The rise in UK immigration is largely fuelled by skills gaps, with the biggest increase by far in healthcare visas.
However private sector employers bear the brunt of higher costs to sponsor from April 2024.
Salary hikes for sponsoring skilled workers
On 4 April, the government hiked up minimum salaries for new hires on the skilled worker route – the most popular post-Brexit work visa.
For new applications, the general minimum salary threshold increased from £26,200 to £38,700 gross per annum, the hourly rate from £10.75 to £15.88 and the government-set ‘going rate’ for occupations increased from the 25th percentile of those jobs, according to the Annual Survey of Hours and Earnings, to the 50th percentile (median).
Sponsors must pay the higher of these three figures. Hiring someone on a skilled worker visa now means paying more than half of what all workers in that profession earn.
Read more: HRDs to be paid £49,400 minimum, under new immigration rules
The shortage occupation list to help employers facing dire skills shortages was also scrapped on 4 April, along with the 20% discount on going rates of pay it affords those sponsoring skilled workers on the list.
It was rebranded the immigration salary list (ISL), and the number of jobs included was slashed. Though there is no discount on the going rate of pay, the minimum general salary threshold for the visa is discounted from £38,700 to £30,960. This means that there are only a handful of shortage occupations with going rates under the £38,700 threshold benefitting from the list.
These changes significantly increase the cost of sponsoring staff, and come on top of recent hikes in visa fees and the immigration health surcharge, which rose from £624 per year to £1,035 on 6 February.
Sponsors paying London wages are much less affected than smaller employers, startups and businesses in regions where pay tends to be under the UK median. Sponsoring the categories below also mitigates the above changes.
Who can be employed on lower salary thresholds?
People who are already on the skilled worker route are exempt from the £38,700 salary threshold when extending their visa, changing sponsoring employer or applying for settlement. Their pay should progress on the higher of the updated 25th percentile of going rates (not the median), a salary threshold of just £29,000 or £11.90 per hour.
The minimum general salary threshold to sponsor employees classed as a new entrant is just £30,960, with a 30% discount on the going rate for the relevant job. (Note that an applicant can only be sponsored as a new entrant for up to four years).
Read more: Employment law updates for 2024
The minimum salary threshold for eligible skilled workers with a relevant PhD is reduced to £34,830 (£30,960 with a STEM PhD). Eligible skilled workers are also eligible for a 10% discount on the going rate for their specific role (20% for a STEM PhD).
The government has also exempted itself from the inflationary increases it has landed other employers with. Employees on national pay scales, such as teachers or medical practitioners may be sponsored on the highest of a minimum salary threshold of £23,200, or the national pay scale for that role or salary band.
New health and care workers who are not on a pay scale have a general threshold of £29,000 and their occupation-based going rate increases along the 25th percentile. With a relevant PhD the threshold is £26,100, and for people with a relevant STEM PhD, on the ISL or new entrants route, the general threshold increase is £23,200.
Vanessa Ganguin is managing partner at Vanessa Ganguin Immigration Law
