How will UK measures to reduce immigration affect employers in 2024?

Updated 26 February 2024

Most people don’t yet appreciate the full implications for UK businesses and workers of policies the government has implemented this year to reduce UK immigration.

These measures have been implemented by a government keen to be seen to reverse a recent spike in net migration figures. The rise – which appears to have peaked now – is partly fuelled by skills gaps – with the biggest increase in work visas in the healthcare sector. In the year ending September 2023 Health and Care Worker visas increased by 135 percent to 143,990 issued (plus 173,896 dependants). All other Skilled Worker visas increased nine percent with 66,322 issued (plus 50,874 for dependent family members).

Yet it is the increasing number of UK companies using Skilled Worker sponsor licences post-Brexit to employ the workers they need that will bear the brunt of this year’s changes. As will an increasing proportion of British and resident workers who will no longer be able to afford to bring partners to live with them in the UK.

You can find details below of the main changes in store this year. Anyone keen to make applications before these changes come into effect or alternative work and personal immigration routes should contact us as soon as possible to discuss options on 0207 033 9527 or at enquiries@vanessaganguin.com.

Skilled Worker salary threshold increase

Employers sponsoring anyone on a Skilled Worker visa must ensure the position pays whichever is the highest out of the salary threshold for the visa, whatever the UK government determine is the going rate for a particular occupation code, plus usually the hourly rate of £10.75.

The general salary threshold for sponsoring a Skilled Worker is set to increase from £26,200 to £38,700 on 4 April. So, for example, an employer sponsoring a public relations professional from that date would have to pay them a minimum of the salary threshold which will be £38,700, rather than £26,300 – the current going rate for that occupation code. As £38,700 is over the nation’s median wage this change will disproportionately affect regions outside the capital where salaries tend to be lower, as well as certain sectors which rely more on migrant talent and where pay rates tend to be lower, such as catering or construction.

Health and Care visa occupations and national pay scale occupations in education will be exempted from the changes to the Skilled Worker threshold. Health and Care workers not on a pay scale (such as care workers and senior care workers) will have a lower general threshold of £29,000. What the government terms pay scale workers (teacher / NHS type public sector roles with national pay scales that appear in Table 2 of the UK Immigration Rule’s Appendix Skilled Occupations) will have an even lower general threshold of £23,200.

Skilled Workers already on the immigration route will still be able to extend, change sponsor and settle without needing to meet the new £38,700 minimum salary threshold requirement. However, they will “need to meet the updated 25th percentiles using the latest pay data” when they make their next applications. In other words, the current £26,200 threshold should progress at the same rate as resident workers’ earnings may rise rather than leaping up to £38,700 (which is the median salary for all jobs at the skill level of RQF3).

We are already experiencing a rush on applications before 4 April from firms seeking to sponsor new hires on less than £38,700, or facing even larger hikes in the minimum going rate they must pay – see below.

Skilled Worker going rates going up

For many sponsored Skilled Worker roles an even more significant development will be an increase in their going rates too in April. The UK government currently prescribes going rates for occupations periodically using the 25th percentile of salaries for that role according to the Annual Survey of Hours and Earnings (ASHE) carried out by the Office of National Statistics.

From 4 April, the 50th percentile (median) of the 2023 ASHE will be used to set going rates for occupation codes. So, for example, human resource managers and directors would currently have to be paid £36,500 – the present going rate, but the median going rate according to the provisional ASHE 2023 data we have would be £49,409, which sponsoring employers would have to match as it’s a higher figure than the £38,700 new salary threshold.

Shortage Occupation List scrapped

The Home Secretary has commissioned the Migration Advisory Committee to undertake a review into replacing the Shortage Occupation List (SOL) which cuts the expense for employers sponsoring Skilled Workers to fill dire skills shortages. It will relaunch as the Immigration Salary List (ISL) on 4 April. The current SOL will remain in place until then.

When the SOL goes, employers will no longer be able to sponsor migrant workers in shortage occupations on the list at 20 percent below the set going rates.

The loss of the 20 percent discount at the same time as the other changes above will greatly increase the cost of sponsoring staff for some sectors, especially in some regions where wages tend to be lower. They may find themselves choosing to sponsor more senior staff and increasing the hours sponsored staff work to offset higher salaries which will have to be paid. Other firms, for instance those in high tech sectors, may be already paying over the new minimum salary threshold and going rate and will not be affected as much even if they are already relying on sponsoring talent on the SOL. Here are two examples which give you an idea why we are so keen to see whether the government will temper the Home Secretary’s announcements when the ISL is implemented.

A mechanical engineer can currently be sponsored on a salary of £26,400 or over as these roles are on the SOL. The new median going rate with no more 20 percent discount would be £42,463 – a significantly higher minimum salary. Or, for another example, there is also a current shortage of programmers and software developers in the UK. As they are on the SOL, they can be sponsored as Skilled Workers if they earn £27,200. From 4 April, if new programmers applying for the visa have to be paid a going rate based on the 2023 ASHE survey median salary for this occupation, it would be £49,430.

The Migration Advisory Committee has asked the government to reconsider removing a 20 percent discount for shortage occupations at the same time that it makes the minimum going rate that must be paid prohibitively high as without the 20 percent discount there is no point for most roles to be on the new rebranded list detailing which occupations have chronic skills shortages. The MAC has recommended that just 21 of the current 55 SOL occupation codes remain on the ISL.

The Migration Advisory Committee published its recommendations on 23 February and you can read them here. The Home Secretary’s letter commissioning this review made it clear that “part of the consideration for adding a role to the ISL should be whether the sector has a realistic and sustainable strategy for what happens when it is removed in future.” This would suggest an onus on sectors of the economy that want roles on the list to have a demonstrable long-term strategy to mitigate skills shortages which in some cases have become entrenched over many years, or may have arisen since the end of freedom of movement reduced the pool of candidates.

Another concern is that at present the only jobs asylum seekers are allowed to do – and only if they have been waiting over 12 months for a decision through no fault of their own – are roles on the SOL. With tens of thousands of asylum seekers and their dependants stuck in limbo, this latest review of the SOL has yet again recommended allowing them to fill any job vacancies, or at the very least, any skilled role if the SOL is scrapped. However, despite an estimated increase in tax revenue of £1.3 billion and reduction in  government expenditure of £6.7 billion by allowing asylum seekers to work, along with an estimated £1.6bn increase in GDP, there is already pressure building up from the more anti-immigration voices in the Conservative Party to deny asylum seekers the ability to work at all, tipping more into tax-payer funded semi-destitution. It will be interesting to see whether the government takes the committee’s recommendations on board and perhaps follows Ireland’s recent policy to allow asylum seekers to apply for a work permit if they have waited over half a year for an initial decision.

A Statement of Changes in the Immigration Rules due to be issued on 14 March 2024 will confirm what the government decides to do and will outline the workings of all the above changes for those sponsoring Skilled Workers.

There will be a fuller review of the new ISL later this year after the new list has been launched, involving engagement with stakeholders and a call for evidence for employers. However, this will only occur after the April changes.

The Government (with a lot of caveats) has estimated that all the above changes to the cost of sponsoring workers would have deterred about 13% of those granted a Skilled Worker visa this year. There is no estimate of the cost to businesses.

Carers’ dependants denied

From 11 March 2024, overseas care workers will no longer be able to bring dependent family members with them on care visas and social care firms who wish to sponsor care worker visas will need to be regulated by the Care Quality Commission (CQC). This includes those switching into these care visas from other immigration routes which permit dependants.

The affected occupation codes are 6145 care workers and home carers and 6146 senior care workers. Those already on this immigration route will still be able to bring dependants to Britain and remain with their dependants, including when extending their visa, changing employer (within these codes) and applying to settle in the UK.​

The government is calculating that there will still be enough people who want to come to the UK to work as carers even if they can’t bring dependants with them. After five years on their care visas, those that want to settle in the UK and imagine they may finally be reunited with their families are likely to be disappointed if nothing changes under the next government. They may not be earning enough to bring a partner to the UK (see family changes below) – and it is very difficult to bring a child to the UK if their other parent remains abroad.

Care providers who were sponsoring workers in exclusively non-regulated activities (and therefore not required to be registered with the CQC) before the rules change should be able to continue to sponsor these workers, including for extensions to their visa on those terms, although they will not be able to sponsor new ones.

Graduate visas review

The Home Secretary has announced that following the government stopping non-research postgraduates from bringing family to the UK from last month, the Graduate visa route which allows international graduates to live and work in the UK for two years (three for people completing doctoral courses) will also be reviewed.

The Home Secretary has said he will set out the full parameters of a Migration Advisory Committee review of the Graduate visa route “to ensure it works in the best interests of the UK and to ensure steps are being taken to prevent abuse.” The Government expects that the review will continue until late 2024.

The Graduate visa is very useful for employers who want to employ international students after they finish their UK degrees without the commitments or bureaucracy of sponsoring them and the higher education sector regards it an attractive prospect for ambitious international students who may want a springboard to a work immigration route to stay in the UK.

Family visa minimum income requirement increase

In a change that will only affect British and settled workers who may want partners to come to live with them from abroad, the Home Secretary originally announced that the minimum income they will have to earn to sponsor a partner on a family visa would practically double from £18,600 to £38,700 in the Spring.

Following a massive outcry, this will now be implemented in stages: initially the minimum income requirement will rise to £29,000 from 11 April 2024, then again in the Autumn to £34,500 and then in in Spring 2025 to £38,700. There will no longer be a separate income requirement for children on family visas too.

Those who already have a family visa on the five-year partner route, or who apply before the minimum income requirement is raised, will continue to have their applications assessed against the current income requirement of £18,600 and will not need to meet the increased threshold. This will also be the case for children seeking to join or accompany parents who already have permission (or apply for permission) before the rules change. Anyone granted a fiancé visa before the minimum income requirement is raised will still be assessed against the current income requirement when they come to apply for a family visa in the five-year partner route.

Those already in the UK on a different route who apply to switch into the five-year partner route after the minimum income requirement has been increased will be subject to the new income requirement.

The Home Office has admitted it envisages human rights challenges and insists that applicants will still be able to use savings to meet the minimum income requirement and that exceptional circumstances will be considered.

The cash savings of an applicant, an applicant’s sponsor, or combined savings from both, may be used towards the minimum income requirement, but the sum is high – currently a couple would need £62,500 in cash savings to be granted a two-and-a-half-year visa for a partner with no children. (NB: this is based on the current threshold of £18,600 so the new cash savings requirement could be higher.) Making applications in exceptional circumstances where income requirements cannot be met is always trickier and less predictable.

An estimate that between 10,000 to 30,000 people who may otherwise have qualified via the family route would be unable to do so, based on earnings alone in the Home Office’s assessment is chilling. Even with the first increase from £18,600 to £29,000, all else being constant, the Home Office admit that 40 to 50 percent of the UK working population would not be able to meet the threshold based on earnings alone.

Immigration Health Surcharge hike

On 6 February, the Immigration Health Surcharge (IHS) payable with a visa application was increased £624 to £1,035 per year and from £470 to £776 per year for students, their dependents, applicants for the Youth Mobility Scheme and children under 18. The IHS has already tripled since it was introduced in 2015 when it cost £200.

An adult on a five-year visa will now need to pay a total of £5,175 over the course of their stay on top of their visa application fees. A family of two adults and two children will need to pay £18,110 over the course of a five-year visa (up from £10,940). More employers may end up considering how much of these IHS increases they will shoulder and whether to pass such costs onto sponsored staff.

Ukraine Family Scheme scrapped

Employers of staff in the UK on Ukraine Schemes set up after the Russian invasion have been recently asking if they need to sponsor them as they come to the end of their leave in the UK. Announcements this week have given us some more certainty for those in the UK on these schemes, many of whom have embarked on careers or education.

The UK Government has announced a Ukraine Permission Extension Scheme: those given permission to be in the UK under one of the Ukraine Schemes may be able to apply for a further 18 months permission to stay in the UK under the new Ukraine Permission Extension scheme. They should be able to apply three months before existing permission to remain is due to expire. This means that those on the earliest visas, which were due to expire in March 2025, may be able to stay until at least September 2026.

If you have employees from Ukraine that wish to bring family to the UK they should be aware that with no notice and effective immediately, the UK government shut down the Ukraine Family Scheme to new applicants on 19 February. The Immigration Minister said applicants will now have to apply to the Homes for Ukraine scheme which remains open, along with the Ukraine Extension scheme. However, only those with British or Irish citizenship or settled status or Indefinite Leave to Remain can now sponsor a Ukrainian person under the Homes for Ukraine scheme. Previously, a sponsor only needed to hold at least six months’ permission to stay in the UK from the date of the visa application – so that would have meant many Ukrainians in the UK would have still been able to sponsor family wanting to join them.

Ukrainians in the UK on some other visas, such as those sponsored by employers as Skilled Workers, may be able to bring dependent partners and children to the UK.

In other changes, permission granted to all new applicants to the Homes for Ukraine Scheme, including eligible minors, has been halved from 36 months to 18 months and children born in the UK to those who hold permission under the Ukraine Schemes will be eligible to apply for permission under the Ukraine Extension Scheme beyond its closure on 16 May 2024. You can find more about these changes to Ukraine schemes here.

Anyone keen to discuss any of the above changes, alternative work and personal immigration solutions or indeed any UK immigration matters can contact us on 0207 033 9527 or at enquiries@vanessaganguin.com. If it is regarding an application to be made before April, we would advise moving swiftly on it.