Investigating Outsourcing

Nov 6 2010   10:56AM GMT

Will £40,000 minimum salary curb intra company transfer immigration loophole?

KarlFl40 Profile: KarlFl40


The alleged abuse of the Intra Company Transfer (ICT) scheme could diminish through a minimum salary level set for workers using this route into the UK.

The government is reported to be about to introduce a minimum salary of £40,000 for ICTs.

This follows the outrage sparked by the exclusion of ICTs from the final immigration cap.

The £40,000 minimum salary should help stop suppliers bring staff in from low cost locations, and pay less than their UK equivalents. It will also give a fair deal to those overseas workers in the UK.

“This should be some good news for UK IT workers and for underpaid workers sent to the UK,” said one campaigner.

Most campaigners against ICT abuse are not against overseas workers coming to the UK. They just think it is unfair that UK workers can’t compete because the overseas workers are not paid appropriately.
It seems I got a mention in a Home Affairs committee.

8  Comments on this Post

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  • James Allen
    Hi Karl

    1. Congrats on the name check.

    2. Whatever the result of the migration cap one thing is for sure more and more people are aware of the use of ICT to bring Indian IT professionals. Which from my point of view is a good thing.

    3. The salary cap of £40,000 will only work if they stop the abuse of allowances. The allowances were only for people who were planning to be in the UK for a few months, not two years which is standard for IT companies.

    4. Hopefully a £40,000 cap plus stopping the abuse of allowances would stop the transfer of workers.

    5. We need a mainstream newspaper to publish a story jsut about how the ICT is being used.

    6. When companies like TCS bid for Gov contracts and start offshoring and using ICT, then prehaps the Unions will take this matter seriously. I don't feel the unions really bother much with the (mis)use of ICT. I've worked for 2 companies in the past 4 years where they've made IT workers redundant and have made increase usage of Indian IT suppliers to provide IT resources.

    In both cases the union hasn't made much noise. Aside from the ''this is an outrage etc...' which seems a standard response.

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  • James
    Additional point - I wonder how the MAC (Migration Advisory Council) are feeling. This is a body full of experts on immigration, in particular economic migration. They were instructed by the Home Office to consult with all stakeholders and issue a report concerning Tier 1 and 2 cap limits.

    Their report isn't due to be published until Nov 18 so how on earth are the gov able to exclude all ICT before hearing from the professionals?

    To put things in context the MAC has investigated the issue of ICT before and has expertise in this area. They suggested something should be done about the allowances misuse, which the UK Border agency ignored.

    I am hopeful the MAC will provide more insight into the use of ICT and will force the gov to increase the salary cap for Indian IT companies to a rate higher than £40,000.

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  • Matt
    Given that most of the ICTs I've encountered were basically Indian graduate trainees being trafficked into the UK to gain experience at the UK taxpayer's expense, it would be good to see something like the £40K floor on salaries being introduced, as this would not only keep the ICTs out but might actually reverse the current trend of shrinking salaries and opportunities for UK graduate trainees. Although I doubt very much that such an eminently sensible proposal, which is in the clear interests of both the UK IT workforce and the UK taxpayer, has the remotest chance of getting past the political puppets who guard the interests of their corporate chums so enthusiastically.

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  • madcrazypenguin
    James, I wouldn't see the MAC as a knight in shining armour riding in to rescue IT jobs for British workers.

    Not only do they have input from very large Indian business interest pressure groups like Nasscom they also have a business centric focus.

    When I spoke to them about ICT abuse last year the response I got could be summarised as "ICT is very valuable in ensuring British companies competitiveness, and while a small number of companies may be abusing the system overall it is good for British business".

    Myself I'd prefer the government to listen to the PCG or Apsco but thats never going to happen.

    We have the best Government money can buy

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  • Vinnie Cable
    The rules will be

    if employee on an ICT has to earn more than £40,000 to be granted a 3 yr stay.

    if he earns below 40k but more than 24k he can stay in the UK for a year

    if he earns below £24k he won't be banned form transferring to the UK.

    The allowances will remain (95% sure about this, the other 3 statements above i am 100% sre about)

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  • ArgieBee
    That sounds like a believable proposal. Unfortunately it would be too low to reduce onshoring and offshoring.

    Up to one year on a below minimum wage salary plus expenses is still perfect for knowledge transfer for offshoring.

    Up to 3 years on a well below average salary plus expenses would still be adequate for onshoring staff at client sites and still be much cheaper than employing UK workers to send to client sites.

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  • Mark
    The level is too low and should have been £50k per year.

    Expenses must not be included.

    All salaries must br paid in UK and subject to PAYE. Any expenses paid, must be in additon to the minimum salary.

    I bet it won't.

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  • ArgieBee
    "Vinnie Cable" got it spot on and that was 10 days before the announcement.

    I wonder if they can give any more predictions.

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