The UK Border Agency’s new harder rules pertaining to immigration may have an impact on the staff costs for Indian IT firms. According to reports, the costs are likely to increase by about 2 million Euros per year. New immigration guidelines, which were introduced in the United Kingdom in April, 2010 have already made many IT firms that employ Indians to review minimal wages offered for employment.
As per reports, Indian IT companies like Infosys Technologies and Wipro have already made the adjustments in order to abide by the alterations made to the guidelines in respect of wages in the United Kingdom. The UKBA ensured that migrants are being paid a suitable salary rate in order to make sure that the country’s labor market is not underrated, as well as to maintain a balance between overseas workers and local workers.
According to the nation’s immigration agency, ‘Certificate of Sponsorship’, issued by the employer must include the total salary package of an overseas worker. The salary quote must include the actual, not estimated allowances, as well as tax that incur.
As for Indian IT companies, they usually add an exemption benefit while they calculate the minimum wages for employees. In other words, employees are not liable to pay tax on costs on items, which fall under dispensation benefit, for instance, on travel and telephone. The glitch attached to this system is that companies are required to wait till the year end in order to determine the amount of exemption that can be claimed for an overseas employee. As the minimum wages of an employee was required to pay when the employee enters the nation, these companies used to accumulate a notional tax while calculating his/her salary. But, with the new UK guidelines, now the companies have to get rid of this system in order to maintain relative wages for foreign workers and local workers. As of now, many companies changed their policies to abide by the guidelines set by the UK Border Agency.
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