UK to raise minimum salary for foreign skilled workers

The UK’s Home Secretary has just announced a series of tough new visa measures, aiming to reduce the number of people moving to the UK by around 300,000 each year. The five-point plan is the government’s response to its view that net migration to the UK of around 672,000 for the year to June 2023 is too high.

The changes will go live in Spring 2024 and add to the recent increases to visa fees and the Immigration Health Surcharge, which taken together will make it more challenging for workers and families to move to the UK:

• Skilled Worker visa minimum salary increase: The salary threshold for an application will rise by nearly 50% from £26,200 to £38,700. Health and care workers, and professions like teachers with national pay scales, will be exempt and will still qualify for the visa with a lower salary. This hike in minimum pay – to more than twice the minimum wage and to a higher level than the median UK salary – will have a big impact on all employers and will exacerbate existing staff shortages in some sectors. Taking the hospitality sector as an example, the trade body UKHospitality estimates that 95% of sponsored visas for chef and managers granted last year would not qualify under these new rules. Looking at the current list of qualifying Skilled Worker occupations, only around 15 out of approximately 250 different categories of job have a going rate salary above £38,700, which gives a sense of what a significant change this will be.
• Shortage Occupation List (SOL): The 20% discount applied to the minimum salary for visa applicants applying for shortage occupation roles will be scrapped. The SOL will be replaced with a new Immigration Salary List, which will retain a general salary threshold discount. The types of jobs on the list will also be reviewed and reduced by the Migration Advisory Committee, so employers in sectors like technology, and engineering should expect roles to disappear from the list. Construction roles – like bricklayers, carpenters, and roofers - were only added to the SOL earlier this year, so we'll need to wait for more detail to see how that sector is impacted.
• Family visas: The minimum salary threshold for a family visa will also be raised from £18,600 to £38,700 to "ensure [British and settled] people only bring dependants whom they can support financially". That will have a huge impact on couples wanting to move to the UK as it will block many of them from qualifying. Love conquers all, except for the UK's visa rules.
• Student visas: The government will ask the Migration Advisory Committee to review the Graduate visa route – a post-study work visa - "to ensure it works in the best interests of the UK and to ensure steps are being taken to prevent abuse".
• Health and care visas: Overseas care workers will not be able to bring any family members with them on dependant visas. Care firms that want to sponsor visas will also need to be regulated by the Care Quality Commission.

The detail of the new rules will be set out in a Statement of Changes that will be published in due course. There are many unresolved issues to be addressed, like transition arrangements for those already in the UK before the rules change, and whether there will continue to be concessions for new entrants to the labour market. These changes are more radical than expected and will have a serious impact for employers and their ongoing recruitment challenges.

In the short term, employer that are considering sponsorship for UK roles or vacancies at salaries below £38,700 should try to accelerate recruitment and sponsored visa applications before next Spring to take advantage of current thresholds. We also recommend that employers review the visa status of any UK based colleagues that are not currently on a sponsored visa, but that will need sponsorship in the future (because their current visa can't be extended). For example, that will apply to those working on Student, Graduate, Youth Mobility, High Potential Individual or even capped intra-company transfer visas. As part of longer-term staff retention planning, employers should consider switching them into Skilled Worker by the Spring, sooner than originally planned, even if they still have months left on their current visas.

Do contact us if you'd like to chat through the impact of these changes.