On 14 March 2024 the government published its latest statement of changes to the immigration rules, which included changes to a number of UK immigration categories.  The most significant changes were to implement the plans laid out by the Home Secretary in December.  These include raising the minimum income requirements for work visas, removing the reduced rate of pay for shortage occupations and replacing the shortage list with a new Immigration Salary List.

While the policy changes themselves are relatively concise, the implementation of these changes takes up about 180 pages of the statement of changes and the detail of the changes can be difficult to follow.  They deal not only with the new rules for future sponsored workers but also transitional arrangements for existing sponsored workers as well as the re-alignment of the Standard Occupational Classification (SOC) codes from the 2010 versions to the 2020 versions.

New Skilled Workers sponsored after 4 April 2024

The headline change for employers seeking to sponsor new Skilled Workers in the UK is that the minimum salaries are rising significantly. 

As is already the case, employers will need to pay the higher of the general threshold or the going rate for the job in question.  However both of these figures are seeing huge increases as part of the government’s decision to raise them from the 25^th percentile to the median. This means that instead of being paid more than a quarter of people in similar jobs, they need to be paid more than half of people in similar jobs.

The highlights are:

• The Skilled Worker minimum salary thresholds are increasing as follows:
  • Option A (most applications): from £26,200 to £38,700. Option B (relevant PhD): from £23,800 to £34,830. Option C (relevant STEM PhD): from £20,960 to £30,960. Option D (shortage occupation/Immigration Salary List): from £20,960 to £30,960. 
  • Option E (new entrants): from £20,960 to £30,960. 
• The appropriate rates detailed in individual SOC codes will also be increasing so that sponsored workers will be paid at least the median salary for that role.  These rates are set out in the new Table 1 of Appendix Skilled Occupations from 4 April 2024. 
• The 20% discount to the going rate for shortage occupations (Option D) will be removed, although the 10% discount for relevant PhDs (Option B), the 20% discount for STEM PhDs (Option C) and the 30% discount for new entrants (Option E) will be retained.  These discounts are included as separate columns in the new Table 1.
• The current Shortage Occupation List under Option D will be replaced with an Immigration Salary List, which contains fewer eligible SOC codes.
• Where an individual is applying to work in a role that is subject to a national pay scale, the minimum salary threshold will be £23,200 (Option K) but they must also be paid at least the appropriate rate set by the national pay scale for that role or salary band.  The eligible roles for national pay scales are set out in the new Table 3, with the updated going rates for NHS bands in Table 4 and educational roles in Table 5.

Although these changes mean significant increases in the costs of sponsoring Skilled Workers in most roles, the greatest impact will be felt by those roles which were previously on the Shortage Occupation List.  While the rise in the general threshold is a large additional cost, the loss of the 20% discount to the going rate combined with the increase to the median rate means that formerly shortage roles will see particularly large jumps in pay. 

For example, a software programmer who might be paid £27,200 under the current rules would be looking at rates of £49,400 from 4 April 2024 (an 82% increase).

Health and Care visas – new and old

The definition of who can qualify for a Health and Care visa is now being added to the rules.  This is welcome as the old guidance document on the government website had significant formatting issues that made it hard to follow.  However, the actual definition of the sponsorship that falls into the Health and Care route does not appear to have changed.

Applicants in the Health and Care route will be protected from the worst of the changes in salary requirements.  Where the role is not subject to a national pay scale (see above), there will be smaller increases in the thresholds and going rates to keep place with the market but these will still be based on the 25^th percentile instead of the median rate.  The adjusted general thresholds that will apply to Health and Care visas from 4 April 2024 are:

• Option F (most applications): from £26,200 to £29,000. 
• Option G (relevant PhD): from £23,800 to £26,100. 
• Option H (relevant STEM PhD): from £20,960 to £23,200. 
• Option I (shortage occupation/Immigration Salary List): from £20,960 to £23,200. 
• Option J (new entrants): from £20,960 to £23,200. 

The going rates for Health and Care visas are set out in the new Table 2 of Appendix Skilled Occupations from 4 April 2024.

What if I assign a Certificate of Sponsorship (CoS) before 4 April 2024?

If an applicant has been assigned a CoS before 4 April 2024 and it has not expired when they submit their application, the application will be decided in line with the rules in force before 4 April 2024.  Therefore any employers who are seeking to sponsor Skilled Workers in the near future would be advised to assign the relevant CoS before this date if at all possible to avoid having to meet the higher thresholds. 

It is worth remembering that the application must be submitted within three months of the CoS being assigned and up to three months before the start date on the CoS, so it could be possible to assign a CoS now for someone to apply in nearly six months’ time.  However the difficulty at the moment may be in securing the CoS allocation from UKVI in the first place as they appear to be overwhelmed by applications trying to get in under the line, with Defined CoS applications proceeding at a crawl and the priority service for Undefined CoS applications experiencing over 1,000 requests for 60 slots daily.

To add to the difficulty of getting a CoS assigned before the deadline, the government has announced that the sponsorship management system will be down for maintenance between 7pm on 2 April to 9am on 4 April in order to update the system to the new 2020 SOC codes.  This means that sponsors actually have two fewer days to assign the CoS than they might think and the fact this runs on directly from the Easter long weekend further impacts sponsors’ ability to get this done before the changes.

Sponsors should note that if a Defined CoS allocation is granted before 4 April 2024 but is not assigned by this date, the allocation will be cancelled and a new request must be submitted via the sponsorship management system (in accordance with the rules after 4 April).  Any Undefined CoS allocation unused on 4 April will remain valid but when a sponsor assigns it they must follow the rules from 4 April.

What about existing Skilled Workers applying to extend or change employers?

If someone has held continuous permission as a Skilled Worker that was originally granted before 4 April 2024, they will be partially protected from the increased salary rules in the same way as Health and Care visas.  The same adjusted thresholds above will apply to extension applications or applications to change employers and the 25^th percentile going rates set out in Table 2 will apply.

Some SOC codes which are eligible for sponsorship under the current rules will no longer be eligible after 4 April 2024 because they are now deemed to be skilled below RQF Level 3 – these are listed in the new Table 2a of Appendix Skilled Occupations and include examples such as nannies, concierges, fashion stylists and car salesmen. 

If an individual has continuously held permission as a Skilled Worker since before the new rules come in and the SOC code of the role is in Table 2a, the individual can only apply for an extension to continue working for the same employer.  It will not be possible to apply to change employers if the SOC code is in Table 2a.

What if a person is currently sponsored in a shortage occupation?

The Home Secretary announced in December that the government would be removing the 20% discount to the going rate for roles on the Shortage Occupation List and would also be replacing the current list with a new Immigration Salary List.  He later asked the Migration Advisory Committee (MAC) to carry out a rapid review to see which jobs would be included on the new list. 

The committee recommended that the current list of 55 roles be cut back to just 21 roles on the new list.  The biggest set of cuts were based on the committee’s reasoning that, whether a recognisable shortage or not, there was no tangible benefit to be had by them being on the list.  This was because the primary benefit to being on the list was a reduction in the general threshold but, as a result of the decision to raise going rates for new visas to the median, in many cases the going rate would outstrip the new threshold and a reduction here would have no impact.

As a result of this change, many roles which were on the Shortage Occupation List were not transferred to the Immigration Salary List.  If a Skilled Worker is currently sponsored in a role which was included on either list but is no longer on the list when they make their next application, they will still be able score points for the lower threshold and the 25^th percentile going rate, but only if they will be extending their visa to continue working in the same role for the same sponsor. Otherwise they will need to meet the higher threshold and the 25^th percentile going rate in Table 2 for Option F.

Note: Although Tables 1 and 2 in Appendix Skilled Occupations both indicate that applications under Options D and I are eligible to pay 80% of the going rate, it is understood that the Home Office has since confirmed this to be a drafting error and the full going rate must be paid in both cases.

Changes to Global Business Mobility routes

In line with previous the Migration Advisory Committee’s recommendations, the government has increased the threshold salaries for other sponsored work routes where these apply.  For the Global Business Mobility routes, most thresholds are being raised from £45,800 to £48,500 while the Graduate Trainee route threshold is being raised from £24,220 to £25,410. 

Going rates for the Global Business Mobility routes will continue to be based on the 25^th percentile of roles within the relevant SOC code and so can be found in the new Table 2 of Appendix Skilled Occupations, with Graduate Trainee continuing to benefit from the 30% discount to the going rate.

The senior or specialist worker route within this category has seen much less use by sponsors since the Skilled Worker rules were introduced in December 2020 and negated the greatest benefits of the Intra-Company Transfer route, as it then was (namely the lack of a resident labour market test and annual quota). 

However, the increases to the threshold and going rate for Skilled Workers may mean that senior and specialist workers becomes comparably more attractive.  While the £48,500 threshold is still higher than even the new Skilled Worker threshold, the median rate for many SOC codes is likely to be higher still. 

For example, the median rate for a business development manager is £52,500 so this is the amount a sponsor would need to pay a new Skilled Worker.  However, the 25^th percentile rate for a senior or specialist worker in the same role is below the new Global Business Mobility threshold of £48,500 so it would cost a sponsor less to use this route.  It may also be easier for sponsor to meet this level of salary as they would be able to include some allowances which are prohibited under the Skilled Worker route. 

On the downside, the route still requires the applicant to meet the requirement for employment by an overseas business and would not be eligible for settlement on this route.  It may however become a more attractive route for sponsors seeking to fill short term positions where Skilled Worker may previously have been the default.

Some SOC codes which are eligible for sponsorship under the current Global Business Mobility rules will no longer be eligible after 4 April 2024 because they are now deemed to be below RQF Level 6 – these are listed in the new Table 2b of Appendix Skilled Occupations and include examples such as CAD technicians, interior designers and care home managers. 

If an individual has continuously held permission as a Global Business Mobility migrant since before the new rules come in and the SOC code of the role is in Table 2b, the individual can apply for an extension to continue working in that role.  If they have not held continuous permission in this route, they will not be able to apply under the Global Business Mobility route in this code but such a role should still meet the required skill level for sponsorship under the full new Skilled Worker codes (using the £38,700 threshold and the median rates of pay).

Changes to the scale-up route

The government has also increased the threshold salary for the scale-up route, raising this from £34,600 to £36,300.  The going rate for this route continues to be set at the 25^th percentile as set out in Table 2.  Both the threshold and the going rate are now set lower than for Skilled Workers, despite the scale-up visa technically being a more skilled route (RQF Level 6). 

Combined with the lower licence fee, CoS fee and lack of Immigration Skills Charge, this will be a very attractive alternative for eligible sponsors going forward.  However, it continues to be a niche route with difficult growth criteria to qualify for the licence.

Unlike the other sponsored work routes, the scale-up route will enjoy full protection from salary increases where a visa holder already has permission on the route.  This is a logical decision since the salary requirements to be met for the other routes are based on future pay, while the salary requirements a scale-up worker needs to meet for extension and settlement are based on earnings in the preceding two or three years.  Therefore scale-up workers who originally applied on or before 11 April 2023 will still need to show qualifying PAYE earnings of £33,000 and those who applied between 12 April 2023 and the new rules coming in on 4 April 2024 will need to show qualifying PAYE earnings of £34,600.

MAC recommendations – accepted or not?

During its rapid review of the Immigration Salary List, the Migration Advisory Committee noted that the government had accepted its recommendation in the autumn to remove the 20% discount to the going rate for shortage occupation roles on the grounds that it risked undercutting resident workers’ salaries. 

However, it also noted that this recommendation had been in the context of salaries being based on the 25^th percentile, and that with the increase of salaries to the median rate there was much less chance of resident workers’ salaries being undercut (as the starting point would be that pay must be higher than half of workers in such a job). 

The committee therefore recommended that the government reconsider its decision to implement both changes at the same time.  The Home Secretary did not address this recommendation in his response to the committee but there was no change in direction when the statement of changes was published and both policies are being implemented simultaneously.

The government accepted the majority of the committee’s other recommendations with regard to the Immigration Salary List.  However, they did decide to retain two fishing occupations on the list despite the concerns over exploitation in the sector. 

The government determined that the sector needed more time and support to resolve its problems. It was noted that the rise for even jobs that are on the Immigration Salary List to £30,960 would constitute a significant rise that might wean the sector off its reliance on immigration to fill vacancies. This would then mean that only well-paying employers would be able to use the route. 

The two fishing roles are therefore being included on the route “temporarily”, pending the committee’s full review of the list later this year, which the government will commission shortly and will allow full public consultation and engagement.

The government has also accepted the committee’s recommendation to change the rules for creative workers so that sponsors can no longer rely on the resident labour market test exemption due to a job being on the Shortage Occupation List (or on the new Immigration Salary List).  The new requirement is that, where there isn’t an established code of practice for the occupation, the sponsor must be able to demonstrate that the worker can make a unique contribution to creative life in the UK. 

A recommendation that was not accepted was to implement a minimum salary threshold for the creative worker route.  The committee was concerned that the lack of a minimum salary already led to undercutting the salaries of resident workers and this would be exacerbated by the new Skilled Worker rates, leading to more sponsors using the creative worker route when it may be less appropriate.  However the government concluded that this would be incompatible with the diverse and often short-term nature of roles within the creative industries.

The effect of these changes on those in the asylum system

At present the only jobs asylum seekers are allowed to do (and only if they have been waiting over 12 months for a decision through no fault of their own) are roles on the Shortage Occupation List.  With this list replaced by the Immigration Salary List on 4 April, the government has ignored the Migration Advisory Committee’s recommendation that those asylum seekers who are permitted to work should be allowed to contribute in any occupation, or at the very least all skilled occupations.  

With tens of thousands of asylum seekers and dependants stuck in limbo (at the expense of the public purse rather than able to support themselves and contribute to the economy), the statement of changes instead restricts permitted jobs even further to the very few shortage occupations which make it onto the new Immigration Salary List.  This contrasts starkly with the decision to allow Skilled Workers to undertake broader supplementary employment than before.  

Currently, Skilled Workers can only undertake supplementary work up to 20 hours a week in the same profession and professional level as their sponsored work, unless that additional work is in a shortage occupation.  From 4 April, Skilled Workers will be able to undertake supplementary work in any role that would meet the skill level for sponsorship – exactly what the committee had recommended should be allowed for asylum seekers, but isn’t.

What does this all mean for employers?

Employers who already pay well and who would already be paying a prospective Skilled Worker above the median rate are likely to be unaffected by these changes.  However this is more likely to apply to professions that are already traditionally high-paying, such as senior roles with large companies or roles in certain sectors such as finance. 

Smaller companies and start-ups are more likely to struggle to pay higher salaries, while sectors that are skilled but tend to be lower paid are likely to only be able to pay higher salaries for the most experienced people and will struggle to recruit entry level roles or new graduates.  In the latter case, awareness and best-use of the new entrant rules for student and graduate visa holders will be key.

The healthcare sector will benefit from lower requirements where the role meets the Health and Care route rules. In addition the committee noted that, by preserving the low threshold and national rates for public sector health and educational roles on national pay scales, the government had effectively insulated themselves from the changes – this will facilitate sponsorship in those roles but also lead to larger discrepancies between public and private sector pay in similar jobs.

In general, the massive increases to the qualifying salaries for sponsored work visas are likely to cause significant problems for employers in the UK to recruit skilled workers.  Where possible, employers can still turn to unsponsored routes, such as family visas, ancestry, youth mobility or graduate/high potential routes. But this will diminish the pool of available candidates and, in the latter cases, are short-term routes that the employer may be forced to fill again if they are then unable to sponsor the person under Skilled Worker. 

The changes could also lead to more uptake in other sponsored routes, due to the fact that Global Business Mobility and scale-up salaries are not being raised to the median rate. But these categories have their own difficulties in terms of eligibility and in terms of long-term retention of staff, as the former has an upper time limit while the latter does not tie the employee to the sponsor beyond the first six months.  As the committee itself noted, the creative worker route is also available to sponsors in the creative sector and has no government-imposed salary thresholds, but is also a temporary route.

Employers would be best advised to consider the whole range of visa routes which allow holders to work in the UK and weigh up the short and long-term advantages and disadvantages when considering the best options for both the employer and the candidate.

However, some employers will simply find themselves unable to fill vacancies due to a lack of candidates with the right to work in the UK, together with being priced out of sponsoring new arrivals. Faced with the combined growth barriers of escalating business costs, sponsorship costs and the inability to recruit in the UK, some employers may inevitably decide that operating in the UK is no longer economically viable.