Will the Immigration Skills Charge and related changes affect your business?

Employers who sponsor Tier 2 non-EEA migrants are in for some hefty financial and administrative changes taking effect from this month.

The big change to be introduced from 6 April 2017 is the immigration skills charge under which employers sponsoring non-EEA workers will have to pay £1,000 per employee (of £364 if a small or charitable organisation). There are certain exemptions, e.g. for PhD roles, but where applicable the charge will be paid at the commencement of issuing the Certificate of Sponsorship for the life of the visa. For example, therefore, an employer sponsoring a Tier 2 worker for five years will have to pay £5,000 up front.

This is all part of the Government’s continual push to encourage employers to recruit from the resident labour market and invest in training British staff, rather than to seek services from those overseas, despite the fact that in many cases we are aware that employers struggle to find the skills and talent required for their business needs from within the UK or EEA.

Other changes taking effect from this April are:

• The minimum salary threshold for Tier 2 (General) sponsored workers over the age of 26 will increase to £30,000 per year (from £25,000)
• The salary threshold for exemption from the Resident Labour Market Test is increasing to £159,600 from £155,300 per annum
• The Tier 2 (ICT short-term staff) category will close and individuals will have to apply under the Tier 2 (ICT long-term staff) category, which will have an increased minimum salary threshold of £41,500 per annum
• The closure of the short-term staff category also means that accommodation allowances may only form 30% of the total salary package for ICT workers, rather than 40%
• ICT migrants will no longer benefit from the exemption from the Immigration Health Surcharge
• The salary threshold for senior employees applying under the ICT route who are able to extend their stay in the UK up to nine years is being reduced from £155,300 to £120,000 per annum
• The requirement for employees transferring under the ICT route to have at least one year’s experience is being removed where the individual is paid at least £73,900 per annum.

Of course, more change is likely to come as we learn more about the position of the UK on immigration following the conclusion of the Brexit negotiations, and if there is to be a cap on workers being employed from the EEA, employers are likely to find it increasingly difficult to fulfil their business needs.

If you have queries about business immigration matters, please contact Jessica Piper.