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The "Cap" and the "Floor": What Next for Skilled Workers?

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Education is the latest sector said to be threatened by current immigration policy in the UK. Heads say that the UK risks losing “significant numbers” of overseas teachers, joining the “thousands” of nurses who could be forced out of the NHS. 

So what has caused this problem, and is it something that employers and workers can plan to avoid? 

There are two main features of immigration policy that are combining to make it more difficult to hire overseas workers. The first is the “cap” on skilled workers brought to the UK under Tier 2 of the Points-Based System (the “PBS”). The second is the imminent imposition of a £35,000 minimum annual salary on Tier 2 workers applying to stay permanently in the UK. 

The cap 

June 2015 was the first month in the operation of the PBS when the monthly cap for restricted certificates of sponsorship was reached. Restricted certificates are required when an employer wants to hire a skilled worker from overseas who will need a visa to enter the UK. 

This means that when employers went to the allocation committee in June, instead of all applications being allowed (provided the requirements as to skills and salary were met), the Home Office refused almost all applications for jobs paying less than £46,000 per year. This is clearly well above the salary level for many occupations that would otherwise meet the skills criteria for Tier 2 (including many nurses and teachers). 

The floor 

The second issue is the salary floor that will be required for most Tier 2 ILR applicants from 2016. 

Strict salary boundaries apply to most jobs, in order to avoid employers undercutting local market rates. Significant changes in job roles or salary must be reported to the Home Office and could require the employer to re-advertise the “new” job, and the employee to reapply for it. 

After a total of 5 years in the UK, an employee might be eligible to apply for indefinite leave to remain (“ILR”) if they are still required by their employer to do the same job. However, starting in 2016, only applicants earning at least £35,000 per year from their Tier 2 job will be eligible for ILR. 

A swathe of skilled workers has therefore been cut off from the possibility of settlement in the UK. Either new entrants to these jobs will not qualify to come from overseas, or there will be no prospect of ILR to tempt them. 

This is the government's stated policy: to “break the link” between economic migration and settlement in the UK.  Unfortunately from the perspective of many employers it also breaks the link between hiring a necessary employee and developing that person's career to benefit their business. 

Planning for settlement? 

Employers can do a certain amount to prepare to keep valuable employees on. Proper salary review procedures should be flexible enough to keep the option of ILR in sight in some sectors, but these must of course be conducted across the board in a non-discriminatory way.  

The unavoidable conclusion is that the new measures will combine to raise salary offers without any guarantee that the local workforce is ready and waiting to take up any slack. Particularly in lower-paid public sector occupations such as nursing and teaching, there is a real risk that immigration policy could lead to a straightforward shortage of workers. 

If you have any questions about how developments in the Points-Based System will affect your business, or your work prospects in the UK, contact Kitty Falls on 023 8022 1344.