News

Tier 2 Skilled worker Cap reached for first time

The cap on Tier 2 (Skilled) worker Certificates of Sponsorships (COS) was reached for the first time this month since its introduction in April 2011. This means that any application for a restricted COS for an eligible skilled job with a salary of less than £46,000 per annum was refused during the month of June even if the Resident Labour Market Test had been carried out correctly and a suitable member of the UK residence workforce could not be found.

When the number of valid applications for restricted COS exceeds the monthly allocation, the Home Office employs a points based system in order to decide which ones should be granted. Unless the job is on the Shortage Occupation List or is at PHD level, then the key criteria is the level of salary that the migrant will be paid. The higher the salary the more chance the employer has of being granted a restricted COS. For June, the salary had to be in the range of £46,000-£74,999 per annum for the application to have any chance of success.

Implications for businesses and individuals

Any UK companies that failed to get their application granted during June due to the salary being too low will need to make another application. For this to have any real chance of success, a salary of £46,000 or more will need to be paid and even if the employer in question is able to re advertise the position at a higher salary level in accordance with the Resident Labour Market Test requirements, there is still no guarantee that the application will be successful. The reason for this is that the effect of employers re-applying at higher salary rates will almost certainly push up the threshold that will need to be met. The next salary bracket is £75,000 – £99,999 per annum. If it becomes necessary to meet this bracket this will, for obvious reasons, undoubtedly exclude entire sectors such as nursing. It will also disproportionally affect young people who have not yet had the chance to build up sufficient experience to warrant such a high salary.

The wider economic implications of this are clear. At a time when the UK economy is growing, so too is the demand for skilled workers. If the required skilled workers cannot be found from the UK resident workforce then, unless the company is able to pay a high salary, their growth could be seriously stunted. Small and Medium Enterprises (SMEs) will be particularly affected as they will often not be able to afford to pay a sufficiently high salary. As detailed above, this will no doubt affect younger non EEA nationals looking to fill a skilled role as they might not have the level of experience or expertise to justify such a high salary.

The current government has made it clear that they will not be increasing the cap. Behind this decision is a clear desire to not only try to reduce the number of skilled non-EEA migrants coming to the UK to work but also for more UK nationals to be trained to fill skilled roles. Whilst we believe that this is a valid and positive aim, we also believe that this cannot simply be done overnight and that it will take significant time, resources and planning. Furthermore, since there is already a shortage of particular skills within the UK resident workforce, it will be difficult for companies to recruit sufficiently skilled employees in the first place who can then properly train the UK nationals the Home Office has in mind.

In conclusion, it is essential for businesses to not only understand the particular ways in which the cap could affect them but also for them to make contingency plans in order to minimise the potential restrictions on growth that they may face as a result.

If you need further advice on how the cap could affect you or your business please send an enquiry to info@ukvisas.com

June 23, 2015

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