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Migration Advisory Committee recommendations on the points-based immigration system and salary thresholds

There are two main recent developments in immigration policy that employers need to be aware of. The first is that the Migration Advisory Committee (which is the expert body that advises the UK Government on immigration policy) has published its report on what it considers the new points-based immigration system should look like after the Brexit transition period.  This report also sets out its recommendations for minimum salary levels for eligibility for sponsorship.  It is now for the UK Government to consider these recommendations and to respond to them.

The second development is the new Global Talent visa which will be in place from 20th February 2020: we’ll blog on the details and key criteria for this separately.

MAC report on a points-based system

The MAC report is generally good news for employers, assuming its recommendations are implemented.  It makes several recommendations about the proposed new immigration system which would simplify it and expand its scope, softening the impact of freedom of movement ending. However, for those employing staff in low paid jobs, it provides little comfort after the Brexit transition period is over.

  • Despite the suggestions from the UK Government that the current system will be overhauled, the report recommends retaining the existing framework for Tier 2 General (which is for skilled workers coming to the UK who have a job offer). The report does not recommend changing the framework as the MAC considers that the combination of skills and salary threshold requirements work well for an employer driven system.
  • It recommends that the new system should apply equally to EEA and non-EEA citizens. It should be expanded to include medium skilled (RQF3+) as well as highly skilled jobs which are already eligible for sponsorship.  This will significantly expand the scope of Tier 2.
  • The MAC also recommends that the new system should result in the abolition of the immigration cap which limits the numbers of employees who can be sponsored. This will simplify the system and will speed up the process of sponsorship as there will be no requirement for applications to be considered each month through the monthly allocation process.  It will also give more certainty to employers who will know in advance if someone can be sponsored.
  • It recommends the abolition of the resident labour market test which has made it tougher to sponsor migrant workers and which adds time and cost to the sponsorship process.
  • The MAC report comments that the impact of freedom of movement ending will be felt keenly in sectors that primarily employ lower skilled workers (who would not be eligible under the Tier 2 immigration route). It recommends that the Government considers addressing this through another route e.g. a temporary worker route or via sector based schemes which were mentioned in the election campaign.

MAC report on salary thresholds

  • Whether the current baseline salary threshold of £30,000 is suitable for the new immigration system following the Brexit transition period is one of the most critical issues for employers. The MAC report recommends that a minimum salary level of £25,600 should apply following the transition period (with some exceptions) to accommodate the inclusion of medium skilled jobs that will carry with them lower salary levels.   It also recommends that there should not be any regional variations in salary.
  • A different salary threshold would continue to apply to ‘new entrant’ roles. This would be set at £17,920 if the MAC’s recommendations are followed.  The MAC has also recommended widening the criteria for new entrants and permitting this lower salary to apply for a longer period.
  • The MAC has not recommended including different salary levels for part time workers – but they have recommended providing more options to allow people to swap to part-time working if they become parents.
  • Although the drop in salary level would expand the numbers of roles which are suitable for sponsorship, the issue of visa costs shouldn’t be ignored in assessing whether these rule changes would be meaningful for employers and their recruitment challenges. The costs of sponsorship and charges such as the immigration skills charge can run to many thousands of pounds per employee – so the financial impact is significant.  The NHS surcharge (a charge to pay towards use of the NHS) will apply to EEA citizens following the transition period and may act as a disincentive for some to come to the UK for work unless their earnings are high enough.

Whether or not the Government accepts all of the MAC’s recommendations remains to be seen.  But the report does make an interesting point about the impact of the new system on the economy overall, and makes it clear why immigration policy is relevant for everyone.  It says that the MAC expects that restricting EEA migration to medium and highly skilled jobs will ‘reduce the levels of immigration, the size of the UK population and total GDP‘.

If you have any queries about anything raised in this blog, or on immigration issues generally, please get in touch.

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