Rewriting the rulebook: the earned settlement model and what it means for employers

There are a variety of potential criteria to reduce this period, including:

• Integration: those that can demonstrate English language to a higher standard would get a one year reduction;
• Contribution: a high taxable income could see reductions. For example, under the proposals those with taxable incomes of £50,270 would be eligible after five years, and those with income of £125,140 after three years. Similarly, those in specific public service roles for at least five years or who have volunteered in the community may see reductions of 3 – 5 years.

The Government is seeking views on the proposal that those who earn high salaries will receive a reduction in the baseline period as they will be making larger economic contributions. These higher salary bands will be more likely to bite for more senior staff, or those who are based in London and benefit from London weighting.

The consultation will also consider whether those who work in public service roles, for example those where earnings are based on national pay scales, should also benefit from a reduction in the qualifying period. That is because those roles are likely to be unable to meet the higher salary thresholds. The intention is however, that the reduction will only be available for those working in roles above RQF level 6.

For Graduate switchers, who often rely on new entrant tradeable points for the initial two years of sponsorship, moving from a salary of under £41,700 to £50,270 is likely to take a significant amount of time, if at all. Therefore, it is likely those who are at the start of their career will face longer periods to settlement.

One key factor that is being consulted on, which will impact a large number of those in the UK on Skilled Worker visas, is whether those working in the UK in roles which fall below RQF level 6 should have a baseline qualifying period of 15 years as opposed to 10.

The contribution-based approach could also negatively impact those who take career breaks, for example maternity leave, as many women or primary care givers may not meet the higher contribution rate required.

‍

The ways in which the qualifying period can increase are entirely based on being in receipt of public funds, means of entry and periods of overstaying. These are aimed to impact those who do not comply with the conditions of their visa and asylum seekers as opposed to those who will be sponsored in work routes.

Typically, those on the Skilled Worker route will not be in receipt of public funds as a condition of their visa, is that they have no recourse to public funds.

‍

The White Paper, which initially raised the idea of extending the qualifying period for settlement, stated that the intention was to apply this retrospectively, meaning it would apply to those already in the UK who have not yet secured indefinite leave to remain. That would include, for example, sponsored workers already working in the UK but who have not yet reached eligibility for settlement.

The consultation is looking for views on this and whether there should be transitional provisions for those who are already on a visa route working towards settlement. This is a significant issue as there are vast numbers of Skilled Workers in the UK who were, at the time their visa applications were submitted, under the impression that they would qualify for indefinite leave to remain after five years.

For employers, these transitional provisions will be of huge significance. If the Government decides not to offer transitional provisions and imposes the new 10-year baseline qualifying period on all sponsored workers, the employer will have to continue sponsoring staff for potentially double the length of time they currently have to. This means that there will be double the fees for sponsorship, higher visa costs for the employee and much more uncertainty around the sponsored work force, especially if we continue to see increased skill and salary requirements as we have in recent years.

The fees for sponsorship, visa applications and the immigration health surcharge have all increased over the last couple of years as the Government have attempted to curb the increase in migration to the UK. We are also expecting the immigration skills charge to increase by 32% on or after 16 December 2025. If sponsored workers are unable to settle for at least 10 years, or 15 years if in a lower skilled role, this has the potential to double or triple the fees for both employers and employees. Employers may wish to consider whether clawback agreements are agreeable for their situation given the rising costs. Further, it is worth noting that subject to transitional provisions being introduced, this will add to the costs and timescales involved for existing sponsored staff who have not yet become eligible for settlement.

If the sponsorship required for indefinite leave is doubled, then so will the length of time a sponsor will need to ensure they are on top of their sponsor duties for each worker. Employers should have robust mechanisms in place already, especially given the huge surge in compliance enforcement by the Home Office. However, if workers are potentially going to be sponsored for up to 15 years, those duties will persist for far longer and be more extensive. If sponsoring a worker for that period of time, they are likely to have taken time off work, or have role changes for example, all of which will need to be considered for a much longer time and all relevant reports made on the SMS. The increased length of sponsorship will make compliance more complex. Employer should ensure they have the systems in place to monitor all of the relevant information for the duration of sponsorship.

This is a key factor which will impact businesses across the UK as the country could become less favourable for migrant workers. For lower skilled roles that fall below RQF level 6, those staff will face long waiting times to qualify for settlement and increased salary rates. Employers should consider the pathways for these workers in terms of career progression, which may in turn deem them eligible for settlement sooner and take the burden of sponsorship away from the employer.

We may also see some roles become increasingly difficult to fill as eligible candidates may look to consider alternative countries where they are able to settle more quicky, cost effectively and with a more stable and foreseeable pathway. This could negatively impact sectors already struggling to recruit, so employers will need to consider how they can become more attractive to candidates possibly by offering increased salaries or evidencing career progression.