There are numerous requirements that employers sponsoring individuals under Tier 2 must meet. One of the more complex ones relates to the Tier 2 minimum salary criteria. We take a look at this complex area of law.
The minimum salary for Tier 2 workers depends on a number of different factors. These include whether the sponsorship will be under Tier 2 (General) or Tier 2 (Intra-Company Transfer (ICT)), whether the individual is a ‘new entrant’ or ‘experienced worker’, the Standard Occupational Classification (SOC) code, the number of hours to be worked and, not forgetting, minimum rates for Indefinite Leave to Remain (ILR) applications. It is not surprising that many sponsors find this a particularly complex requirement to navigate.
As a general rule, a sponsored worker must be paid at, or above, either the minimum salary for their SOC code, or the overall minimum salary for their circumstances, whichever is the highest.
‘New entrant’ or ‘experienced worker’
The Sponsor Guidance states that for an individual to be classed as a ‘new entrant’, and therefore be eligible for the lower salary rate, they must:
- be switching from the Tier 4 (General) category from within the UK after successfully completing their studies;
- be applying for leave under the Tier 2 (ICT) Graduate Trainee sub-category; or
- be under the age of 26 on the date that they make their application.
In addition, the individual must be making an application for leave to remain which will take their total time spent with leave under Tier 2 to no more than three years and one month. It is not possible to apply for ILR from the new entrant rate.
If the individual does not meet the above criteria, they will need to be paid at least the experienced worker rate or the overall minimum salary for the category of leave for which they are applying.
The specific SOC codes for jobs that can be sponsored are set out Appendix J of the Immigration Rules. These contain the minimum salary levels for new entrants and experienced workers.
When sponsoring a worker, the sponsor should carefully review the SOC codes to ensure that the salary to be paid is at least at the appropriate level for the role. If a salary does not meet the required level, then the worker’s application for a visa will be refused.
You can find information on how to choose a SOC code here.
When considering the minimum salary according to the SOC code, sponsors should also take into account the number of hours work the minimum is based upon. The majority of salaries are based on a 39-hour working week. However, there are some variations as set out in the SOC codes. This calculation can become very important where the worker will be paid the exact minimum salary for their role.
For example, if the minimum salary for a role is £30,000 for a 39-hour week according to the relevant SOC codes then, if the worker is contracted to do a 40-hour week for £30,000, their application would fall for refusal as they would not be deemed to be meeting the minimum salary requirement. Their salary would be deemed to be £29,250. A higher salary (£30,763) will need to be paid to take into account the slightly higher number of hours to be worked.
Absolute Minimum rates
Tier 2 (General)
Regardless of the rate set out in the SOC codes, the absolute minimum salary rate for new entrants under the Tier 2 (General) route is currently £20,800. Experienced workers must be paid a salary of at least £30,000.
If the relevant SOC code sets out a higher salary, this is the salary that must be paid.
Tier 2 (ICT)
Those seeking sponsorship under the Tier 2 (ICT) category must be paid a salary of at least £41,500, or the experienced worker rate as set out within the SOC codes, whichever is higher. The exception to this is if an individual is to be sponsored under the Tier 2 (ICT) Graduate Trainee route.
If applying as a Graduate Trainee, an individual must be paid at least £23,000 per annum, or the new entrant rate for the applicable SOC code, whichever is higher.
Indefinite Leave to Remain (ILR)
Individuals who have held leave under the Tier 2 (General) category for five years can apply to for ILR (also known as settlement). In order to do so, they would need to meet a number of requirements, not least a minimum salary requirement. The minimum salary thresholds up to 2024 are set out at paragraph 40.54 of the Sponsor Guidance.
There is an exemption to the minimum salary requirement for ILR for individuals whose roles appear on the Shortage Occupation List or are skilled to PhD level as per the SOC codes.
A new immigration system is due to be in force from January 2021 and the minimum salary levels will be different. You can find more information here.
An application that does not meet the minimum salary requirement will fall for refusal and due to the substantial costs involved with sponsorship, it is beneficial to get this right first time.
How we can help
We are experienced in advising both employers and individuals in relation to the minimum salary requirement and should you require any further information about this or any other aspect of sponsorship, please contact us below.