Migrant cap
to affect
UK businesses

29 May 2015

The long-disputed limit on skilled migration, otherwise known as the Tier 2 migrant cap, is forecast to cause issues for UK employers for the first time since its inception in 2010.

Initially, the annual cap of 20,700 skilled migrant workers allowed to enter the UK from outside the EU was met with much dismay by both UK businesses and opposition parties. Due primarily to the recent weakness in the UK economy, however, application numbers fell short of this limit year on year and the anticipated damage to the economy and UK businesses never actually materialised. That is, until now.

For the first time since the introduction of the cap, there is a real possibility that this year will be the first year ever to see the cap preventing skilled Tier 2 migrants from entering and working in the UK.

The demand for Certificates of Sponsorship (CoS) is rising and this continual increase in applications is set to substantially exceed the cap of 20,700 over the course of the next year. With a limited number of restricted CoS available to Tier 2 (General) sponsors each month, some Tier 2 migrants will no longer be able to come to the UK.

The question is: How are the CoS’s allocated and who will be the first to lose out?

The application process works to a monthly cycle and each application received earns points according to a set of criteria where the proposed level of salary being offered to the migrant worker is key. Allocations of restricted CoS are awarded to those applications attracting the most points.

A small number of applications filed by employers will represent jobs at PhD level or listed on the government’s shortage occupations list. These applications are allocated the highest number of points and are therefore mostly guaranteed to secure a CoS allocation. However, the key differential between the rest of the applications submitted is based around the salary offered to the prospective client. The higher the salary, the more points the application will attract.

By way of example, a proposed salary of £100,000+ will be awarded 30 points whilst only a maximum of 10 points are available to those applications indicating that the migrant’s salary on arrival to the UK would be less than £32,000.

Given that the higher the salary a job pays the higher the number of points are awarded, those employers seeking to hire migrant workers at the lower end of the pay scale are likely to lose out the most whenever the demand for restricted CoS outstrips the number available. This will certainly not be welcomed by many employers or indeed the prospective migrant workers which they seek to hire. Despite meeting the scheme rules, their applications could now easily be denied a CoS as a result of the number of valid applications received being more than the number of CoS available. For example, if the same number of CoS applications are received in June as they were for May, it is possible that just over a quarter of those applications will be rejected.

The subsequent fall-out on recruitment and resource planning should therefore not be underestimated.

Employers need to be prepared for this new phase we are entering, especially if seeking to hire migrant staff at a more modest salary level. Gone are the days of ‘automatically’ securing the CoS allocation you requested. Many will be left disappointed and have little choice but to re-file requests on a monthly basis in the hope that demand will fall and their request will result in the allocation of a restricted CoS.

If you have any questions about how the migrant cap may start to affect your sponsor organisation this year, please contact us at Smith Stone Walters.

Share story