UK businesses welcome new changes to immigration rules

On 16 February 2011 the UK Border Agency (UKBA) announced more detail about how the business immigration landscape will look from 6 April 2011. Whilst employers have broadly welcomed the proposals, which appear to reflect some of the representations made by the business community during recent consultations, both employers and migrants should act now where the planned changes may affect them.

Annual Limit - Tier 2 General

Tier 2 migrants require a job offer from a licensed Tier 2 sponsor (i.e. a UK employer). Sponsors have known for several months that the UKBA will introduce a permanent cap on the number of Tier 2 (General) ("Tier 2 (G)") visa approvals. For the 12 months starting 6 April 2011, the limit will be 20,700 visas, split into 4,200 for April 2011 and 1,500 for each remaining month. However, the announcement revealed some important exemptions from the cap:

• Tier 2 Intra Company Transfers ("ICT") - there will be no limit on the amount of transfers from an overseas office to a UK operation in the same group structure
• Tier 2 migrants already in the UK extending their stay with their original employer
• Tier 2 migrants already in the UK with valid permission extending their stay by switching to a new employer
• Those migrants in the UK in another visa category and applying to switch into Tier 2 (G) - for example Tier 1 Post Study Workers ("PSW") remaining with the same employer
• Those overseas migrants who will enter the UK to fill a vacancy attracting a salary of £150,000 or more

Certificates of sponsorship ("CoS") for these exempted applications will be "unrestricted", meaning sponsors can issue these CoS without first applying to UKBA for permission, although prior advertising will usually be required. This will be less restrictive than the current system, which in many cases requires prior UKBA permission as sponsors have an insufficient CoS allocation. For many UK businesses, especially SMEs, Tier 2 (G) has been effectively frozen over the past few months, so this is really good news for UK companies looking to grow and recruit skilled staff.

What to do now: sponsors should look out for further communications from the UKBA requesting information on their Tier 2 (G) CoS requirements for April 2011 onwards. Please do contact us to discuss this, as the system should be more flexible from April. Sponsors should try to ensure that they have sufficient headroom on their CoS allocation to fulfil projected recruitment needs. Consider whether any current UK recruitment plans that have been put on hold or affected by the current restrictions could be made easier by the relaxation of the rules.

Tier 2 - other conditions

There will be other conditions that will apply to new Tier 2 visas from 6 April:

• All ICT visas will be exempt from the cap, but the migrant will need a UK salary of at least £24k. If salary is under £40k the migrant will need to leave the UK after 12 months
• Even if the ICT UK salary is more than £40k, the migrant will need to leave UK after a maximum of 5 years (3 years initially with 2 year extension)
• ICT visas will not lead to settlement - Tier 2 (G) visas will continue to lead to permanent residency after 5 years (3 years initially with 2 year extension)
• All Tier 2 migrants must have a graduate level job in the UK (as determined by the UKBA), although it is not mandatory for the migrant to have a degree
• All Tier 2 migrants must be paid at least UK market rate for the role, as set by UKBA
• Recent UK graduates on Tier 1 (PSW) visas can switch into Tier 2 (G) - advertising will not be required if the migrant has been employed by the sponsor for at least 6 months

Comment - These are valuable concessions for UK businesses, although the closure of Tier 1 General (see below), the delays in getting a sponsor licence for start up companies or new sponsors (especially where there is a proposed investment into the UK by an overseas business) and recruitment of international graduates is still causing employers concern.

Tier 1 (General)

Tier 1 (General) ("Tier 1 (G)") allows highly skilled migrants to get personal visas without a sponsor. This route closed to overseas applicants on 23 December 2010. It remains open to UK applicants until 6 April, but there is an increasing rush of applications by migrants seeking to apply before then. It will not be replaced by an equivalent route - the new Tier 1 (Exceptional Talent) route will provide 1,000 visas in 2011 / 2012, but strict eligibility requirements mean that it will be unavailable to most migrants or businesses.

Existing Tier 1 (G) migrants do not need to worry about how the closure will affect their status. Under transitional arrangements, they can still extend their visas after April 2011 under Tier 1 (providing the necessary points are scored), with a view to achieving permanent residency after 5 years.

What to do now: UK based migrants should urgently assess with employers whether they should switch into Tier 1 (G) before it closes. Tier 1 provides greater flexibility for the migrant as they are not tied to one sponsor. It also leads to permanent residency after 5 years, whereas other categories - such as Tier 2 ICT or Tier 1 (PSW) - do not. Due to the rush of applications, migrants may need to apply by post rather than on a same day basis, so will need to submit their passport for 4-8 weeks. Migrants should plan travel needs carefully and contact us for information on current processing times.

What else is on the horizon?

We expect the permanent residency rules will be tightened up with an earnings requirement for migrants on work permits, Tier 1 or Tier 2. Following a recent report by the Independent Chief Inspector of the UKBA, we envisage that current and prospective sponsors may have more frequent UKBA visits/audits to assess compliance with the licensing rules, including document retention and reporting duties. The proposed rules for students and Tier 1 (PSW) visas are yet to be finalised but we envisage that these changes will be wide ranging.

If any of your employees or recruitment plans are likely to be affected by the new rules, please do get in touch with us.

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Lawyers Charlie Pring, Vikki Wiberg