Possible new skills levy for UK employers employing Tier 2 migrants

The Migration Advisory Committee (MAC) was requested by Prime Minister David Cameron and Home Secretary Theresa May to investigate ways in which the current flow of skilled non-EU migrants to the Britain can be reduced. The MAC has subsequently earlier this week (19 January 2016) published its recommendations on how to tighten skilled worker visa routes, to reduce non-EU migration.

The UK Government wants to reduce migration to the UK, as the UK experienced record net migration figures of 336,000 to Britain in the year ending June 2015. Ms May is reportedly expected to endorse the recommendations but has not made an announcement in this regard.

The MAC report recommends the following;

  • The minimum salary threshold for Tier 2 should rise to £30,000 to reflect the current degree skill requirement for Tier 2. The MAC recommends that this higher salary threshold is phased in, as the typical pay of migrants in public sector occupations such as health care and teaching is below this proposed threshold.
  • A skills levy, or Immigration Skills Charge (ISC), to be introduced on firms that make use of Tier 2 migrant labour. The MAC suggested an upfront charge of £1,000 per year for each Tier 2 migrant employed by UK companies. The aim of this skills levy is to provide funds for skills funding and to impact on the employer behaviour.
  • The Tier 2 Intra-Company Transfer route for third party contracting to be moved into a separate immigration route, and that a higher salary threshold of £41,500 be applied for this new route.
  • No automatic sunsetting of jobs on the Shortage Occupation List, but that employers should provide evidence when an occupation has been on the list for some years.

The MAC also specifically stated that they do NOT recommend the following;

  • That Tier 2 (General) is restricted only to occupations on an expanded shortage occupation list.
  • The restriction of work rights for dependents.

BIC will inform clients should the UK Home Office endorse any of the recommendations or make any further announcements in this regard.