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Look Out, MAC's About

Look Out, MAC's About

The widely anticipated report following the Migration Advisory Committee’s (“MAC”) review of Tier 2 last year has now been published.  The Report follows the government’s request in June 2015 for the MAC to carry out a review of Tier 2, with the goal of reducing net-migration by limiting the routes for non-EEA nationals to the UK.  It was feared that the MAC’s recommendations would propose significant changes to Tier 2.  The release of the MAC Report on 19 January 2016 allows us to see the extent to which these fears have been realised. 

Immigration skills charge

One of the major concerns stemming from the MAC review was that it would recommend the introduction of an immigration skills charge – and the MAC Report has done exactly that.  This charge essentially imposes a cost on employers who take on migrant workers and the Report has suggested that £1,000 per year be paid in respect of each Tier 2 employee.  For migrant workers coming to the UK for three or five years, this will result in a significant additional cost for employers. It’s not all bad news however, as the Report suggests that the Tier 2 (ICT) route could potentially be exempt from the immigration skill charge. Nonetheless, it is still likely that employers will view the surcharge as a further disincentive to employing migrant workers and, with a view to reducing costs, they may ultimately decide to recruit from settled workers only. 

Tier 2 salary thresholds

In addition to the immigration skills charge, the MAC’s recommendation in respect of Tier 2 salary thresholds is significant.  The Report proposes a large increase to the minimum salary levels for both Tier 2 (General) and Tier 2 (ICT) to £30,000 (from £20,800 and £24,800 respectively).  It also suggested that a threshold set at £23,000 should be offered to graduates.  Although the MAC has recommended that the increase in thresholds be introduced on a phased basis, this change would clearly reduce the overall numbers under Tier 2.

Tier 2 (General)

On a more positive note, despite fears that the MAC would recommend limiting the Tier 2 (General) route to roles of genuine shortage only, the MAC report has not made this proposal. Instead it suggested that the shortage occupation list should be reviewed regularly with a view to determining whether the roles on the list are still considered in short supply.  

Intra-company transfers (“ICT”) 

Traditionally Tier 2 (ICT) has been a more attractive way for employers to recruit migrant workers than other points based routes, for example, Tier 2 (General), but given the recommendations made by the MAC Report, this may change.  While it is not (yet) proposed that the Resident Labour Market Test should be introduced for Tier 2 (ICT), the MAC has made the suggestion that workers coming to the UK via this route should be subject to the immigration health surcharge, (currently Tier 2 (ICT) applicants are exempt) and that the qualifying period during which a Tier 2 (ICT) applicant must work for the overseas employer (currently 12 months) should be increased to two years. The Report also recommended making it a requirement for certificates of sponsorship to include a description as to why the ICT is necessary. If implemented, these changes will likely make Tier 2 (ICT) a less attractive (or accessible) option for employers. 

Tier 2 dependents 

A major concern of the MAC review was that it would attempt to limit the rights of dependants of Tier 2 workers.  However, the Report has recommended that no restrictions should be applied to a Tier 2 dependants’ right to work. 

What next? 

In some respects, the MAC Report has proposed significant changes to the Tier 2 route to the UK, particularly in relation to salary thresholds; the Tier 2 (ICT) route; and the immigration skills charge, but other concerns, with regard to the rights of Tier 2 dependents and the roles available for Tier 2 (General), have not materialised.  Nonetheless, the changes which have been recommended by the MAC, if brought into force, will have a considerable impact on businesses employing migrant workers.

Whether the government will ultimately take steps to implement the recommendations made by the MAC remains to be seen, but given its target to reduce net migration, it is likely that some (if not all) of these proposals will eventually be introduced in some form or another. 

Ronald Mackay

Elise Lang