Contractor group backs wage cap on ICT work permits

The government has confirmed it will tackle the abuse of intra company transfers by wage capping, in what one industry body calls a “huge step forward” for UK contractors on the back-foot from fears of being displaced or undercut.

From April 1^st, new rules from the Home Office will prevent companies transferring lower paid professionals – those earning under £40,000 - to the UK for more than one year under the ICT regime.

To be introduced with the immigration cap, which will apply to other types of permit, the measures should ensure skilled UK-based professionals are not “side-stepped” through ICTs, said the contractor body PCG.

Partly, this is because non-EU workers on £24,000 or more (but less than £40,000) will have their ICT restricted to 12 months, at which point they must leave the UK without being able to reapply for a year.

Earning over £40,000 entitles the worker to at least one year in the UK, yet the ICT will actually be issued for three years with the possibility of extending for a further two, equating to a maximum stay of five years.

Still, “the consensus is that from here onwards” the rules governing ICTs are “unlikely to get more liberal,” said the PCG’s Simon McVicker, welcoming the Borders Agency’s announcement last week.

But he signalled that further improvements could still be made to the ICT regime, by saying that intra company transfers should, “in future”, fall under the annual immigration cap.

Only then will the UK reach its “optimum productivity,” as the cap controls the import of non-EU workers dependent on skill shortages in that sector of the UK jobs market which the workers would enter.

The appeal is at odds with staffing body the Recruitment Employment Confederation, which says bringing the ICT regime under the cap would undermine the “international mobility” of staff which UK employers need.  

Other agency and IT market commentators also doubt that wage-capping at the proposed thresholds will actually make much of a difference, as do some IT staff unions.

However, for coming after years of negotiations with state officials, PCG said the new ICT rules still represented a “huge step forward,” although the group warns that past abuse of the system means that their enforcement will need close monitoring.

Editor's note: Further reading:  Intra-Company Transfers & Work Permit updates