Legal Update: Migration Advisory Committee Review - Tier 2 Migration

Recommendations to Government

The highly anticipated recommendations arising out of the Migration Advisory Committee (MAC) Review into Tier 2 Migration were published yesterday, 19 January 2016, following a 7 month process of consultation and assessment.

The MAC advises the Government on migration issues. It is a non-statutory, non-time-limited, non-departmental public body, sponsored by the Home Office. The MAC is made up of a chair and four other independent economists, who have been appointed under rules relating to public appointments.

The MAC was asked by the Government to carry out a wide-ranging review of Tier 2 Migration (the primary mechanism for economic migration to the UK for skilled workers), with a view to recommending proposals that would constrict migrant inflow to the UK under the route. The Government also intends to improve the training of UK workers, with a view to reducing UK employers' dependency on migrant workers to fill highly skilled and specialised roles.

Need for advice

The Committee was asked to provide advice on five specific issues:

  • How to prioritise applications under Tier 2 to ensure maximum benefit for the UK;
  • The application of a skills levy (immigration skills charge) to businesses employing non-EEA migrants;
  • How to tighten up the Tier 2 Intra-company Transfer route;
  • Whether jobs should be automatically removed from the shortage occupation list; and
  • Restricting dependants’ access to the UK labour market.

The recommendations published by the MAC today include suggestions that the Government impose higher salary thresholds to prioritise highly skilled migrants within the Tier 2 route.

In a press release1 Professor Sir David Metcalf CBE, and Chair of the MAC said:

“Skilled migrant workers make important contributions to boosting productivity and public finances, but this should be balanced against their potential impact on the welfare of existing UK residents."

“Raising the cost of employing skilled migrants via higher pay thresholds, and the introduction of an Immigration Skills Charge, should lead to a greater investment in UK employees and reduce the use of migrant labour.”

What do the recommendations look like in practical terms for the local business community?

In short the key recommendations emanating from the MAC Review are as follows:

  • The MAC recommend that the best way for the Government to achieve its aim of restricting volumes under Tier 2 and prioritise attracting more highly skilled migrants is through price;
  • The Committee recommend that the cost of Tier 2 recruitment be raised via a phased increase to the overall minimum salary threshold, from £20,800 to £30,000, reflecting the higher qualifications now required in order for a migrant to be eligible under the Tier 2 route;
  • A minimum salary threshold of £23,000 is recommended in respect of graduate migrants;
  • The introduction of an Immigration Skills Charge as an incentive for UK employers to reduce reliance of migrant workers and to incentivise investment in UK employees. The MAC writes that the revenue accumulated through the charge could be used to help raise skills in the domestic jobs market through training;
  • That use of the Tier 2 (Intra-company Transfer) route for third-party contracting be moved into a separate route and that a higher salary threshold of £41,500 is applied to ensure the route is used by highly qualified and specialised migrants;
  • The Committee do not recommend that Tier 2 (General) is restricted only to occupations on an expanded shortage occupation list;
  • The MAC does not recommend restricting automatic work rights for dependants; and
  • The Committee does not recommend automatic sunsetting of occupations on the shortage occupation list, but does suggest that employers should provide sufficient evidence when an occupation has appeared on the list for a number of years.

As the Government is at liberty to either accept or reject the MAC recommendations, employers should watch this space to see whether the Government will proceed to implement the Committee's recommendations, fully or partially, and, if so, when the recommended changes might come into effect. A&L Goodbody will keep you fully appraised in this regard.

For further information please contact a member of our Employment team.

Date published: 20 January 2016


1News Release MAC001/16 19 January 2016 Migration Advisory Committee