Economic Independence -v- the ‘Cultural Fit’ – the changed face of the Tier 2 Migrant

Amidst the ongoing Calais crisis much political dialogue focuses upon how to deal with the immigration crisis 'holistically'.

Despite the rhetoric, the reality is this – no matter whether in domestic or corporate fields, the government is reforming immigration regulation with familial or cultural ties very much secondary to economics.

Tier 2 Visa Migrants to be required to earn £35,000 in order to settle in the UK as of 6 April 2016

In April 2012 we saw the imposition of a maximum six year period for those working under a Tier 2 (General) Visa, entering the UK on or after 6 April 2011. At the five year stage of a six year stay a Tier 2 migrant must apply for indefinite leave to remain (ILR), allowing legal settlement in the UK free from any time or financial restrictions. However, these somewhat unencumbered obligations are about to change.

As of 6 April 2016 Tier 2 migrants coming from outside the European Economic Area (EEA) and who wish to apply for UK indefinite leave to remain or 'permanent residence', will be required to earn a minimum of £35,000 gross per annum in order to qualify. This is the first time that the UK government has placed an economic test or standard upon the right to settle. Previously ILR would have been granted on the grounds of length of time living in the UK, along with an applicant's ties to the UK, for example family or community links. Until now, UK settlement has occurred as though it were an automatic consequence of having spent five years residing in the UK as a Tier 2 migrant.

Far-reaching change

Although this change in standards and procedure may seem like a somewhat radical modification, this should not come as any great surprise to migrant employees and employers alike. Teresa May, Home Secretary, alluded that such change was pending as early as 2011, following concern that those settling in the UK have been much lower paid and lower-skilled than those workers who have not remained here.

What happens when the Home Office says 'no'?

If a migrant's application fails to meet the minimum salary requirement, the worker will simply not qualify for ILR and will most probably be required to leave the UK. Following a failed application such migrants will be subject to a 'cooling off' period, meaning that they will not be able to return to the UK for a period of 12 months. Immigration rules are constantly evolving, and for that reason it is essential that when making an application for ILR the migrant applicant is sure that they are able to meet the requirements applicable at that time.

UK Visas and Immigration have indicated that the minimum salary thresholds will be changing on an annual basis as follows:

• £35,500 if applying on or after 6 April 2018; 
• £35,800 if applying on or after 6 April 2019; and 
• £36,200 if applying on or after 6 April 2020.

Knock-on effect for NI employers

It is worth noting that the salary threshold refers to basic pay only, excluding any/all overtime or bonus payments. This exclusion of additional payment renders this salary requirement increasingly difficult to achieve, for both employees and employers when the national average in NI, currently, is £26,000. It is likely that a number of employers will find themselves forced to increase the salaries of those employees which they are keen to retain long-term, which may, in turn, increase the financial strains upon their companies.

Employers must also be wary if increasing the salaries of migrant employees, so as not to expose themselves to potential indirect discrimination claims from domestic employees. Objective justification has, in recent times, been the subject of judicial commentary in this arena; essentially, can a practice of this nature be considered a proportionate means of achieving a legitimate aim?

Taking a wider view on the matter, the measure to be implemented by the Home Office may force employers to increase salaries across their firms. In that regard, the implementation and development of a corporate immigration programme is vital.

In order to attempt to alleviate fears that there may be skill shortages across UK industries, a number of quite narrow exceptions have been provided for. Occupations which are currently exempt from the minimum salary requirement include scientists and researchers in PhD level jobs, along with anyone in a role listed on the 'shortage occupation list'.

Preparation is key

While many migrant employees (with an intention to settle in the UK) will find themselves in a precarious position come April 2016, foresighted employers might well react and prepare for the impending changes in the coming months. Clearly it will become more costly to retain non-EEA personnel owing to the higher rate of salary required, however, this must be balanced against the need for highly skilled workers.

There is no doubt that the need is great; according to the Northern Ireland Adviser on Employment and Skills there are currently 3,100 skill shortage vacancies in Northern Ireland. These roles are important to fill as they represent potentially productive elements within the economy here and also illustrate those sectors upon which efforts should be focused in terms of attracting foreign talent. Of course, many of the migrants recruited under the Tier 2 route may come to Northern Ireland with no want or desire to settle here. The changes will impact only those individuals wishing to establish themselves, long term, in Northern Ireland and GB.

Immigration Programmes and Corporate Initiatives

Employers should be aware that immigration law and related rules are constantly changing, often without warning. As a result, businesses in NI should continue to monitor the situation in relation to, in particular, the additions to the shortage occupation list.

In order to tackle 'head-on' the challenges ahead, employers should acknowledge the reality of, and necessity for, a corporate immigration policy, and, once established, assimilate that with related corporate initiatives, particularly in Human Resources, equality of opportunity and good employment practice generally.

A&L Goodbody would be delighted to support you and your business in doing so. For further information on developing your immigration program, as well as corporate immigration/employment law issues, generally please contact Jenny Walker or Gareth Walls, immigration and employment specialists with A&L Goodbody.

Date published: 04 August 2015