What do Immigration Reforms mean for employers?

Following the government’s plan to reduce migration, employers can expect substantial reforms to the sponsorship regime and work visas, something that will have a significant impact both organisations and overseas workers. It comes as part of the Government’s five-point plan to reduce net migration to the UK, announced in December and being brought into effect by changes to the immigration rules announced on Thursday 14 March.  

Senior Associate Sarah Keeley has summarised the impacts for the Business & Social Enterprise, Charity and Education Sectors. Calculating salary for sponsorship will become increasingly difficult under the new regime and employers are encouraged to contact our team for advice before assigning any Certificate of Sponsorship.  

What is the new salary threshold for Skilled Worker sponsorship?

Employers wanting to sponsor any new candidates from 4 April 2024 must be willing to pay whichever is the higher of (unless specific reductions apply): 

a) a general Skilled Worker salary threshold of £38,700 (raised from £26,200)

b) the going rate for the individual role (which is the 50^th percentile of UK earnings for the role based on 2023 pay data rather than 2021 pay data).

Health and Care and Education Sector occupations have a lower £29,000 general threshold, which can be reduced to £23,200.

What is the ‘going rate’ for any sponsored role?

The relevant SOC 2020 code will determine the going rate for the role.  The salary will be significantly higher than under current SOC 2010 rates and often significantly higher than the general threshold.   

For example:

• Programmer increasing from £34,000 to £49,4000

• Business analyst increasing from £32,000 to £48,000

It is these role specific increases that are likely to reduce the number of roles and individuals qualifying for sponsorship after April 2024.

Sponsors should note that some of the SOC they use regularly may be changing under the new coding system. An informed assessment should be made on the basis of individual job descriptions.

Are there any salary reductions available for graduate roles?

Yes. The good news is that a 20% salary discount will remain available for junior/entry level roles for “new entrants” including those under 26 years of age.  This would reduce the general salary threshold to £30,960 (or £23,200 for healthcare or education roles) and reduce the going rate by 30%.  The salary would still need to meet the higher of these two figures. 

The two-year graduate visa for recent graduates of UK universities will remain as a route to work in the UK without needing to meeting sponsorship salary levels in the short term.

The new entrant reduction is available for a maximum of four years and therefore salary must be reconsidered on any extension.

Are there reductions for PhD holders?

Yes. A reduced salary threshold of £34,830 and 10% reduction on the going rate will be available for workers with a PhD that is relevant to their role.  A reduced salary threshold of £30,960 and 20% reduction on the going rate will be available for workers with a PhD in a STEM subject.

Are there reductions for roles where there are known labour shortages?

The Shortage Occupation List has been replaced with a slimmed down Immigration Salary List (ISL) containing just 21 roles.  These roles have been actively selected to benefit from a 20% reduction on minimum salary level.  Non-healthcare ISL roles will have a £30,960 minimum salary.  Healthcare ISL roles will have a £23,200 minimum salary. 

What about existing Skilled Workers?

Existing Skilled Worker employees would not need to meet the £38,700 salary threshold in order to continue working on their current visa, or extend their visa, or apply to settle in the UK by 4 April 2030.  However, they would be subject to a general salary threshold increase to £29,000 and a rise in the going rate for the individual role (to the 25% percentile of latest data) at their next application.  For examples: 

• Programmer rate increased from £34,000 to £36,300

• Business analyst rate increased from £32,000 to £36,200

What salary is required for other work visa routes?

Increases to the general salary threshold other sponsored work visa routes are less significant:

• Senior Specialist Worker (Global Business Mobility) will be £48,500

• Graduate Trainee (Global Business Mobility) will be £25,410

• Scale-up route will be £36,300

How will this effect employers?

These are the biggest immigration reforms since Brexit are likely to disrupt UK recruitment practices for some time.  The salary threshold changes are likely to have the biggest impact on regional employers outside of London, and in sectors facing structural skills shortages including hospitality, transport, engineering and construction who cannot meet the salary threshold for sponsorship. 

When are changes due to take place?

The immigration rule changes will take place from 4 April 2024 (unless otherwise indicated). 

Is there still time to make an application under the old rules?

Yes.  Employers who have issued a Certificate of Sponsorship to a candidate before 4 April 2024 will have the associated visa application decided under the rules in force on 3 April 2024 ie under the old salary levels.  Typically, the relevant date to determine the law in force is that day the visa application is paid for online.  This rule grants a little more time to employers to manage this change.  However, there is a planned shutdown of the Home Office system from 19:00 2 April 2024 making this the practical deadline.

Can I employ Skilled Workers with a different sponsor?

Yes.  Please note that the rules on supplementary employment are also changing.  It is possible for Skilled worker to work up to 20 hours a week for a secondary employer, and this will no longer needs to be in the same role or profession as on their Certificate of Sponsorship.  This brings greater flexibility for employers and sponsored workers.

What actions should employers take?

Consider if there are any employees on graduate or youth mobility or other visas who require sponsorship to work in the long term and whether you can assign a CoS by the deadline to benefit from existing rules.   Consider how your organisation will adapt to these changes and how to train and support your HR advisors responsible for right to work check and immigration compliance.