Recommended Salary Rules Published for Skilled Worker Visas

On 4 December 2023 the Home Secretary announced a shake up to the Immigration Rules which will have a fundamental impact on the way in which UK employers use the Skilled Worker visa to recruit non-UK nationals into skilled roles.

The key change announced was a staggering increase in the minimum salary from £26,600pa to £38,700pa.  For many businesses, the key concern was that this change would prevent them using this route without significantly increasing the salaries on offer to their UK and international colleagues, which for some, is simply not achievable.

At the end of last year, it was also announced that the Shortage Occupation List (SOL) was to be abolished and replaced by the Immigration Salary List (ISL) and the Migration Advisory Committee (MAC) was instructed to conduct a ‘rapid review’ of the ISL. Given the timescales, the MAC did not invite any stakeholder engagement prior to publishing its report.

The ISL

This rapid review was published on 23 February 2024.  On first glance, the MAC’s publication is complex.  It sets out 9 tables with different roles and salaries . If the MAC’s recommendations are accepted it is clear that it will be more complicated for employers to correctly calculate the minimum salary payable going forwards.

The SOL currently includes 51 occupations and the ISL has dramatically reduced this to just 21 occupations, representing 8% of the roles eligible for sponsorship under the Skilled Worker visa.

The proposed ISL continues to include a variety of construction roles including bricklayers, roofers. carpenters and joiners, as well as some welding roles.  The life sciences sector will also continue to benefit from roles such as pharmaceutical technicians, lab technicians and biological scientists and biochemists being included on the ISL.  Care workers and senior care workers remain on the list, but nurses don’t.  Notably the tech sector roles previously included on the SOL have been removed entirely from the ISL.

New Minimum Salaries

The Current Position

Unless an exemption applies, when calculating the minimum salary payable for a Skilled Worker, the employer must pay the higher of:

1. The general salary threshold of £26,200pa or for roles on the SOL, £20,960pa
2. The applicable hourly rate of £10.75
3. The ‘going rate’ for the role, which is currently set at the 25^th percentile of the nominal wage data associated with the role according to the Annual Survey of Hours and Earnings (ASHE) data.

Moving Forwards

Presuming that all of the MAC’s recommendations are implemented, from 4 April 2024, employers will generally need to pay the higher of:

1. The general salary threshold, which will increase to £38,700pa;
2. The applicable hourly rate, which has not yet been confirmed but will increase with National Minimum Wage which is rising to £11.44ph from 1 April 2024; and
3. The ‘going rate’ which will be known as the ‘occupation-specific threshold’ and which will be set at the median/50^th percentile of the ASHE data, rather than the 25^th.

The MAC review has confirmed that there will also be exemptions that apply where a lower minimum salary can be paid.  These are:

• Where the role is on the ISL; and
• Where the individual being sponsored is a ‘new entrant’.

The “new entrant” discount

The new entrant discount applies most commonly to individuals moving from a Student visa or Graduate visa to a Skilled Worker visa, or if the individual is aged 26 or under at the time of making their visa application.  This will continue (for now) and will be very attractive to employers who are not able to benefit from the ISL and are unable to meet the £38,700pa salary.

The ISL

The MAC has recommended that for roles included on the new ISL, the minimum salary that employers will need to pay will be reduced to £30,960pa or their occupation-specific threshold, whichever is higher.

For example:

• A software developer currently benefits from a reduced salary due to being included on the SOL. The minimum salary currently payable is £27,200pa but moving forwards, the minimum salary will not be less than £38,700pa from 4 April, because the MAC review has not recommended keeping this role on the ISL;
• A biochemist is also currently included on the SOL resulting in a minimum salary of £24,480pa. The MAC has recommended that this role be included  on the ISL however, they have recommended that the minimum salary should not be less than £37,100pa from 4 April. This is a significant increase.

Next Steps

The MAC report is a recommendation to the Government and so is subject to change.  However it is anticipated that all recommendations detailed above will be accepted and incorporated into the Immigration Rules which will come into effect on 4 April 2024.

It is also expected that the MAC will be commissioned to undertake a full review (rather than a rapid review) of the ISL later this year and if this is the case, employers and other interested stakeholders will be given the opportunity to feed into the consultation.  Look out for further updates from us later in the year as we will collate responses on behalf of our clients and contacts.

Impact on Employers

The good news is that the £38,700pa salary can, in certain circumstances, be reduced which will present options to employers who feared that they would be prevented from continuing to use the Skilled Worker visa, particularly in relation to graduate recruitment.

The bad news is that the change in salary requirements is more complicated than ever, making it harder to secure a Certificate of Sponsorship and visa quickly without request for further information and questions from UK Visas & Immigration. Given the additional complexities, it is more important than ever that employers take advice on these issues.

To discuss how we can help your business navigate these changes, please contact Flora Mewies or another member of our Immigration Team.