Legal news, views, trends and tools for HR Professionals. Stay ahead. Go further

DWF

DWF

Legal news, views, trends and tools for HR Professionals. Stay ahead. Go further

DWF

Latest Articles


Archives

Share this
  • Facebook
  • Twitter
  • Linkedin
  • Google Plus
  • Email

The price of talent – migrant worker costs set to rise yet again

Whilst uncertainty continues about UK based EU and EEA (European Economic Area) nationals in respect of their work/settlement options following a hard Brexit, the same is not true for skilled non-EU/EEA migrants wishing to come to the UK to work under Tier 2 of the Points Based System. In short it is going to become harder and more expensive to employ skilled migrants.

In November 2016 the Government introduced its first tranche of changes:

• The annual salary for experienced workers under Tier 2 General Visa increased to a minimum of £25,000.

• The annual salary for Tier 2 short term Intra-Company Transfers (ICT) was increased to a minimum of £30,000.

• The Tier 2 ICT subcategory of short term Skills Transfer visas was closed altogether.

Building on this, further changes are to be introduced in April 2017:

• The experienced salary rate for Tier 2 General Visas will increase again to a minimum of £30,000.

• The short term Tier 2 ICT Visa will also be closed, in effect meaning that apart from those migrants coming to the UK under the graduate sub category, all Tier 2 ICT workers will have to be paid at least £41,500.

• If that is not enough, the Immigration Health Surcharge (IHS) is also to be extended to Tier 2 ICT visas, at a cost pf £200 per year per migrant, with the same charge being levied for any dependants.

In addition to this the “Immigration Skills Charge” is also to be introduced. This is a fixed fee of £1,000 (discounted for small companies and charities) per year per migrant, although unlike the IHS this is not payable in respect of dependants. The idea of the charge is to create a fund by which domestic talent can be nurtured in skills shortage areas, and the need for inward immigration thereby reduced.

So, by way of an example, an established tech company wants to recruit a talented and experienced non EEA national, having been unable to fill the position domestically. The costs of doing so for a three year visa from April 2017 would be as follows:

1. Sponsorship licence fee – £1,475 (renewable / payable every 4 years).

2. Issuing certificate of sponsorship – £199.

3. Visa fee – £2,300 (£575 for the migrant and £575 each for her partner and two children).

4. Immigration Health Surcharge – £2,400 (£200 each for the migrant and partner and children).

5. Immigration skills charge – £3,000.

That gives a total of £9,374 to recruit one individual (and a prescribed rate of remuneration of at least £30,000) with similar fees to be incurred on any subsequent extension of the visa / renewal of licence.

In the event that a five year visa were applied for, then the overall cost would be £15,278 – she’d better be good!

Whilst the intention to provide training in shortage occupations is no doubt laudable, this will not be an overnight fix and the sponsoring employers will have to shoulder this financial burden in the meantime. The financial costs may further increase if the current exodus of EU/EEA nationals continues and results in further skilled labour shortages.

Ultimately, sponsors are not recruiting non EU/EEA nationals simply for the fun of it and it does seem counter intuitive that they incur such a high financial burden for bringing much needed and highly skilled migrants into the UK who in turn pay their taxes and contribute to the wider economy.

For further information please contact:

John Dorney, Employment

Laura Brown, Employment

 

 

 

 

Share this
  • Facebook
  • Twitter
  • Linkedin
  • Google Plus
  • Email

Sorry comments are closed.

employment@dwf.co.uk

Legal news, views, trends and tools for HR Professionals. Stay ahead. Go further