There appears to be a slight oversight in the Immigration Rules, Appendix J, when it comes to the number of hours which the appropriate salary rates in the latest Codes of Practice are based on. Those familiar with the Tier 2 process will know that the appropriate rate requirements for Tier 2 applications are extremely strict. One of the primary concerns behind the Tier 2 sponsorship system is to ensure both that British and settled workers are not undercut by foreign workers, and also that migrant workers are not exploited. The minimum salaries stated in the Codes of Practice for each job are designed to prevent this, and are very strictly administered by the Home Office.
If you wish to sponsor a skilled migrant worker to work in the UK, in addition to having a Sponsorship Licence, undertaking advertising if the category requires it (what they call the ‘Resident Labour Market Test’, requesting a Certificate of Sponsorship (CoS) for them, you must, vitally, pay them at least the appropriate salary stated in the Code for their specific job role.
This appropriate rate requirement is not always easy to calculate, as this will depend on the number of hours the worker is contracted to work per week. But what is clear is that if a request for a CoS states a salary that is below the appropriate rate, the request will be refused. Even if the CoS and the application states a salary which meets the appropriate rate for the Code, the Home Office will continue to monitor that a sponsor is meeting the appropriate rate by checking records from HMRC, and will contact the sponsor warning that it must pay the appropriate rate or stop sponsoring the particular worker concerned.
Due to this inadvertent oversight we have identified in Appendix J however, it seems that employers can pay migrant workers slightly less than the rules intended. For such a notoriously strict requirement, it must be said that this is more than a little surprising.
Following is an explanation of this oversight and what it means:
Appendix J
Appropriate salary rates
14. Where these Rules state that an applicant must be paid the appropriate rate for a job as set
out in this Appendix, the rate will be determined as follows:
…
(e) The rates stated are per year and are based on the following weekly hours:
(i) Where the source is the Annual Survey of Hours and Earnings 2011, a 39-hour week;
(ii) Where the source is NHS Agenda for Change or the Royal Institute of British Architects, a 37.5-hour week;
(iii) Where the source is teachers’ national pay scales, on the definition of a full-time teacher as used when determining those pay scales;
(iv)where the source is the National Grid submission to the Migration Advisory Committee, a 37-hour week;
(v) In all other cases, a 40-hour week.
As some of you may know, the 04/14 Codes of Practice are worded slightly differently. These state:
The rates are based on a 39-hour working week for all occupations where the salary source used is the Annual Survey of Hours and Earnings.
Now, the eagle-eyed among you may notice that ‘2011’ has been omitted in the latest edition of the Codes, as the new rates are now based on the Annual Survey of Hours and Earnings 2013.
So, when it comes to salaries based on the 2013 Survey, which is it… 39 or 40?
Well, because it is part of the Immigration Rules, Appendix J must take precedence over the Codes of Practice, so for jobs where the salary rate was calculated based on the Annual Survey of Hours and Earnings 2013 (which most now are) it technically is ‘all other cases’, as the Annual Survey of Hours and Earnings 2011 was not used. This means it is 40 hours, and so employers can get away with paying marginally less then was intended when the new Codes were published.
To illustrate briefly, this one hour per week is a difference of 52 hours per year. A salary based on a 40 hour week rather than a 39 hour week means there are 52 hours per year more a sponsor can employ a migrant worker while still paying the same salary.
It is very doubtful that such a situation was intended.
Incidentally, in fact the 2013 Survey did use a 39 hour week as the basis for the salaries, but we can only assume that the Immigration Rules have not been amended yet in line with the latest Annual Survey of Hours and Earnings. This is obviously an oversight which will at some point be addressed, and the ‘2011’ removed from Appendix J.
However, it still hasn’t changed. And we know for a fact that the Tier 2 team has known about this for a while and done nothing. If you phone the Business Help Desk they are still claiming that the salary rates are based on a 39 hour week, even though, as we have just shown, the Immigration Rules say something else.