• United Kingdom: Government Announces Details of Permanent Cap System and Transitional Arrangements
  • February 18, 2011
  • Law Firm: Fragomen Del Rey Bernsen Loewy LLP - New York Office
  • The UK Border Agency (UKBA) today released long-awaited official details of how it will implement the permanent cap on the annual admission of foreign workers, which is set to take effect on April 6, 2011. Today’s announcement addressed how the cap will apply to Tier 2 of the Points Based System and transitional arrangements for foreign nationals already in the UK under Tiers 1 and 2. It also addressed stricter eligibility requirements for all Tier 2 applicants.

    Today’s announcement is the first official explanation of the details of the new system, but the particulars remain subject to change until final, definitive rules governing the system are published in March.

    Implementation of the Tier 2 Cap

    Under the permanent cap system, the UKBA will introduce two types of Tier 2 Certificates of Sponsorship: (1) Unrestricted Certificates, which can be used to sponsor foreign workers in a category that is exempt from the annual cap; and (2) Restricted Certificates, which can be used to sponsor foreign workers in categories subject to the cap.

    Tier 2 Applications That are Exempt from the Annual Cap

    The process by which employers will issue Unrestricted Certificates of Sponsorship will largely be the same as the current process. However, over the coming weeks, the UK Border Agency is expected to contact registered Tier 2 sponsors to establish their annual allocation for Unrestricted Certificates.

    The following categories of foreign workers are exempt from the annual cap and eligible for Unrestricted Certificates of Sponsorship:

    • Tier 2 (Intracompany Transfers); 
    • Foreign nationals already working in the UK under Tier 2 and are extending their stay with a current or new employer; 
    • Foreign nationals already in the UK who are changing their status to Tier 2 (General) in-country; 
    • Foreign nationals applying under the transitional arrangements discussed below as a Tier 2 migrant or work permit holder; 
    • Applicants seeking to fill a vacancy with a salary of £150,000 or more (note the Resident Labour Market Test requirement will not apply to this category); and 
    • Tier 2 Sportsperson or Minister of Religion applicants.

    Tier 2 Applications That are Subject to the Cap

    All foreign nationals seeking to work in a Tier 2 (General) category that is subject to the cap will need a Restricted Certificate of Sponsorship. These Certificates of Sponsorship will be capped at 20,700 for April 2011 to April 2012. This annual cap will be divided into 12 monthly allocations - 4,200 Certificates for April 2011 and 1,500 for each month thereafter.

    Sponsoring employers will have to apply to the UKBA before they can issue Restricted Certificates of Sponsorship to prospective foreign workers. Employers should be aware that once issued, Restricted Certificates of Sponsorship will only remain valid for three months. They must be issued to foreign workers within that time, which means employers will have to apply for Restricted Certificates within three months of a foreign worker’s proposed start date.

    Each month on a fixed and published date, the UKBA will review pending applications and assess them against a new points scale. As an initial matter, an application must score at least 32 points on this scale to be approved. Points will be allocated as follows:

    • Applications for jobs on the Shortage Occupation List receive 75 points; 
    • Applications for which the employer conducted a Resident Labour Market Test for an occupation recognized by the UKBA as being at the PhD level receive 50 points; 
    • Applications for which the employer conducted a Resident Labour Market Test receive 30 points 
    • The foreign national’s proposed salary earns points on a sliding scale from 2 to 30 points for salaries between £20,000 and £149,000.

    If the UKBA does not receive enough applications to reach the monthly allocation, it will issue Restricted Certificates of Sponsorship for all applications that reach the 32-point minimum and roll over any unused Certificates to the following month.

    If the UKBA receives more applications than the monthly allocation, it will rank the applications based on the points analysis and award Restricted Certificates to the employers with the top-ranked applications. In the event there is a tie among employers at the cut-off point in the rankings, the UKBA may issue up to a 100 additional Certificates drawn from the following month’s allocation. For example, if 100 or fewer applications score an equal number of points at the cut-off time for July 2011, the UKBA will be able to grant all of the tied applications and reduce the August 2011 allocation by that number. If more than 100 applications score an equal number of points at the cut-off point for a month, the UKBA will deny all of them and carry over the resulting unused balance to the following month.

    Unsuccessful applications will not be carried over from one month to the next. Sponsors will have to reapply for if their applications do not receive cap allocations or if they are denied.

    Changes for Tier 2 Intracompany Transferees

    Though the Tier 2 (Intracompany Transfers) category will not be subject to the annual cap, it will be subject to several new restrictions and procedural changes.

    The duration of stay granted to a Tier 2 intracompany transferee will differ depending on the salary received in the UK. Those paid between £24,000 and £40,000 will be able to work in the UK for no longer than twelve months, and extensions will not be available. If the salary is over £40,000 and meets the wage minimum for the job type, the foreign national will be able to work for up to three years initially, with a possible two-year extension available, for a maximum stay of five years.

    After a Tier 2 intracompany transferee has reached the maximum period of stay, he or she must leave the UK and will not be able to re-enter for work for twelve months. A foreign national may be exempt from this rule if his or her original stay was less than twelve months and he or she seeks to re-enter the UK to work for a salary over £40,000. In addition, Tier 2 intracompany transferees who were granted status before April 6, 2011 will continue to be able to apply for extensions of stay beyond 5 years.

    The new rules on duration of stay do not apply to the intracompany transfers subcategories for Graduate Trainees and Skills Transfer, and there are no other changes for these subcategories.

    Employers will continue being able to count non-salary allowances towards the minimum salary amounts for Tier 2 intracompany transferees as they do under current Tier 2 Policy Guidance. Last year the Migration Advisory Committee, the UK government’s independent advisor on migration issues, recommended reducing the number of non-salary allowances that could count towards minimum salary requirements, but this recommendation was not implemented.

    Stricter Eligibility Requirements for all Tier 2 Applications: Graduate Occupation and English Language Requirements

    Beginning April 6, the Tier 2 classification will be subject to tighter eligibility requirements. To qualify for Tier 2, a job must appear either on the UKBA’s new list of graduate-level occupations or on the UK’s Shortage Occupation List. This restriction will apply equally to the Tier 2 (General) and Tier 2 (Intracompany Transfers) subcategories.

    In addition, the minimum English language level for Tier 2 (General) will be raised from basic to intermediate English, which corresponds to Level B1 of the Common European Framework of Reference for languages.

    Transitional Arrangements for Foreign Nationals Already in the UK

    As previously reported, the Tier 1 (General) category as it currently operates will be closed on April 6, 2011. The UKBA confirmed that existing Tier 1 (General) migrants already in the UK (including those who still have status under the old Highly Skilled Migrant Program category) will be able to extend their existing visas under transitional arrangements. Because the current Tier 1 (General) category will no longer exist, any foreign national already in the UK who seeks to change to an employer-sponsored status after April 6 will have to do so under Tier 2. As noted above, foreign nationals already in the UK changing their status to Tier 2 are exempt from the new cap system.

    Foreign nationals who were granted work authorization under Tier 2 prior to April 6, 2011 are exempt from all of the upcoming changes to Tier 2, including those extending their stay and those applying to change employers.

    The UKBA also stated it would introduce new rules limiting access to settlement, the UK form of permanent residence, on or after April 6, 2011. Changes include the introduction of new minimum income requirements for those seeking to settle in the UK after working in Tier 1 (General) and Tier 2 (General), amendments to the English language and UK cultural knowledge requirements, and reforms of the current criminality test to bring the requirements more in line with British naturalization requirements.

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