changing the system of prioritizing these requests. The agency is introducing a greater range of salary bands within the points-awarding table, with an aim to maximize the number of places that can be allocated each month within the overall annual limit of 20,700.
What does the change mean? The change is intended to maximize the number of RCoS requests allocated per month. If the limit is oversubscribed, as has been the case in each of the past three months, applications for RCoS are prioritized according to a points table. The available certificates are allocated based on the highest points scored. Points are awarded based on whether the job is in a shortage occupation or Ph.D.-level occupation and the salary on offer. Under the existing regime, the salary bands have been too wide and, as a result, occupations paying between £32,000 and £45,999.99 all score 15 points for salary. The Home Office has increased the number of salary bands in the points table to provide greater flexibility to non-shortage occupations at lower salary levels to be able to reach the minimum number of points for approval.
Details: The revisions to the points table are provided below.
Additional changes:
In order to implement the new salary table, the Home Office says it will need to make changes to its IT systems, which could delay the opening of the November panel by a few days. The agency will communicate further details closer to that time.
In another change, RCoS’s that are not used within three months will be returned to the quota (rather than expire), thus increasing the number that will be available annually.
BAL Analysis: This is a welcome step that hopefully will provide some flexibility and relieve the logjam of applications, especially during the busy summer season when graduate recruiting adds to the pressure on quota numbers. However, in the short term, employers should note that the Home Office is predicting delays in applications submitted in the November panel due to implementation of the new system.
IMPACT – LOW
What is the change? Responding to high demand, the U.K. Consulate in New York is making more appointments available for visa applicants opting for same-day “Super Priority” service.
What does the change mean? The increased number of appointment slots per day is intended to relieve the wait times to book an appointment, currently four weeks.
Background: Since its launch in New York in March, the flexible but pricey 24-hour Super Priority visa service has proven popular. For additional government fees, travelers can appear in person in New York, complete their biometrics at the consulate and receive visa service within 24 hours.
BAL Analysis: The additional time slots should help relieve the logjam, but appointments are likely to fill quickly and applicants selecting this service should consider the lead time needed to book an appointment.
What is the change? The monthly cap for Tier 2 Restricted Certificates of Sponsorship has been surpassed for the third consecutive month.
What does the change mean? While the monthly quota was once again reached in August, the minimum salary for successful applicants dropped to £24,000 per year (36 points). This seems to suggest that the backlog of candidates earning lower salaries may begin to be cleared in the coming months. Experts predict, however, that the cap will again be reached in September.
Background: The annual quota for certificates of sponsorship is 20,700 and is allocated on a monthly basis, with 2,250 set aside for April and 1,650 reserved for all other months. The quota was exceeded for the first time in June and then again in July. While the quota was once again surpassed in August, the minimum salaries and number of points required for successful applicants continued to drop.
The lower minimum salary marks an improvement compared to June and July, but U.K. authorities pulled 71 certificates from September’s allocation in order to help meet demand in August. That means that it is highly likely that the cap will again be exceeded in September.
BAL Analysis: Employers should work closely with their BAL attorney to understand the likely waiting time for individual applications. Employers should anticipate longer onboarding times for Tier 2 migrants with lower salaries, even given the drop in the minimum salary in August.
The Migration Advisory Committee has published a report on Tier 2 salary thresholds and their impact on the U.K. labor market in advance of a larger study to be completed by the end of the year.
The committee, a nongovernmental body of economists and migration experts, was asked to advise the U.K. government on whether salary thresholds for Tier 2 categories should be raised from their current levels of £20,800 (General), £24,800 (Short-term ICT) and £41,500 (Long-term ICT), and whether occupation-specific salary thresholds should also be hiked.
The report’s initial finding is that Tier 2 salary thresholds do not appear to undercut the U.K. labor market, based on a comparison of Tier 2 salaries against domestic salaries.
“Our analysis suggests that if there is undercutting within Tier 2 it is isolated rather than widespread practice,” the report said. However, the group cautioned that this finding is “preliminary and tentative” and it will be conducting more research in the coming months.
The committee made several findings on the impact that raising the thresholds to various salary levels would have on business and workers. It also reported on the competing policy interests of reducing non-EU skilled migration, putting upward pressure on wages, and managing business costs. The report, however, did not make any recommendations.
On raising the Tier 2 (General) salary threshold, the committee said that if the same principles used to set the current salary threshold at £20,800 were applied today, based on skill requirements, the Tier 2 salary threshold would be raised to between £31,000 and £39,000. However, the report noted that “there is little doubt that an immediate introduction of a salary threshold at this level would be strongly opposed by many employers and would cause serious problems in certain sectors.” It added that under the current prioritization system, Tier 2 (General) restricted CoS salaries already fall within that range.
An increase in the threshold to £25,000 would impact approximately 7 percent of all Tier 2 applicants, with a larger impact on in-country Tier 2 (General) applicants and a negligible impact on ICTs. However, a bigger jump in the Tier 2 threshold to £40,000 would affect 44 percent of all Tier 2 applicants, with the largest impact hitting 65 percent of Tier 2 (General) in-country applicants and 55 percent of short-term ICTs. In order to have an impact on long-term ICTs, the threshold would have to be increased to £50,000, which would affect 27 percent of the category.
New entrants to the labor market would feel the biggest impact of a higher Tier 2 salary threshold: The report concluded that a £40,000 threshold would affect 77 percent of new entrants through Tier 2 (General) and 57 percent of new entrants through the short-term ICT category. Business stakeholders have expressed concern that an increase would impact graduate schemes and international students.
An increase to the occupation-specific salary thresholds would have a significant impact across Tier 2 categories. If set at the median salary level for each occupation, 40 percent of all Tier 2 applications would be affected. A threshold set at a higher level at the 75th percentile of occupation-specific salaries would affect 60 percent of all Tier 2 applicants.
BAL Analysis: The initial findings of the MAC indicate that salary levels for skilled Tier 2 workers should not be raised because, overall, they are in line or higher than local labor market salaries and confirm that hikes to Tier 2 salary thresholds would have a significant impact on skilled migrants.
What is the change? The U.K. is rolling out requirements that long-term visa applicants obtain police clearances for every country they have lived in during the 10 years prior to application.
What does the change mean? The initial test phase beginning Sept. 1, applies to applicants applying for Tier 1 (Investor, Entrepreneur) visas. If this phase is successful, employers sponsoring workers should expect the rule to apply to Tier 2 categories by 2016-2017.
Background: The Home Office is imposing increased documentary requirements for visa applicants in order to prevent criminal elements from entering the country.
In the first phase, Tier 1 investors and entrepreneurs and their adult dependents applying from overseas must produce police clearance certificates from every country where they lived for 12 months or more in the previous 10 years. The certificates must have been issued within six months before submission of the visa application and must be translated into English. The requirement will also apply to visa-waived nationals, including U.S. nationals.
The Home Office has said that if the first phase is successful, the requirements will be rolled out to other visa categories in 2016-17.
BAL Analysis: The lengthy process of obtaining police clearances, in some cases from multiple countries, will add significant inconvenience, time and cost to the visa process.