Far-reaching business immigration rule changes from 6 April 2017: what employers need to know

03 Apr 2017

In a comprehensive ‘Statement of Changes’ published on 16 March, the Home Office confirmed numerous modifications to the UK business immigration rules. They will apply from 6 April 2017. Here are some of the most important ones employers need to know about.

The immigration skills charge (ISC)

The ISC will apply to sponsors of all non-EEA nationals applying for entry clearance or leave to remain in the Tier 2 (General) or Tier 2 (Intra-Company Transfer) categories, unless the individual falls within a limited number of exemptions.

The amount charged will depend on the size of the sponsor. For medium or large sponsors it will be £1,000 per applicable migrant per year of leave, while for small or charitable sponsors it will be £364 per applicable migrant per year. The charge will be payable by the sponsor upfront (at the time of assigning the Certificate of Sponsorship (CoS)) and will cover the total period of time covered by the CoS. So, for a typical three year visa application sponsored by a medium/large employer, the ISC will be £3,000.

The immigration health surcharge (IHS)

The exemption from paying the IHS for applicants under Tier 2 (Intra-Company Transfer) and their dependants, will be removed. The IHS adds significant cost to a visa application, being payable up front by the applicant at the rate of £200 for each year of their visa grant. It applies to the main applicant and also to any dependants applying with them, so an applicant for a three year Tier 2 visa, whose spouse is also applying with them as a dependant, will have a total up front IHS of £1,200 for both.

Appropriate salary for Tier 2

The minimum salary requirement for experienced hires in the Tier 2 (General) visa category will rise to whichever is the greater of £30,000 and the appropriate rate for the job as stated in Appendix J. The previous fixed minimum was £25,000. The “new entrant” minimum rate will remain £20,800.

Annual increases will be made to the appropriate salary rates for each of the government’s Standard Occupational Classification (SOC) codes, which is how the government classifies jobs by their titles and activities. These will be made 'using the latest available salary data for each occupation'. This increases the likelihood of employers having to pay a higher salary than that which applied when they first sponsored the individual’s entry into the UK, if they want to sponsor a visa extension.

The text explaining which payments can and cannot be counted towards the appropriate salary has been reworded 'to provide greater clarity and consistency'. Amongst the notable changes, it is confirmed that the following will not count towards the appropriate salary:

  • overtime payments (including where overtime is guaranteed);
  • one-off payments (e.g. relocation packages), which do not form part of the regular salary;
  • business expenses, including those related to training, hotel stays, and business travel within the UK;
  • medical benefits;
  • payment of tuition fees; or
  • any payments for which the applicant will need to reimburse the sponsor or a linked overseas business.

Appropriate skill level

It is simply a change of name, but all references to the term 'National Qualifications Framework' (NQF) have been replaced with the new term 'Regulated Qualifications Framework' (RQF).

Tier 2 (intra-company transfer)

The ‘Short-term Staff’ sub-category will be closed, which leaves only the ‘Long-term Staff’ and the ‘Graduate Trainee’ sub-categories for intra-company transfers. The minimum salary threshold for all Tier 2 (ICT) applications, with the exception of Graduate Trainees, will now be £41,500.

The annual salary threshold, above which an exemption from the 'cooling-off' period and an extended maximum stay of up to nine years is available, has been reduced from £155,300 to £120,000.

Where the applicant will be earning a gross annual salary of more than £73,900, a new exemption applies from the requirement (in the Long-term Staff sub-category) for the applicant to have worked outside the UK for an overseas entity linked to the sponsor for at least 12 months immediately prior to the application.

Tier 2 (General)

The 'high earner' salary threshold will be increased from £155,300 to £159,600.

This threshold can be important because, for applicants who will be paid above it, an exemption applies to:

  • the 12 month cooling off period;
  • the restriction on the applicant owning more than 10% of the shares of their intended sponsor (if it is a limited company);
  • the requirement of the sponsor to apply for a restricted Certificate of Sponsorship; and
  • the requirement of the sponsor to carry out a resident labour market test (RLMT).

Further exemption from restricted CoS and RLMT

Subject to meeting three key criteria, where an applicant will 'work in support of a posting from an overseas firm to the sponsor in connection with the relocation of a high value business to the UK or a significant new inward investment project,’ the sponsor will be exempt from the duty to carry out an RLMT in respect of the role, or to apply for a restricted CoS thereafter.

The resident labour market test

Changes have been made to the advertising requirements for new graduate jobs and internships.

The salary threshold, above which a sponsor will not be required to advertise a role on Universal Jobmatch/Jobcentre Plus, is rising to £73,900.

Criminal record checks

A new requirement for overseas criminal record certificates to be produced in respect of entry clearance applications under Tier 2 (General) has been introduced. It applies to applicants who are 18 or over applying for roles in any of a specified list of SOC codes in health, social care or education sectors (and their partner dependants).

New definition of “week” for purposes of student working hours

Tier 4 (General) and Tier 4 (Child) students who are permitted to work are prohibited from working more than 10 or 20 hours per week during term time. A 'week' is now confirmed as meaning a period of seven days beginning with a Monday. This is distinct from the definition of a week for other purposes (for example, for determining working hours restrictions under the Working Time Regulations 1998).

Overstaying and re-entry bans

The period of overstay before a mandatory re-entry ban is triggered has been significantly reduced, from 90 days to 30 days.

Business immigration is a fast-moving area that will continue to change over the coming years, and Brexit may well result in some radical alterations. I recently spoke to business publication, Business Insider, about the potential impact of Brexit on business immigration. You can see the full article here.

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