The changes will have an impact on the digital technology sector but, in some cases, are not as significant as we first feared. The changes will start to come into force in Autumn 2016 with the more significant changes coming into force from April 2017.
The main change that will be introduced in Autumn 2016 is a salary increase for all Tier 2 occupations. This is likely to have limited impact on the digital technology sector as the minimum salary level will be increased to £25,000 and the majority of digital technology jobs already exceed this level.
The only occupations which will be affected are web design and development roles which currently have a minimum salary of £23,400.
The salary increases will only apply to experienced workers, those aged 25 and over, and existing staff do not need to have their salaries increased until they apply to extend their visa.
A further salary increase will come into force in April 2017.
Intra Company Transfers
Multi-national companies that make use of the Intra Company Transfer route for temporary transfers will face increased costs from Autumn 2016:
- The minimum salary for short term transfers, under 12 months, will increase to £30,000.
- The Immigration Health Surcharge of £200 per person per year will apply to Intra Company Transferees and their dependants.
The more significant changes, from the perspective of digital technology, will come into force on 6 April 2017. These will significant increase the cost of recruitment and businesses may wish to consider their impact now.
Immigration Skills Charge
The Home Office are introducing an additional charge on Tier 2 sponsors for each migrant they sponsor. This charge will be the equivalent of £1,000 per year for each sponsored worker and will need to be paid up front. Small businesses and charities will benefit from a reduced rate of £364 per year but the costs will still be significant, for example:
Large Business: A 3 year assignment currently costs £199 for the Certificate of Sponsorship. From 6 April 2017 it will cost £3,199.
Small Business: A 3 year assignment currently costs £199 for the Certificate of Sponsorship. From 6 April 2017 it will cost £1,291.
The Home Office have not said how a "small business" will be defined but it is likely to cover small and medium sized enterprises under the Companies Act.
This charge is likely to apply to all new visa applicants and extensions of current staff. Businesses should therefore start to consider bringing recruitment plans forward or extending visas prior to April 2017 to minimise outlays.
The salary threshold for all roles will increase to a minimum of £30,000 per annum. This will only have a small impact on the industry as most roles already require a higher salary, but there will be an impact on software tester roles and web design roles.
The Migration Advisory Committee stated that their proposals were aimed at making Tier 2 more expensive for businesses, and the Home Office seem to have accepted that is the best way to proceed.
Unfortunately, with the growth of the digital technology sector and existing skill shortages, it will still be necessary to use Tier 2 to recruit skilled staff and businesses should start to consider how to minimise costs.
If you have any questions about how to make the most of your Sponsor Licence or how to make sure you are complying with your obligations to the Home Office please get in touch.