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Salary increase suggestions

Today (Tuesday 19th of January) the Migration Advisory Committee published its recommendations to restrict worker visa paths into the United Kingdom with the overall goal of reducing non-EU migration into the UK.

Within the current Tier 2 route the committee recommended that the Government introduce higher salary thresholds as well as prioritise higher value and skilled migrants within this visa category.

The Government the MAC to address what it saw as failings within the Tier 2 system and subsequently within the report addressed worries about the increasing number of migrants using the route and the effects on the domestic labour market.

Within the report the MAC decided that price would be the best mechanism to lower the amount of migrants using the route as well as more efficiently target the specialised skills that non EU migrants can bring to the UK. The report also claims that by using price as a tool to place further restrictions on migrant workers is a good way to confront the need to skill up the domestic market.

Further recommendations include introducing an Immigration Skills Charge for employers and tightening the Intra-Company Transfer route.

The level of pay is currently £20,800 which the committee recommend to raise to £30,000 which would better reflect the higher eligibility qualifications needed. For some migrants workers who receive lower pay, mostly those in the public sector, the report suggest a phrasal increase and that a lower threshold of £23,000 should be set for graduates.

According to the MAC’s analysis Tier 2 migrants works are usually paid more than their UK equivalents which would support the view that migrants on Tier 2 bring with them skills that are required and valuable to the UK. However, within certain professions migrant workers are not paid as much as their UK counterparts, mainly within the public sector, which is thought to be a reaction to certain financial pressures.

It is hoped that by implementing the suggestion of an Immigration Skills Charge UK, thus increasing the cost of employment, employers would reduce their reliance on migrant workers and reinvest in training domestic workers. The suggested cost of £1,000 per worker would bring in an estimated £250 million that could be used to fund skills.

In regards to the current Intra-Company transfer route, specifically designed to transfer highly skilled staff to the UK to impart their skills and experience, the committee made a number of suggestions. Often migrants are being used to service third party contracts and thus the route is being used in a way that it was not intended to be. By raising the salary threshold to £41,500 it is expected that loopholes will be closed thus deterring those who aim to abuse the system.

Whilst the recent recommendations may not come as a surprise to many, criticism has been levelled at what is seen as measures that will further complicate employing foreign nationals. The recent changes are part of a long line of salary based thresholds that seek to restrict migrants entering the UK. Previous changes have included setting a minimum earnings threshold for spouse visa applications as well as raising the threshold for migrants on tier 2 who want to apply for settlement in the UK.

How successful these measures will be remains to be seen, however what is clear is that for non EU migrants Britain is becoming an increasingly difficult country to enter.

Westkin Associates

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1 Maddox Street
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