New migrant salary thresholds: necessary hardline or financial own goal for UK government?

Newly-proposed government changes to work immigration rules will cause significant difficulties for recruiters and employers, immigration lawyers have warned.

Last week, the UK Home Secretary announced a five-point plan to restrict work migration to the UK. The changes, effective spring 2024, aim to deliver the biggest ever cut in net migration and curb abuse of the immigration system. The five-point plan includes:

Increasing the minimum general salary for occupations under the Skilled Worker route from £26.2k to £38.7k (a 47.7% increase)
Health and social care visa workers will be exempt from this increase. As a result, some sectors such as hospitality, which rely on the lower minimum salary, may have to cut positions to be able to meet the higher salary levels, whereas other sectors, which generally pay higher salaries, are expected to be less affected.

Prohibiting care workers from bringing dependents to the UK
Despite recommendations by the Migration Advisory Committee (MAC) and the UK Government’s recognition of an acute shortage in the adult social care sector, these changes will create another hurdle for the health and social care sector as some foreign nationals may now choose a different destination country where they can bring their dependents.

Removing the 20% discount of the going rate salary level for occupations on the Shortage Occupation List
The Shortage Occupation List will be replaced with a condensed ‘Immigration Salary List’, which will retain a general threshold discount.

Increased financial requirement for family applications (ie. partners of people who are British or settled in the UK)
The British or settled person will be required to earn a minimum of £38.7k, up from £18.6k (an increase of over 100%).
 
Review of graduate route 
The graduate route currently allows an individual to remain in the UK for at least two years after successfully completing a course in the UK and has been a great stepping stone for both recent graduates and employers who are looking for work/a pool of UK educated talent. However, the MAC has indicated that it will review the route to ensure it is working correctly for the UK.

These measures are introduced to intentionally reduce net migration levels, by making it more expensive for both employers and foreign nationals to immigrate to the UK. Additionally, the plan aims to increase the domestic workforce through its ‘Back to Work Plan’, which focuses on helping UK nationals get off benefits and move into the workforce.

The proposed changes will cause significant difficulties for recruiters and employers who are still adjusting to labour shortages post-Brexit and whose sectors have not yet reached the point of benefiting from alternative strategies to migration, such as increased training. It is also possible that the changes could potentially undermine labour sector growth and reduce business and migration contribution to UK GDP.

Businesses should assess their 2024 workforce planning with these changes in mind to ensure they know ahead of time what roles and salary levels they are likely to need and the impact the new policies will have on those needs. 

Here are the five key steps companies and their recruitment advisers should take now: 

  • review the roles and salary bands that could be impacted
  • seek headcount approval now to bring forward moves that require sponsorship ahead of the changes
  • consider alternative non-sponsored visa routes moving forward where possible eg. Youth Mobility Scheme, Ancestry visas etc. 
  • review options to recruit for the impacted roles from the UK settled workforce
  • communicate the impact and proposed workforce plans to key stakeholders, including the board, current sponsored population, recruiters, graduate recruitment, talent and reward teams.

While this announcement does appear to be a politically driven reaction to the high net migration figures and a long-held desire by the UK government to significantly lower the numbers entering the UK, there is a real risk here that these changes along with the recent announcement to the significant increase to government application fees (making the UK one of the most expensive places to sponsor a visa) will do serious long-term harm to the attractiveness of the UK for both businesses and the ‘brightest and best’ individuals.

Sharon Muir is senior manager and Alice Spaull is manager at immigration legal firm Fragomen.

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