Changes to Immigration Policy to Reduce Net Migration
31st January, 2024
Laura Darnley and Flora Mewies recently co-hosted a webinar in which they discussed the changes to immigration policy coming into force later this year and how this might affect businesses.
There were number of key questioned asked at the session and we have compiled the answer to these below.
Why is the Government making changes to the Skilled Worker immigration route?
Net migration for the year ending June 2023 was 672,000. In the year ending September 2023, the number of Skilled Worker visa applications stood at around 66,000, with some 51,000 dependants. On 4 December 2023, the Home Secretary announced a “5 Point Plan” to “slash migration” and “curb abuse” of the immigration system. Together, these measures are expected to cut net migration by about 300,000.
What changes are being made to the Skilled Worker visa?
From April 2024, the minimum general salary threshold for eligibility under the Skilled Worker route will increase from £26,200 per annum to £38,700 per annum.
The Government has confirmed that occupation-related pay rates or “going rates” will also increase from being based on the 25th percentile of the salary band for each occupation to the 50th percentile figure.
How does this impact sponsored workers in Shortage Occupations?
The Shortage Occupation List is a list of occupations deemed to be in short supply in the UK labour market. Currently applicants in these occupations benefit from a reduced base salary threshold and reduced occupation-related pay levels for sponsorship along with reduced visa application fees.
The Government intends to abolish the Shortage Occupation List and replace it with the Immigration Salary List. The Migration Advisory Committee (MAC) will review the occupations that should be on the list, producing their initial report by April 2024.
Current Shortage Occupation List occupations benefit from a 20% reduction on the occupation-based salary rates. The Government will end this with effect from April 2024. We anticipate that some form of salary discount will continue to apply (but not at this level).
What about changes for other Skilled Workers who benefit from salary discounts?
PhD holders, STEM PhD holders, or ‘new entrants’ (typically those under the age of 26 or changing to a Skilled Worker visa from a graduate/student visa) are currently able to benefit from a reduced base salary threshold and reduced occupation-related pay levels for sponsorship. It is unclear how the minimum salary threshold will be adjusted (if at all) for those in these categories.
Will the new salary requirements apply to Skilled Workers applying for Health and Care Visas?
No, those on Health and Care visas will not be required to meet the new minimum salary of £38,700 per annum. However, it is not clear whether they will have to meet an increased base salary or whether occupation specific salary rates (outside of the National Pay Scales) will increase.
What does this mean for individuals who are already sponsored?
The policy changes will not be applied retrospectively. Individuals who are already “in the route” before these changes come into effect are exempt from the new threshold salary levels when they change sponsor, extend or settle.
However, it is not clear exactly how “in the route” will be interpreted. For example does this mean individuals will be exempt from the increases where they have been assigned a Certificate of Sponsorship, or where they have received their visa?
The Government statement confirms that it is expected that Skilled Worker’s pay will continue to progress at the same rate as resident workers. As such, they will be subject to any increases to the 25th percentile the occupation-based salary rate.
It is unclear what transitional arrangements will be put in place, if any, for those existing sponsored workers who have previously benefitted from salary discounts.
What will be the impact of these changes on business?
It is expected that these measures will reduce the number of Skilled Worker applications by some 13%.
These changes will have a greater impact on some industries/sectors than others. Those where the increased salary levels are likely to take them above what the market can sustain will be most affected, for example hospitality, retail, leisure and construction. The impact in other sectors where salaries tend to be above these levels may not be so keenly felt.
In addition, the increases will have a disproportionate impact on employers looking to sponsor Skilled Workers outside of London and the South East, where salary levels are generally higher. It is anticipated that employers in the North of England and Scotland will be hardest hit by these new requirements.
When do these changes take effect?
The Government statement indicates these changes will take effect from April 2024 but we do not have an exact date.
What are the rules for sponsoring employees now?
None of the above changes have yet been implemented.
The current base salary for sponsorship of Skilled Workers remains at £26,200 p.a.
The current base salary for Health and Care Workers remains at £20,960 p.a. (or in some cases £26,200 p.a.).
Why is the Government making changes to the rules for sponsored care workers and senior care workers?
The most recent annual figures indicate that some 144,000 care workers/senior care workers were sponsored, along with some 180,000 dependant applications. The Government wants to drastically reduce these numbers.
What changes are being made to the rules for sponsored care workers and senior care workers?
New sponsored care workers using SOC Code 6145 (care workers) and 6146 (senior care workers) will not be permitted to be accompanied by their dependants. This will apply both on entry clearance (when they apply to come to the UK) or switching visa categories in the UK. This also applies even if their dependants are already in the UK under another route.
What about existing sponsored care workers and senior care workers?
The rules will not be applied retrospectively. The restrictions on dependants will not impact individuals who are already “in the route” before these changes come into effect. This will continue to apply when they extend, change sponsor or apply for settlement. It will also include the ability to bring in new dependants.
However, it is not clear exactly how “in the route” will be interpreted. For example does this mean individuals will be exempt from the increases where they have been assigned a Certificate of Sponsorship, or where they have received their visa?
What other restrictions is the Government implementing on care sector sponsors?
The Government has announced that going forwards, all employers who want to sponsor new care workers/senior care workers, will be required to register with the Care Quality Commission.
When do these changes take effect?
The Government statement indicates these changes will take effect “as soon as possible a the beginning of 2024”.
What are the rules for sponsoring care workers now?
None of the above changes have yet come into effect, although we expect them to be implemented imminently. For the time being at least sponsored care workers can continue to bring dependants with them to the UK.
What changes are being made to Family Visas and who will it apply to?
The minimum income that must be demonstrated to be eligible to bring a dependant partner to the UK is currently £18,600 per annum, with an additional income required for children.
Going forwards, the minimum income required will be increased in staged increments up to £38,700 p.a. (to match the Skilled Worker base salary threshold):
- Spring 2024: £29,000 per annum
- Unknown date: £34,500 per annum
- Unknown date: £38,700 per annum
There will be no additional income requirement for children.
When do these changes take effect?
These changes will apply to all new applicants after the new rules come into force in April 2024. However, the old rules will still apply in instances where an individual is already in in partner route.
What changes will be made to Graduate Visas?
The Graduate visa route allows international students to apply for a 2/3 year visa to remain in the UK after completing their studies at degree level or above. This is a popular route with over 100,000 applications last year.
The MAC has been asked to conduct a review of this route early this year, but no specific changes have been announced as yet.
What other changes do employers need to be alert to?
Organisations need to be aware of the significant additional changes that are also taking effect over the next couple of months:
- Student visa holders are no longer permitted to bring dependants – in force 1 January 2024
- Illegal Working penalty fine increases – Fines are tripling to £60,000 per illegal worker – 13 February 2024)
- Increase to Immigration Health Surcharge – from £624 per person per year of the visa to £1035 per person per year of the visa – 6 February 2024
What should businesses do to prepare for the changes?
- Review your recruitment strategy and consider bringing forward recruitment plans for new hires before the rules change, so that you can take advantage of the current rules in place (including e.g. the current lower salary threshold).
- Review your existing workforce and consider bringing forward sponsorship of existing staff who are likely to require sponsorship in the short/medium term, including those currently on graduate visas, student visas and dependant visas, so that their applications are not subject to the new rules.
- Review your recruitment strategy along with any current vacancies to determine the impact these changes will have.
- Review the impact on any internships/graduate programmes.
- Review what impact the increase in minimum salary levels will have on your business and your ability to recruit international talent and fill key vacancies.
- Review any regional impact of these changes on your business and how this might impact on your ability to recruit.
- Consider whether there is scope to increase salary levels within the business to mitigate the impact of these changes. Take advice on any potential discrimination risks.
- Communicate with employees to provide reassurance and information (where appropriate).
- Review and update policies and procedures to ensure compliance.
- Refresh compliance training for managers.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
This page may contain links that direct you to third party websites. We have no control over and are not responsible for the content, use by you or availability of those third party websites, for any products or services you buy through those sites or for the treatment of any personal information you provide to the third party.
