The increase to the skilled worker visa minimum salary could be disastrous for employers in the care, IT, and hospitality sectors, as well as the regions outside of London.
Yesterday home secretary James Cleverly outlined plans to increase the minimum salary threshold for a skilled worker visa in the UK from £26,200 to £38,700, scrap the 20% discount on salaries for roles on the shortage occupation list (SOL), and increase the minimum income for family visas to the same level as for skilled workers.
The changes are set to come in in spring 2024, giving employers only a few months to prepare.
A 66% increase to the immigration health surcharge that migrant workers have to pay to help fund NHS care will also be implemented on 16 January 2024.
Chetal Patel, head of immigration at law firm Bates Wells, said the announcement will come as a blow to many organisations, but especially SMEs who even under the current requirements are the most likely to struggle to recruit from overseas.
“The UK is still struggling to plug the gap with homegrown talent, despite the government at the time of Brexit stating that businesses would be expected to upskill local labour.
“This is a significant hike in minimum skilled worker salary requirements and many will undoubtedly be priced out of the market – they simply won’t be able to sponsor workers in critical roles.”
Work visa changes
Government hikes work visa salary threshold
Patel said there would likely be a surge in sponsor licence applications from employers that wanted to submit skilled worker visa applications for workers ahead of the salary uplift.
However, she suggested that some employers were already attempting to pass increased costs on to workers: “With increases in Home Office fees as well, more and more employers are implementing repayment policies with clawback tapering provisions to offset some of the fee increases.”
Vikki Wiberg, senior counsel in the mobility team at law firm Taylor Wessing, said the impact of the changes will depend on what will happen to the shortage occupation list, which will be reformed by the Migration Advisory Committee into the “Immigration Salary List”.
However, she expects many junior roles and roles outside of London will no longer meet the required salary unless employers are willing to pay a lot more for overseas talent. She said that the average 2023 salary in the North East, for example, is £31,200, significantly below the £38,700 threshold, whereas in London the average salary was £44,370.
Impact on entry-level and hospitality roles
Graduate employers may also struggle to access talent under this immigration route, as Totaljobs data shows the average graduate salary in London is £29,000, said Wiberg.
She said: “The base salary applying to the Skilled Worker route will increase from £26,200 to £38,700 which will take many more junior roles outside of sponsorship. This will particularly impact hospitality companies.”
Responding to concerns raised about the potential impact on the tourism and hospitality sectors sector, Cleverly told MPs that hospitality was “a fantastic employer of local people” and suggested that recruitment at a local level is what the government wanted to see.
However, there are currently 174,000 hospitality vacancies across the UK, according to Hospitality Talent UK director Ed Godwin, who said that the increased salary threshold would exclude 95% of the candidates who entered the industry under the skilled worker system last year.
The base salary applying to the Skilled Worker route will increase from £26,200 to £38,700 which will take many more junior roles outside of sponsorship. This will particularly impact hospitality companies.” – Vikki Wiberg, Taylor Wessing
“Whilst we would agree that training plays a huge part in the long-term sustainability of UK hospitality, along with sector perception and wages, these plans are at best medium-term and more likely, long-term solutions. This is an issue now,” he said.
It will also result in upward pressure on wages, Godwin added: “Since 2022 the number of chefs being paid over £50,000 has increased by over 350% as operators race to secure limited talent. Wage increases for skilled roles is in some ways a good thing, but don’t be fooled into thinking that businesses will simply absorb these costs. They can’t.”
Changes to the roles on the shortage occupation list could “particularly impact startups and smaller companies who face difficulties recruiting into many roles particularly for IT experts and engineers”, said Wiberg.
Jonathan Beech, managing director of immigration law specialist Migrate UK, said some of the roles on the current version of shortage occupation list that have lower qualification requirements could also be affected.
“Hiking the current salary threshold of £26,200 to £38,700 for skilled foreign workers is a significant increase and will diminish eligible RQF Level 3 roles (‘A’ level standard) within sectors such as hospitality, horseracing and manufacturing that were added to the skilled occupation list in December 2020. This is because the median wage being set as a minimum is much higher than the current industry ‘going rate’,” he said.
“There is now an anxious wait for the Migration Advisory Committee to redraft its recommendations for the shortage occupation list. [It] could still be relevant as there was a brief mention that a special salary rate will be applied to the roles on the SOL. This is the hope as it will be needed to keep some industries afloat.”
It will mean, however, that we have the care workers we need and not the estimated 120,000 other people who have come with them in recent years.” – James Cleverly, home secretary
Family visa changes ‘damaging’
There are concerns about whether the changes to the financial requirements for family visas could exacerbate worker shortages in the care sector. Beech described this as the “most damaging” change announced by Cleverly, and said he had appeared to “put the economy first and uniting families a distant second”.
Conservative MP Damian Green raised this concern with the home secretary in the House of Commons yesterday, stating: “There is a shortage of about 150,000 in the care sector at the moment, and I hope that the new approach is not a significant contributor to the reduction in numbers. If it is, it will cause damage to the care sector.”
Cleverly responded: “Although an individual with a family might be dissuaded because of the restrictions on family members, someone who does not have those family commitments will almost certainly be willing to put themselves forward, so we do not envisage a significant reduction in demand because of the changes.
“It will mean, however, that we have the care workers we need and not the estimated 120,000 other people who have come with them in recent years.”
He said the restrictions would extend to children of workers. “Whether they are children or out-of-work adults, the simple truth of the matter is that that creates a burden on the British welfare system, the education system, housing, school places and GPs’ surgeries.”
However, Labour and Co-operative Party MP Rachel Maskell said that a global shortage of health and care workers would mean workers would likely go to other countries that accept dependants.
Conservative MP George Eustice questioned whether the government’s immigration policy “gives preferential access to bankers, lawyers, accountants and economists, even though we have no need for such people” and suggested it made it “difficult to recruit the people we do need: care workers; people in the food industry and in manufacturing, or producing things generally; or in the tourism industry”.
However, Cleverly claimed that the “vast majority” of migrant workers to arrive in the UK in the past couple of years “are in the lower end of the skills spectrum”.
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1 comment
The government’s has now admitted they are out to destroy our nhs…nurses and care staff don’t earn anywhere near the min income requirements so in return very soon they will have to answer to the public why they carried on charging us all national insurance for nhs services that is no longer going to exist as they won’t be able to fill the job vacancies as no one will be able to afford the visa min income new rules…don’t see many people in britain accepting the rubbish wages the government offers to nhs nurses etc….the government in my opinion is deliberately making it harder in order to push through privatisation quicker so then they can force private medical cover on us all