HR 10 January 2017

A small business guide to new immigration rules

Immigration rules
Recent changes to immigration rules mean that employers may have to revise staff payrolls

Writing for Business Advice, Shara Pledger, a solicitor at immigration law specialists Latitude Law, provides small business owners with an overview of the key recent changes to immigration rules.

The government has introduced changes to the requirements for businesses employing skilled Tier 2 workers in the UK. The first round of changes took effect on 24 November, 2016. This will be followed by a second round of changes, currently scheduled for April 2017.

What immigration rules changed in November 2016

From 24 November 2016, experienced workers (as opposed to new entrants) have a minimum salary requirement raised from £20,800 to £25,000 per year, or the salary quoted in the relevant Code of Practice (whichever is higher).

This applies to new applicants to the Tier 2 route – only those joining the route from overseas, or switching from an alternative immigration category.

The government intends this change to make Tier 2 more exclusive, focused on truly highly-skilled applicants doing high-value jobs for their employers. Despite this, in the short-term most HR teams will not find themselves significantly impacted, as most experienced Tier 2 applicants are already required to be paid £25,000 per year year due to the levels set in the Codes of Practice.

What immigration rules will change in April 2017

The changes due to be introduced in April 2017 will be more wide-reaching, applying to all employees issued with a new Class of Service (CoS) for Tier 2. At this point, the salary requirement will rise to £30,000 per year, although this again is scheduled to apply to experienced staff members only.

Intra-company transfer (ICT)

Some of the biggest changes apply to the ICT route. The government is phasing out the skills transfer category entirely, meaning that businesses will no longer be able to send workers to the UK to train them, or send workers from overseas to train their UK staff.

That sub-category is already closed to new applicants (from November 2016).  The Home Office suggests that the business visit route may be suitable for such trips, although the visit category is notorious for its lack of certainty.

April 2017 will most likely see the short-term sub-category closed in the same way, streamlining ICT to allow for either graduate trainees, or more senior staff members.

The graduate trainee sub-category saw some improvements last month, with the salary threshold dropped to £23,000, and the number of available places per business increased from five to 20.  This encourages and allows large ICT sponsors to bring new graduate talent to the UK, to gain experience here and to benefit the UK.

The closure of the short-term sub-category will have the effect of setting one minimum salary requirement for non-graduate transfers, £41,500 per year. This is designed to help businesses move specialists and senior managers more easily.

Other changes currently anticipated to take effect in April 2017 apply to high earners (permitting relocation to the UK for between five and nine years where the minimum salary paid is £120,000 per year, a reduction from £155,300), and the removal of the requirement for an ICT long-term employee to have been employed with the business for at least one year (but only for employees earning at least £73,900 per year).

Other things to remember regarding immigration rules

Nurses remain on the Shortage Occupations List, but employers will need to carry out a Resident Labour Market Test.

Tier 2 (General) migrants remain liable to pay the Immigration Healthcare Surcharge at a cost of £200 per year for the employee and all dependents. Tier 2 ICT are currently exempt from this requirement, but that is expected to change and the introduction of the charge is overdue (was anticipated in Autumn 2016).

Finally, April 2017 will most likely see the introduction of the Immigration Skills Charge – a levy applied to each business for each CoS they issue.  That levy is anticipated to be £1000 per CoS for medium or large businesses, with a lower rate of £364 applicable to small businesses and charities.

Implications for HR professionals

HR professionals need to ensure that, in light of the new legislation, they are prepared for the potential rises in minimum salary requirements, have made provision for the end to the ICT skills exchange category, and that they plan appropriately for the closure of the ICT short-term route.

HR professionals should also be aware that switching an employer from the ICT to the General route can be complicated, with all Tier 2 applicants subject to a 12-month “cooling off period” where they must leave the UK before being able to re-apply for a new Tier 2 opportunity.

Exemptions apply in limited circumstances (such as for high earners), but it is vital to check the status of all employees and to plan an appropriate visa route which allows sufficient UK residence for individuals to perform their role.

There were some non-sponsorship specific routes which are also of relevance to HR teams. For example, the potential to make an immigration application in the UK after the date of expiry of a previous visa has been limited, preventing such applications in most cases.

Employers should be especially vigilant in ensuring that workers submit their applications before their leave expires.

It is less easy for a Tier 2 worker to re-apply from overseas due to the 12-month cooling-off period imposed on those who wish to return to the UK in the Tier 2 category. This means that there can be serious breaches in continuity of employment in the event of an application made even one day late.

Employers should bear this in mind if it is necessary to make requests for CoS allocations for existing staff via the Sponsor Management System; we would normally recommend submitting such requests at least 18 weeks before your employee’s leave expires.

Shara Pledger is a solicitor Latitude Law, a legal firm specialising in immigration law.

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