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Following the Government’s five-point plan announcement in December 2023, which we previously reported on (Government 'five-point plan' announced to cut net migration from Spring 2024), the latest statement of changes to the UK’s immigration rules has landed.
The general theme is that it will be harder for roles to qualify for skilled worker sponsorship. The Government has been candid about the fact these changes are primarily aimed at furthering its manifesto commitment of reducing overall migration to the UK. They are continuing to try and encourage businesses to invest in the UK’s resident workforce rather than over-reliance on immigration.
The key impact here for employers will be financial, with significant increases in the salary requirements for skilled worker visas. The complexity of the immigration rules has also increased with this round of changes, with detailed transitional provisions for those already in the UK on relevant visas.
The changes to skilled worker eligibility are the most significant we have seen since Brexit and the potential impact of these should not be underestimated. In combination, we consider this will significantly affect employers outside of London, small businesses and particular sectors such as IT, engineering, energy and hospitality in particular. Further, the new salary requirements could hit graduate level individuals looking to utilise the scheme in the future to remain in the UK and so an indirect impact on student and graduate visa holders (and the attractiveness of the UK to such individuals) could be seen.
Statistically, the biggest hike in skilled worker visas has been seen on the health and care side. However, the Government appears to be focusing on reducing migration by hitting private sector business hardest and making migrant labour unaffordable. It remains to be seen just how easily employers will be able to fill the roles they need from the resident labour market. Further, regardless of ability to fill roles there will always be strong arguments on the case for immigration bringing valuable diversity of thought, experience and talent to UK businesses.
We would expect the consequent reduction in revenue from visa applications and immigration health surcharge payments to also have an impact on associated budgets.
We have summarised the key changes for employers to note and prepare for.
The headlines
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Change |
Further details |
Impact |
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Increased minimum general salary threshold for skilled workers |
As of 4 April, the general salary threshold will increase from £26,200 p/a to £38,700 p/a. Those already in the route before the changes will benefit from transitional provisions to extend, change employment or settle. They will continue to have a general threshold, but it will increase to a lesser degree to £29,000. |
To be eligible for a skilled worker visa from 4 April, in the absence of tradeable points or transitional provisions, the role must meet the higher of:
Whilst the impact of this on visa eligibility may be obvious, in some cases the changes in minimum going rates for particular roles may be starker and more impactful (see below). |
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Increased standard occupation classification code (SOC) going rates |
Going rates have previously been based on the 25th percentile of earnings across occupations based on official data. As of 4 April, the going rates for roles are being increased to the median level of earnings. Those already in the route will be subject to revised going rates based on the 25th percentile, and so whilst their salary requirements will go up the increase won’t be quite as significant. |
Remember, an individual has to be paid the higher of the general salary threshold or the applicable SOC code going rate. The impact of the increases for some roles will be significant. For example, the previous going rate for SoC code 2136 Programmers and software development professionals was £34,000 and this is increasing to £49,400 per annum (further information is detailed later in the article) These changes could price out a number of roles and sectors from utilising the skilled worker route to source the skills and experience their business wants or needs.
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Tradeable points remain but with an increased starting point |
A significant concern for employers has been the fate of tradeable points, which discount minimum salary requirements in specific circumstances. Under the new rules, tradeable points will remain.
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Employers will be relieved to know that tradeable points remain in place under the new rules. However, as the underlying salary requirements are increasing so in turn will the discounted salary requirements. Under the new rules, tradeable points will adjust minimum salary requirements as follows:
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Increased salary requirements for Health and Care Workers |
They will be exempt from the new median salary requirements, but the general salary threshold based on the 25th percentile will continue to apply, that increasing from £26,200 to £29,000 per annum for those roles not on national pay scales. Health and care roles on the ISL (see below) will be subject to a general salary threshold of £23,200. |
This is better news for those that are in this sector, although employers should take note of the slight increases to the salary thresholds. |
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Revised SOC codes |
The rules see the Home Office moving from SOC 2010 to SOC 2020. Consequently, a number of SOC codes have changed. A table has been published in the rules setting out what the equivalent SOC code was in the 2010 occupation codes to assist employers with extensions. |
Employers will need to be mindful of this when carrying out SOC code mapping for future roles and may wish to undertake a review of commonly used codes so they can familiarise themselves with the correct codes under the new system. Any sponsorships from 4 April (including extensions) must use a 2020 SOC code. Some 2020 SOC codes will no longer be eligible for sponsorship (other than transitional provisions for those already sponsored in those codes). |
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Shortage occupation list to be replaced with the Immigration Salary List |
From 4 April ’24, further to the Migration Advisory Committee’s (MAC) recommendations, the shortage occupation list (SOL) will be replaced with a new and much shorter Immigration Salary List (ISL). The ISL will list roles where the Government thinks it is sensible to offer a discounted general salary threshold, but it will not be a list of all roles experiencing shortages. A more detailed review of the ISL will take place at a later date and we believe that will include stakeholder feedback. Roles on the ISL will benefit from a 20% discount on the general salary threshold - so, £30,960 for new cases from 4 April (£23,200 for healthcare visas) as opposed to £38,700. However, those roles will not benefit from a 20% discount on the SOC code going rate for that role – the full going rate must be met. We note that the statement of changes is still showing discounted rates for ISL roles, and we believe this is a drafting error which will be corrected. It remains to be seen if the visa application fee will continue to be discounted for ISL roles, as it has been for SOL roles. |
This will impact a number of individuals who may not qualify for a reduced salary on the basis of other tradeable points (e.g. as a new entrant). Employers who have benefited from the SOL to date may find the costs of recruitment increasing. With the ISL shrinking to 23 roles, 3 of which only apply in Scotland, (from the SOL’s 54) certain sectors will be impacted by this. For example, some key roles which don’t feature on the new ISL include:
Employers looking to recruit into these roles will have to meet the full going rates, unless other tradeable points apply. For example, the new going rates for some of these roles are:
A further indirect impact of the new ISL will be felt by asylum applicants. Those with a pending claim for more than one year can request permission to work. If granted, however, they are only permitted to work in role on the SOL list. Going forward, their will be limited to the much shorter ISL, in turn further restricting their ability to work and contribute to the economy. This goes against the MAC’s recommendation that they should be permitted to work in any job. |
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Broader supplementary work permitted for skilled workers |
From 4 April ’24, the work a sponsored migrant is permitted to carry out outside of sponsored work (known as supplementary employment) will be wider. Currently, that work must be in a SOL role or in the same profession and at the same level as the individual is sponsored in. From 4 April that work will be able to include all occupations eligible for the Skilled Worker Route. Crucially the supplementary employment must still be: in addition to the role the individual is sponsored to carry out; outside of contracted hours; and for no more than 20 hours a week |
This unexpected relaxation will give more flexibility for sponsored skilled workers to engage in activities outside of the work they carry out for their sponsor. Supplementary employment can be undertaken by other sponsored workers, including GBM senior or specialist workers. However, the expansion noted here only applies to skilled workers. Others remain limited to work on the ISL (which is much shorter than the SOL) or work in the same profession and at the same level in which they are sponsored. This serves as a restriction from their current rights to undertake supplementary employment. Employers should take note of additional guidance recently issued by the Home Office on the right to work checks required where you are providing supplementary employment to a sponsored worker - Right to work checks: an employer's guide - GOV.UK (www.gov.uk)
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New salary requirements for other routes |
GBM senior or specialist worker:
GBM graduate trainees:
Scale-up route:
Transitional arrangements will apply for those previously sponsored on the route and in it continuously prior to 4 April. |
With the skilled worker having become the primary route utilised by employers since Brexit, the impact of these less dramatic increases will be less severe. |
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Increased earning requirements for the family route |
From 11 April, applications under Appendix FM will now need to meet the £29,000 minimum income requirement (up from £18,600). However, there will no longer be an additional income requirement for children. As previously reported, subsequent increases to £34,000 later in 2024 and £38,700 by early 2025 have not yet been finalised. |
This increase will impact those looking to bring their family members to the UK. There will be transitional provisions for those already in the route. |
Skilled worker salary requirements in more detail: Transitional v new cases
The increase general threshold of £38,700 will not apply to them. They will have to meet the higher of the following:
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£29,000 per annum; or
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The SOC code going rate (in this case based on the 25th percentile, so increased but not by as much).
For example, someone on a skilled worker visa who is sponsored to work as a software engineer under current rules would be in SOC code 2136. This role has a SOC code going rate of £34,000 per annum. However, it is also on the SOL and so has a reduced going rate of £27,200 (based on a 37.5-hour week).
If that individual has to extend their visa on/after 4 April, they will need to be sponsored in the new SOC code 2134 Programmers and software development professionals. The full going rate applicable for that extension will be £36,300 per annum (assuming no tradeable points apply). However, as the role was on the SOL (and assuming the individual remains in the same role with the same sponsor), the discounted going rate would be £29,040 p/a as they would benefit from transitional provisions. Other potential tradeable points they might seek to use could include:
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Relevant PhD:
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General threshold: £26,100
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90% of going rate (in the case of SOC 2134: £32,670)
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Relevant PhD in STEM subject:
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General threshold: £23,200
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80% of going rate (in the case of SOC 2134: £29,040)
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New entrant
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General threshold: £23,200
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70% of going rate (in the case of SOC 2134: £25,410)
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The biggest hikes will hit those entering the skilled worker route for the first time from 4 April. They will need to meet the higher of the following:
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£38,700 per annum; or
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The SOC code going rate (in this case based on the median).
Taking the above example, if sponsoring a software engineer for the first time they would be sponsored in new SOC code 2134 Programmers and software development professionals. The full going rate applicable for this will be £49,400 per annum (based on a 37.5-hour week and assuming no tradeable points apply). This role is not on the ISL. Tradeable points may be available if the individual holds a relevant PhD or can be classed as a new entrant, which would attract a discounted general threshold and going rate as follows:
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Relevant PhD:
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General threshold: £34,830
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90% of going rate (in the case of SOC 2134: £44,460)
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Relevant PhD in STEM subject:
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General threshold: £30,960
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80% of going rate (in the case of SOC 2134: £39,520)
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New entrant
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General threshold: £30,960
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70% of going rate (in the case of SOC 2134: £34,580)
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Even with the benefit of tradeable points, these are quite significant salary increases.
The changes apply from 4 April. If an individual is sponsored before 4 April, even if their visa application is submitted after that date, their application will be considered under the current rules. Going forward, provided they have since retained continuous permission in the skilled worker route, any subsequent applications will be considered under the transitional provisions if those applications are submitted before 4 April 2030.
Anyone whose CoS is assigned on or after 4 April will have their application considered under the new rules.
Practical tips for employers
The changes apply from 4 April. If an individual is sponsored before 4 April, their visa application will be considered under the current rules (i.e. pre-salary increases) – but please note our comments below on new CoS deadlines.
Whilst our advice would typically be to accelerate any impacted applications where possible ahead of these changes on 4 April this will not be possible for all. Since the Government announced its five-point plan there has been a surge in applications, including CoS allocation requests and defined CoS applications to facilitate sponsorship. Priority processing for CoS allocations has become impractical, with daily priority slots being filled by 9am each day. Defined CoS applications are taking an unprecedented period of time to be processed. Consequently, some employers will be prevented from beating these changes due to processing delays. Where possible though, we would advise employers try to get in ahead of these changes if the rule changes will render roles ineligible come 4 April. In particular, it may be worth reviewing individuals currently employed on graduate and youth mobility scheme visas and considering their eligibility for sponsorship longer-term under the new rules if the business wishes to retain them. To that end, it is vital employers are aware of the SMS unavailability and new CoS deadlines noted below.
Updated UKVI guidance issued on 19 March 2024 confirms that the SMS will be unavailable between 9pm on 2 April and 9am on 4 April. During that time sponsors will not be able to:
• Apply for a licence, apply to add routes to a licence or renew a licence;
• Apply for any skilled worker defined CoS;
• Ask to increase or renew and allocation of undefined CoS;
• Assign CoS.
In short, from a practical perspective all CoS must be assigned by 7pm on 2 April 2024 to fall for consideration under the current rules. Given potential closures for Easter public holidays, employers should plan ahead accordingly.
For defined CoS applications (for out of country skilled worker applicants), it should be noted that further to UKVI updated guidance issued on 19 March 2024, we understand that UKVI will cancel any outstanding defined CoS applications outstanding as at 7pm on 2 April 2024. If an application is cancelled the sponsor will have to submit a new application after 9am on 4 April 2024, based on the new SOC codes and salary requirements.
Similarly, any defined CoS granted before 7pm on 2 April 2024 must be assigned before 7pm on 2 April 2024. If this is not done, the CoS will be cancelled and the sponsor will have to reapply after 9am on 4 April 2024 based on the new SOC codes and salary requirements.
When it comes to undefined CoS (for in-country applicants), the updated guidance confirms that if employers wish to sponsor a worker against a 2010 SOC code under the existing rules, that CoS must be assigned to the worker before 7pm on 2 April 2024.
We understand these requirements are due to the fact the sponsorship management system will be unavailable from 7pm on 2 April until 9am on 4 April 2024, presumably so it can be updated to reflect the changes.
Any CoS assigned to workers before 7pm on 2 April will not be cancelled. They will remain valid for use in a visa application for 3 months. Care should be taken with intended start dates, to ensure the individual is able to submit a successful visa application.
Employers should be particularly careful from 4 April to ensure they are sponsoring individuals in the correct SOC codes (whether they are new hires or existing staff extending their visa). Getting this wrong could result in an application being refused.
Transitional provisions for those already in the skilled worker and other routes will generally end for applications made on/after 4 April 2030. As such, an employee’s immigration journey (including eligibility for indefinite leave to remain) should be managed carefully to continue to benefit from transitional provisions. Applications to extend, change employment or settle should be submitted before that date.
The reality is there will be instances from 4 April where a role simply will not meet the revised salary requirements. Those requirements, and tradeable points, should be carefully analysed to work out the minimum amount required for particular individuals and roles. Where possible, this should be identified at an early stage so appropriate conversations can be had with any individuals working for you in those roles on a graduate or student visa who are hoping to remain with the business on the basis of skilled worker sponsorship.
Is the graduate visa at risk?
Unfortunately, the graduate visa route may not escape unscathed. This route permits overseas graduates of UK universities to get a 2-year unsponsored visa permitting them to work in any role in the UK (3 years for PhD students). On 11 March the MAC were commissioned to do a rapid review of the route and report back by 14 May 2024. This review is amid Government concerns that the route is being exploited. Specific concerns include:
- The visa may be creating additional demand for degrees, particularly short-term courses such as masters;
- The demand for student visas may be driven by the desire for longer-term immigration options in the UK, as opposed to education;
- The visa may be facilitating individuals coming to the UK for a short course and then being able to enter the skilled worker market on a new entrant rate for 4 years – thereby potentially undercutting other skilled workers;
- Large numbers switching from graduate visas to skilled workers visas are not going into graduate level roles – indeed the majority are going into care work.
Unfortunately, the MAC has been given insufficient time to collate stakeholder input. A number of our clients employ staff on graduate visas, often to enable those individuals to acquire the skills and experience needed for more senior / higher paid roles. This will be one to watch, as changes to the route could impact future recruitment.
Our business immigration team is on hand to help our clients understand and navigate these changes as they apply to their current and future workforce and recruitment plans.
Date published
19 March 2024
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