According to a review published by The Migration Advisory Committee (MAC), earlier this year into the Tier 2 visa route, the IT sector uses 93% of the Tier 2 Intra-company Transfer (ICT) route for third-party contracts. MAC expressed concerns that the use of third party contracting within the IT sector may be used to take advantage of cheaper and more flexible labour from outside the European Economic Area (EEA) and recommended that the UK Government consider carrying out a more in-depth review of the skills shortages within the IT sector and the subsequent impact of immigration in this area. We summarise and analyse MAC’s review and recommendations below.
The Use of Tier 2 Intra Company Transfer Route in the UK IT Sector
The Tier 2 (Intra-company Transfer) route allows multinational companies to transfer key personnel from their overseas branches to the UK for temporary periods, rather than to fill permanent vacancies in the UK. The route allows a company to develop and train a current employee with new skills, as opposed to hiring a new worker to obtain the desired skills.
According to MAC’s report, during the 12 months ending in August 2015, over 50 per cent of applications under the Tier 2 ICT category were for IT related roles. The report also highlighted that a new use of the Tier 2 ICT route had emerged other than the conventional uses which is for the purpose of third-party contracting.
MAC found that an increasing numbers of UK IT workers were becoming self-employed contractors to reflect the fact that highly-skilled talent is in relatively short supply and IT workers were choosing to maximise their earning power through self-employment.
Therefore MAC recommends that the government should commission a more in-depth review of skills shortages within the IT industry, which heavily relies, in particular, on the Tier 2 ICT visa.
MAC Recommendations for Review
One of MAC’s key concerns is that sponsors in the IT sector may be using the Tier 2 ICT route to enable non-EEA nationals to carry out work for third-party organisations, which gives businesses a considerable cost advantage. Furthermore it was concerned that foreign national employees were being paid less than it would cost to employee UK workers and that this is not contributing to the stock of IT skills within the UK workforce
The report states that:
The ‘conventional’ use of the Tier 2 (Intra-company Transfer) route, where a small number of highly skilled specialist staff are brought into the UK to impart their skills or gain experience, delivers significant benefits to the UK, encouraging foreign trade and investment.
Therefore to ensure that those benefits continue to be derived from the Tier 2 ICT route MAC has made the following recommendations;
- extending the qualifying period with the company overseas for intra-company transfers from 12 months to 2 years for the short-term and long-term routes
- MAC recommends that Tier 2 ICT sponsors should be required to enter a more detailed description of the role on the CoS application form to ensure that the role is sufficiently specialist
- MAC further recommends that Tier 2 (Intra-Company Transfer) migrants be subject to the immigration health surcharge
- There is also a recommendation that a new route be created alongside the conventional Tier 2 (Intra-company Transfer) route, designed specifically for third-party contracting
- MAC recommended an increase in the salary thresholds required for third party contracting as a way to prioritise applications and prevent any undercutting and displacement within the UK labour market. It further recommends that the salary threshold be set at £41,500
- It goes on to recommend that the Government commission an in-depth review of skills shortages within the IT industry
- And according to its report MAC strongest recommendation is for any changes to be kept under active review
UK Immigration Advice for Tier 2 Visa Applicants and Sponsors
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