Employers who are planning to sponsor a worker under the Skilled Worker route should be aware that the minimum salary requirement will increase significantly on 4 April 2024.
We explained previously that it had been announced at the end of last year that the minimum threshold would increase from £26,200 to £38,700. Going rates will also increase. A recent Ministerial Statement has confirmed the exact date when the change will take place.
Employers should plan ahead
Knowing when the changes will happen will enable employers to consider bringing plans forward so that a Skilled Worker visa application can be made before 4 April 2024.
A Certificate of Sponsorship (CoS) is needed to support an application for a Skilled Worker visa. We therefore recommend that employers take early steps to ensure these are in place. It is possible to expedite CoS requests using the priority service.
Who isn’t affected by the increase?
The increase to the minimum salary threshold will not apply when those who are already on the Skilled Worker route when the change comes into force make further applications. This may be, for example, to change employment, extend their stay or for Indefinite Leave to Remain. It also will not apply to those on the Health and Care visa route and roles that appear on national pay scales, such as teachers.
The going rate
All eligible Skilled Worker roles fall under a specific ‘occupation code‘. This has a specified minimum salary, known as the going rate.
The current annual going rates are set at the 25th percentile of the Office for National Statistics Annual Survey of Hours and Earnings (ASHE) 2021.
Pay must meet both the minimum salary threshold and the going rate for the role.
From 4 April 2024, for new arrivals into the Skilled Worker route, the going rates will be increased from the 25th percentile to the median (50th percentile) for each occupation code. This will be based on ASHE data from 2023 instead of 2021. This will mean a significant increase for many occupation codes.
The change will not be so significant for those who are already in the route by 4 April 2024. This is because the going rates will continue to be set at the 25th percentile for each occupation code. However, they will be based on the latest ASHE 2023 data instead of 2021. This will therefore mean that there will be some increases.
Example 1:
Sales accounts and business development managers (SOC 2010 occupation code 3545 / SOC 2020 occupation code 3556):
Current annual going rate – £35,100
Predicted new rate for new applicants – £52,495
Predicted new rate for existing Skilled Workers – £39,093
Example 2:
Programmers and software development professionals (SOC 2010 occupation code 2136 / SOC 2020 occupation code 2134):
Current annual going rate – £27,200 (which includes the current discounted rate of 20% for a shortage occupation role)
Predicted new rate for new applicants – £49,430
Predicted new rate for existing Skilled Workers – £36,296
New entrants: graduates and those under 26
The government has yet to confirm if it will retain the current new entrant rate. This provides a lower threshold and discounted going rates for those switching from the Student and Graduate routes, those under 26 and young professionals such as accountants and solicitors working towards professional registration.
If the 20% discount will be retained, this will mean that the new threshold of £38,700 would be reduced to £30,960. Employers should note, however, that even if the current 30% discount is applied to the going rate, the increases explained above may mean that the discounted going rate, which must be paid, is still higher than the discounted minimum threshold.
Because the new entrant rate can only be paid for up to four years, including any time spent on the Graduate visa, employers will also need to plan for significant increases to salary levels when the individual moves out of the new entrant rate and enters the non-discounted threshold.
Shortage occupations
Certain occupations currently benefit from a 20% reduction to the salary thresholds. These occupations are outlined in the Shortage Occupation List, designed to tackle labour shortages in these areas.
Under the proposed changes, the list will be rebranded the Immigration Salary List (ISL). The 20% discount will also end and the Migration Advisory Committee (MAC) will review the composition of the list in line with increased salary thresholds.
There will still be a discount, with the jobs on the ISL benefitting from a lower general threshold of potentially as much as 80% of the new £38,700 threshold. However, in many cases the going rate will be much higher in any event.
Statement of Changes
A Statement of Changes to the Immigration Rules, which is the legal mechanism behind the change, will be laid before Parliament on 14 March 2024. This will amend Appendix Skilled Worker. This will contain much needed detail.
Business immigration services: How our Immigration Solicitors can help
We are holding a complimentary webinar on 20 March 2024 when we will review these and other changes.
Our solicitors are experienced in all aspects of sponsorship and preparing Skilled Worker route applications. If you require advice, our team would be happy to have an initial complimentary discussion with you. Please contact us or complete the enquiry form below.
