Review of the recent changes to Immigration Rules

This week, Claire Taylor-Evans, Partner and Jessica Clough, Chartered Legal Executive in the Employment and Immigration team, looks at the big changes to the Immigration Rules which occurred in April 2024 and the impact they have had on recruitment in the Leisure and Hospitality sector to date and what might be in store in the 2024 Election.

Increases to minimum salary thresholds

On 4th April 2024 the minimum salary threshold for new Skilled Worker applications (i.e. those applying for the first time from abroad, or switching to the Skilled Worker category from a non-sponsored route within the UK) increased:

• From £26,200/year to £38,700/year (or the going rate for the role, whichever is higher); or
• From £20,960/year to £30,960/year (or the going rate for the role, whichever is higher) for those on the shortage occupation list or benefiting from the new entrant rate.

These increases have made it far harder for Leisure and Hospitality businesses to afford to sponsor new workers from abroad, unless they are in more senior roles which justify the higher salary requirement.

However, the good news is that those sponsored workers who are already in the UK and are extending their visas, changing employer or switching their applications between sponsored routes within the UK after 4th April 2024 are not subject to the new general salary threshold of £38,700/year. Instead, they are subject to a more modest updated minimum salary threshold of:

• £29,000/year (or the going rate for the role, whichever is higher)
• £23,200/year (or the going rate for the role, whichever is higher) for those on the shortage occupation list or benefitting from the new entrant rate.

This difference in salary threshold places an incentive on businesses to retain existing sponsored workers and to focus recruitment of sponsored workers who are already in the UK, rather than those coming from abroad for the first time.

Certificates of Sponsorship issued before 4^th April 2024

For those whose Certificate of Sponsorship were assigned prior to 4th April 2024, their visa applications will still be processed under the old rules, so the £26,200/year salary threshold will continue to apply.

Certificates of Sponsorship are only valid for 3 months, so their visa applications will need to be submitted before the COS expiry date.

If your business has any individuals for whom a Certificate of Sponsorship was assigned prior to 4 April 2024 but they have not yet submitted their visa application, then they will need to do so as soon as possible if they want to benefit from the old salary threshold.  This is particularly important for those in job codes which are no longer eligible for sponsorship under the post-April 2024 rules, such as Massage Therapists.

The Skilled Occupation Classifications

On 4th April 2024 there were a number of changes to the Skilled Occupation Classifications which are eligible for sponsorship. Some job types have moved job codes and some previously popular jobs, such as massage therapists, are no longer eligible for sponsorship (unless extending visa within the UK, with the same employer) as they are no longer considered sufficiently skilled.

The occupation-specific salary thresholds

Other changes to the Skilled Occupation Classifications included a move to the Office for National Statistics 2020 job and earning data (from the 2010 data). This means the salary thresholds for individual job codes have been increased in line with the increases to national pay data.

For new visas, the “going rates” for individual job classifications will now be based on the average salary for the role (also known as the 50th percentile), rather than the 25th percentile of the salary for the role. Those renewing Skilled Worker applications within the UK will still benefit from the 25th percentile figures but based on the 2020 data.

In some cases, going rates for the roles may now be higher than the General threshold for the role. This is something Sponsors will need to bear in mind when considering if the salary they are offering meets the salary thresholds as the higher of the General Salary threshold or the Occupation Specific threshold must be used.

The occupation specific salary thresholds vary from job code to job code and are largely based on a 37.5 hour working week. If the individual’s role requires them to work more than 37.5 hours/week, then the Occupation Specific threshold must be re-calculated and may in some cases be higher than the General Salary Threshold as a result.

The Shortage Occupation List

As of 4^th April 2024 the Shortage Occupation List was rebranded as the Immigration Salary List. It contains far fewer job roles than previously, and unfortunately, no Leisure and Hospitality roles.

What employers need to know

Sponsorship, especially of new applicants from overseas, has become significantly more expensive since April 2024 due to the higher salary thresholds which now apply.

Employers will need to be aware of the new salary thresholds and how to apply them correctly to ensure they do not fall short of the required salaries required under the new rules, which could lead to visa refusals and disappointment.  

Seek advice from an immigration advisor early in the planning process to ensure you know what salary thresholds will apply and to check your recruitment strategy is based on the latest Immigration Rules.

Employers share the visa fee costs with the employee through use of repayment clauses, clawback clauses (in the event they leave before the end of their visa period), or employee loans. We have seen an increase in L&H businesses using these arrangements since the rules changed. However, loans and deductions should not be used to reduce the individual’s salary below the Skilled Worker minimum salary thresholds, so will not be appropriate in all situations.

Unfortunately, the L&H sector is acknowledged to be one of the industries which is being most impacted by the salary threshold changes due to the heavy reliance on overseas workers in the sector (28% of the workforce in 2020) and due to the modest salaries offered for many roles. 

In some cases, it may no longer be possible or financially feasible for a business to sponsor new applicants, in which case it may need to prioritise retention of existing sponsored staff and/or recruiting sponsored workers who are already in the UK above those from overseas.

Businesses should educate their existing sponsored workers about the ability to apply for Indefinite Leave to Remain, which can allow those who are eligible to remain in the UK without a sponsor after a sufficient length of residence in the UK.

Finally, businesses should think strategically about their use of the Immigration system. The starting point for recruitment should always be the UK talent pool. If there is a shortage of a particular skill set in the UK then the immigration system can be very useful, but should not be the default and ideally should be considered alongside other strategies, such as retaining and providing training and upskilling opportunities for your existing workforce. 

July 2024 Election round up

With an election and potential change of government coming soon, will we see a major change of strategy on immigration?  Unfortunately, it seems unlikely:

Conservatives – want to introduce a binding cap on migration which will fall every year over the next Parliament, they also plan to keep raising Skilled Worker salary thresholds automatically each year with inflation.

Labour – want to reduce delays to immigration processing and establish a framework for collaborating with skills bodies to grow local skills

Lib Dems – want to apply a flexible merit based system to the salary thresholds, but also focus on training to address skills gaps in the UK. They want to expand the Youth Mobility Scheme by increasing the eligible age limit to 35, abolishing fees, and extending visa length to 3 years.

We can help

For further information, or if you would like to discuss how the changes will affect your L&H business and workforce planning, please get in touch with Chris Harber, Head of Immigration.