Immigration experts have warned that some sectors are likely to be priced out of the market for new sponsored workers, under the changes to immigration rules detailed in the Statement of Changes issued by ministers yesterday (14 March). One specialist has described the changes as a ‘reckless act of national self-harm’.
The government announced in December 2023, in the wake of record net immigration figures, that salary thresholds and “going rates” would significantly increase from 4 April 2024. The minimum salary rate is being increased by 48% from £26,200 to £38,700 a year from April.
The government ignored the advice the Migration Advisory Committee came back with” – Vanessa Ganguin, immigration law specialist
The Shortage Occupation List (SOL) is being replaced by an Immigration Salary List (ISL) with 21 roles – down from 54 on the SOL. This number represents only 8% of job roles eligible for the skilled worker immigration route. Previously, about 30% of job roles eligible for the skilled worker route were on the SOL.
Although the 20% discount to the threshold rate (£38,700) has been retained for jobs on the new list, there is no discount to the going rate which can often be much higher.
Immigration
Care firm struggling to access migrant workers because of permit delays
For Jonathan Beech, head of immigration law specialist Migrate UK, the £38,700 figure “is only part of the story” because those entering into the skilled worker category will also need to be paid a much increased going rate for the vacancy along with a minimum of £15.88 per hour – whichever is the higher.
Beech anticipates that the changes are bad news for engineering firms seeking talent – “the type of job you’d expect the UK to be desperately attracting”, he says. “With the increase in going rate and the removal from the new ISL, employers wishing to sponsor skilled workers moving to the UK for an engineering vacancy will have to pay up to an extra 58%.”
He points out that other industries affected will be hospitality and the horse racing and breeding industry. Although horse racing and breeding grooms and work-riders are included on the new ISL (bringing the threshold down from £38,700 to £30,960), the minimum hourly rate increase from £10.75 to £15.88 could see an increase of 30% to the minimum salary due to the long contracted weekly hours.
Many businesses will have to close the door on foreign graduates” – Chetal Patel, head of immigration, BatesWells
Given the sharp cost increases for businesses, anything remaining the same is a positive. Beech adds: “One piece of good news is that the threshold and going rate salary discounts offered to those with PhD qualifications, those performing PhD level roles and ‘new entrants’ to the market have been retained.
“Also, those currently on skilled worker status need to meet different earnings criteria. Although higher than currently, the difference is not as stark as those entering the scheme for the first time.”
For Chetal Patel, head of immigration at BatesWells, the changes represent “the biggest reform of UK work routes since Brexit” – and that will see smaller companies – particularly those in more creative and design-led sectors – likely to be badly hit.
“Many businesses will have to close the door on foreign graduates if they can’t meet the new salary thresholds,” she says. “Hiking up salaries simply won’t be an option for some employers.”
Patel adds that among her clients architectural practices were particularly anxious over the changes. She says: “Architects previously benefited from being on the Shortage Occupation List but aren’t on the new Immigration Salary List which means from April, employers will need to pay a minimum of £45,900 to hire them on a Skilled Worker visa. This will be a devastating blow to the sector as it’s going to be more difficult to recruit early-career architects. The UK’s global reputation as a design hub of the world could be at risk.”
She adds that one of the tweaks means a significant widening of scope for skilled workers who wish to undertake supplementary employment. “These individuals will now be able to work in any occupation that is eligible under the Skilled Worker route – rather than the role needing to be in a shortage occupation or the same occupation as the main role – provided they remain working for their sponsor in their sponsored role and the supplementary employment is outside their contracted working hours and for no more than 20 hours a week.”
Immigration law specialist Vanessa Ganguin says that “making Britain’s post-Brexit immigration system less affordable right now would seem a reckless act of national self-harm at a time this nation could really do without it”.
As we have seen, small and medium-sized firms, including the IT sector, were likely to be badly hit by the changes. The steep rises in the pay threshold were “not a nightmare perhaps for the big tech brands in the capital, but punitive for tech start-ups and employers outside the capital that can’t pay London wages,” says Ganguin.
Ganguin pointed out that under the Shortage Occupation List fishing boat operators were able to sponsor deckhands on large fishing vessels from £14,400. From April they would have to pay £30,960 – an enormous amount of extra cost for an industry already hit hard by Brexit.
She warned that immigration lawyers were noticing a “chilling effect” on clients and projects outside London.
“One of our clients is involved in delivering flagship engineering projects to secure Britain’s energy independence. They are very concerned that the current £31,440 salary they would have to pay an electrical engineer they hire on a skilled worker visa is set to leap up to in the region of £53,500 in April.
Ganguin says: “The government commissioned the Migration Advisory Committee to review replacing the Shortage Occupation List but has ignored the advice it came back with to reconsider removing the 20% going rate discount for shortage occupations.”
The rises in immigration have been at least partly fuelled by skills shortages, particularly in healthcare, she adds. “Skilled Worker visas actually fell 1% in 2023, while Health and Care visa grants almost doubled year on year (+91%) to 146,477. But it is British private sector businesses that bear the brunt of the government’s hike in the cost of filling skills gaps with non-resident labour.”
Our clients are understandably anxious to get all their relevant overseas recruitment in place ahead of the deadline
Companies have been reporting delays in application processing for several months, with this “surge” beginning late last year in the aftermath of the original announcement.
Yash Dubal, visa expert and director of A Y & J Solicitors, believes the Home Office is overstretched. Each day at 9am the Home Office allocates 60 slots for priority requests for Certificates of Sponsorship (CoS). These are electronic documents with a unique reference number that the sponsoring employer issues to a visa applicant. Without a CoS, an applicant is unable to apply for leave to remain in the UK, under the skilled worker route.
Dubal says: “The system is experiencing such demand currently that all priority slots are taken by 9am most days.”
He adds: “The rush to complete the visa process ahead of the increases was inevitable given the size of the increase. Our clients are understandably anxious to get all their relevant overseas recruitment in place ahead of the deadline, at which time many roles that would previously have qualified for a skilled worker visa will be effectively priced out of the international market.
“Whether there are enough domestic workers to fill these roles, such as chefs, restaurant managers, retail managers, pharmacists, vets, mechanics, and electricians, remains to be seen.”
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