New Immigration Rules bring in Significant Changes to the Skilled Worker Sponsorship System

On 14 ^th March 2024, a Statement of Changes to the Immigration Rules was released setting out the legal framework which will underpin these changes. These new measures will apply to all skilled worker visa applications made with a Certificate of Sponsorship assigned post 4 ^th April 2024.

What are the current rules on Salary thresholds?

Skilled worker sponsorship requires an employer to offer a job to a would be employee which meets certain skill and salary thresholds. When the Points Based Immigration System was launched in late 2020, both the skill and salary thresholds were dropped, deliberately to broaden out the scope of the skilled worker sponsorship system to lessen the impact on businesses of the end of free movement. Currently, a skilled worker visa application must be equal or above all of the following salary thresholds:

• £26,200 per year; and
• £10.75 per hour; and
• The going rate for the Standard Occupational Classification code which is currently set at the 25 ^th percentile of the ASHE data from 2021.

What are the changes to the skilled worker route from 4 ^th April 2024?

The salary thresholds are going to increase significantly for many occupations and sectors and assessing eligibility based on salary is going to become much more complex. For any skilled worker applications submitted with a certificate of sponsorship assigned after 4 April 2024, the following thresholds will apply:

• Increase the minimum earnings threshold for Skilled worker visas from £26,200 to £38,700;
• Raise the individual occupation "going rate" thresholds from the 25 ^th percentile from ASHE 2021 to the 50 ^th percentile under the ONS ASHE data from 2023.

The good news for existing Skilled Worker visa holders is that they will not be impacted by the worst of these increases, however they will experience a raise in the individual occupation "going rate" thresholds in line with the 25 ^th percentile full-time wage for equivalent jobs as the thresholds will be based on 2023 data instead of 2021. The general salary threshold will also increase to £29,000. The lower salary thresholds will only apply to applications made before 4 April 2030 provided the worker has continual visa permission as a skilled worker until this point.

The Home Office is also adopting the new ONS SOC 2020 coding system, replacing the existing ONS SOC 2010 coding system. This will mean changes to some codes and employers having to refresh decisions on which code is most suitable in some cases.

There will also be a change to the concession on supplementary employment which currently allows skilled worker visa holders to carry out 20 hours of supplementary work in addition to their normal hours. This was previously allowed as long as it was in a shortage occupation role or within the same SOC code as their employment. This has now been extended to include any skilled worker holder wanting to carry out work in an eligible skilled worker SOC code.

What will this mean in practice?

For new applications made after 4 ^th April 2024, it will therefore be important to assess eligibility for a skilled worker visa, as well as the SOC codes used for a certain role.

We have set out some examples below;

Technology

Professional and Financial Services

It is clear from this analysis that the rises in the salary thresholds are going to be significant and even in excess of £38,700 in some cases.

What about the Health and Care Sector?

For the Health and Care sector, the news is better. Health and Care worker visa roles will be exempt from an increase in the 'occupation-specific' salary thresholds as these will remain at the 25 ^th percentile but will increase slightly due to the ASHE data being based on 2023 not 2021 salaries (or national payscales).

There will be slight increases in the general salary threshold from £26,200 to £29,000 for Health and Care roles not on a national payscale. Health and Care sector roles on the Immigration Salary List and a national payscale will be subject to a salary threshold of £23,200 along side the going rate for the role. Health and Care sector roles will also benefit from the concessions on salary afforded to new entrants and PHD holders.

However, the sector will need to keep in mind that non-Health and Care roles within a business or Trust will be subject to the higher salary thresholds. There is also a more long term concern that this new system will create a significant disparity in salary thresholds for some workers in the NHS and in independent health. For instance, Laboratory Technicians can be paid as little as £23,200 for their job if they work in the NHS as they can benefit from the Health and Care worker visa. A business in the independent health sector who does not offer services to the NHS so cannot qualify for the Health and Care worker visa so will have to offer them at least £30,960 to employ them. These new changes could therefore see an exodus of staff from the NHS into the private sector in search of better paid jobs.

What about the Shortage Occupation List (SOL)?

The Shortage Occupation List has been around for decades and has functioned as a useful tool to help employers utilise the sponsorship system to fill skill shortages in the UK. However, over the last few years, various changes to the immigration system has watered down the significance of the SOL to the point where the Migration Advisory Committee recommended its overhaul in October 2023.

Part of this was removing the 20% reduction that the SOL enjoyed on the occupational specific threshold to ensure that the SOL did not exert a downwards pressure on earnings levels in the sectors it featured. In December 2023, the Government announced that it intended to implement this measure and replace the SOL with a new look 'Immigration Salary List' or ISL.

The Home Office commissioned the Migration Advisory Committee (MAC) in January 2024 to conduct a 'rapid' review of the SOL and to advise what roles should appear on the ISL. The MAC has recently reported back, recommending reducing the numbers of roles on the ISL to only 21 pending a wider review which will take place later this year.

The new rules have followed the MAC's recommendations that the ISL will only include roles which can benefit from the key feature of the ISL - a 20% reduction in the general salary threshold. This means that if the occupational threshold is above this, they are not on the ISL. For non Healthcare roles on the ISL, the salary threshold will be £30,960 or the occupational specific threshold, whichever is the higher. For Healthcare visa roles, as mentioned above, the limit will be £23,200.

This has left a number of roles off the list which have traditionally been on it, in sectors such as Tech and Health. This means that they will no longer be able to benefit from a lower application fee and a lower threshold for settlement. However, this should make little impact considering the other high costs of sponsorship.

What will happen to the new entrant threshold?

The new entrant threshold has been part of the sponsorship system for some time and is designed to allow those individuals at the junior end of their career a helping hand into the UK job market by offering them a lower salary threshold for a skilled worker visa.

The new entrant threshold applies to the following sets of workers;

• Those under the age of 26 at date of application.
• Those applying for a post-doctoral position in certain science roles.
• Those whose job offer is for a UK regulated profession and the applicant is working towards one of those professions.
• Applicants who are working towards full registration or chartered status with the relevant professional body for the job they are being sponsored for
• Applicants who last had permission at a Tier 1 (Graduate Entrepreneur).
• Applicants who last had permission as a student which expired up to two years before application (where they completed a degree) or are applying up to three months before completing a Bachelor, Masters, PGCE, or after completing at least 12 months of a PhD in the UK.

The Statement of Changes to the Immigration Rules has confirmed that the current salary reduction arrangement for new entrants will continue after 4 ^th April. The general salary threshold for new entrants will be 20% lower than the general salary threshold, a new level of £30,960 and £23,200 for Healthcare roles. A new entrant will also still benefit from a 30% reduction on the going rate. Employers will need to be aware that there will be circumstances where the discounted going rate will be higher than the lowered general salary threshold.

The new rules have also confirmed that the a worker who relies on the new entrant threshold will still only be able to apply for the maximum stay of 4 years which will include time spent in the UK as a Skilled Worker, Graduate or Tier 2 visa holder. If a new entrant wants to therefore extend their visa, they must be paid at the higher salary threshold at this point.

And the reduction in place for holders of PHD?

Workers with a PHD which is relevant to their role or is in a STEM subject will continue to receive a reduction on the salary threshold. This will be as follows;

• For applicants with a PHD relevant to their job they will need to be paid a salary above the general salary threshold of £34,830 and a 10% reduction on the going rate for their role (£26,100 for Healthcare roles).
• For applicants with a PHD in a STEM subject they will need to be paid a salary of £30,960 and a 20% reduction on the going rate for their role (£23,200 for Healthcare roles).

Are any other work based visa routes affected by these changes?

There will be some consequential changes to other work based visa routes;

• Senior or Specialist Workers in the Global Business Mobility routes, the general salary threshold is being updated from £45,800 to £48,500, and going rates are being updated using the latest ONS pay data.
• For Graduate Trainees in the Global Business Mobility routes, the general salary

threshold is being updated from £24,220 to £25,410, and going rates remain based on 70% of the 25th percentile, updated to the latest ONS pay data.

• For the Scale-up route, the general salary threshold is being updated from £34,600 to £36,300, and going rates are being updated using the latest ONS pay data.
• There are changes to the creative worker route to remove the exemption from the resident labour market test so that applicants will need to demonstrate that they are making a unique contribution to creative life in the UK.
• The introduction of an English language requirement to some temporary work route

I am worried my workers will not qualify for a visa after 4 ^th April 2024, is there anything I can do?

There is a window of opportunity to make skilled worker visa applications between now and 4 ^th April 2024, for those individuals who may be working in a business or organisation on another form of time limited visa and will require sponsorship in the future. In particular, individuals on Graduate and Youth Mobility Scheme visas are most likely to be impacted.

It is important that you check whether there are any workers who could be eligible for sponsorship now but won't be in the future to avoid the situation where you are unable to continue their employment due to these changes.

The salary changes are some of the most significant we have seen in decades in the sponsorship space. They are likely to impact many businesses and sectors in the coming months. Employers need to consider long term recruitment plans to see if these can be adapted to fit within the new thresholds or if other visa options are available. With an election looming as well, we are likely to see more changes in the future. Anticipating and putting in place contingency plans will be key to ensuring your business is able to weather the turbulent times ahead.