New immigration skills charge for sponsoring non-EEA workers: Will you need to pay? Do you need to amend your employment contracts?

Subject to parliamentary approval, legislation is expected to come into force on 6 April 2017 which will require certain employers who sponsor a worker from outside the European Economic Area (EEA) to pay a new immigration skills charge of £1,000 annually. The skills charge is one of the key reforms within the Immigration Act 2016, the money collected being used to address skills gaps in the UK workforce.

Are you caught?

The skills charge will apply to a sponsor of a ‘Tier 2’ worker assigned a certificate of sponsorship in the ‘General’ or ‘Intra-company Transfer’ route and where that worker is applying from:

• outside the UK for a Tier 2 visa;
• inside the UK to switch to a Tier 2 visa from another type; or
• inside the UK to extend their existing Tier 2 visa with their current employer.

The skills charge will not however apply if you are sponsoring:

• a non-EEA national who was sponsored in Tier 2 before 6 April 2017 and is applying from inside the UK to extend their Tier 2 stay with either the same sponsor or a different sponsor;
• a Tier 2 (Intra-company Transfer) Graduate Trainee;
• a worker to do a specified PhD-level occupation; or
• a Tier 4 student visa holder in the UK switching to a Tier 2 (General) visa.

No skills charge is payable for the worker’s family members (‘dependants’).

An ‘annual’ charge of £1,000 for medium or large sponsors

The skills charge will be £1,000 per year for medium or large sponsors and £364 per year for small or charitable sponsors. It will be payable upfront and for the total period of time covered by the certificate of sponsorship. So for a typical certificate of three years duration, the total charge will be £3,000.

An employer will usually only be considered to be a small business if:

• annual turnover is £10.2 million or less; and / or
• you have 50 employees or fewer.

Sponsors will need to pay the skills charge at the same time that they pay to assign a certificate of sponsorship to sponsor someone to do a skilled job in the UK.

Do your employment contracts give you any right of “claw-back” should an employee leave?

This new charge will add an additional financial aspect to the application process. It is therefore critical for employers to determine if a financial claw back for overseas sponsored workers will be appropriate in the documents governing an individual’s employment should that worker leave. We would be happy to discuss with you particular wording you may wish to include in your employment contracts this regard.

If you wish to discuss this new charge in any way or the changes that you should consider in your employment documentation, please do not hesitate to contact your usual Osborne Clarke contact or a member of our immigration team.