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FAQs: How will the significant immigration changes to sponsorship affect your business?

The Home Office recently published the latest Statement of Changes. Running to nearly 300 pages, these set out the details of some of the most significant immigration changes for a decade and certainly since Brexit. The changes will have a particular impact on employers who sponsor overseas nationals as minimum salary thresholds, as well as going rate salaries for sponsored roles, are all set to rise significantly. In addition, the current Shortage Occupation List will be abolished and replaced with a far shorter Immigration Salary List. Complex transitional rules are also being introduced. These, together with other changes, are intended to reduce net migration figures by around 300,000 over the next year. We’ve set out below details of the key changes sponsors should be aware of. 

Who will be affected by the changes? 

The new Immigration Rules will apply if the Certificate of Sponsorship is assigned on or after 4 April 2024. In order to benefit from the current Immigration Rules and the lower salary thresholds, the Certificate of Sponsorship must be assigned to the sponsored worker before 7pm on 2 April 2024 (as the sponsor management system will not be available between 7pm on 2 April and 9am on 4 April 2024). Once the Certificate of Sponsorship has been assigned, the individual must then submit their immigration application within three months of the date on which the Certificate of Sponsorship was assigned. 

What are the new general salary thresholds? Will they apply to all roles? 

Under the new Immigration Rules, the general minimum salary threshold for Skilled Workers will increase by nearly 50%, from £26,200 to £38,700 per annum. The general minimum salary threshold for those applying under the Global Mobility: Senior/Specialist Worker route will increase from £45,800 to £48,500 per annum.

There are a number of circumstances when the new minimum salary threshold will not apply and these are detailed below. In particular, the new minimum salary threshold will not apply to Skilled Workers sponsored in occupations where the going rate salaries are set using national pay scales, or to certain roles falling within the Health and Care Worker visa sub-route. 

For those undertaking a role falling within the Health and Care Worker visa occupations and whose salary is not based on national pay scales, the general salary threshold will increase to £29,000 per year. For those occupations where the salary requirements are based on national pay scales (including many Health and Care Worker visa roles) the general salary threshold will increase to £23,200 per year. 

Will any discounts to the general minimum salary threshold apply? 

As is currently the case for Skilled Workers, discounted minimum salary thresholds will still apply if the individual being sponsored:

  • has a PhD which is relevant to their role (in which case the minimum salary threshold is £34,830 per annum);
  • has a PhD in a STEM subject which is relevant to their role (in which case the minimum salary threshold is £30,960 per annum); or
  • is a new entrant (in which case the minimum salary threshold is £30,960 per annum). There are however very specific eligibility requirements and individuals may only be sponsored under the new entrant sub route for up to four years (and any time already spent under the Skilled Worker, Tier 2 or graduate route counts towards the four years). 

These reductions to the going rate salaries will not apply at the settlement stage so employers will need to plan accordingly.   

Will the going rate salaries and SOC Codes change too? 

Prior to issuing a Certificate of Sponsorship, the sponsor must ensure that all of the requirements for the relevant immigration category are met. In particular, in all cases there must be a genuine vacancy in the UK for that role and the role must be sufficiently skilled. As part of the process, before sponsoring someone, the sponsor must select the relevant Standard Occupational Classification (SOC Code) for that role. The SOC Code is a coding framework used to classify occupations, enabling comparisons of occupations across different datasets. It assigns all jobs a four-digit code based on the roles and skills and qualifications needed for the job.

SOC Codes are used to identify the relevant going rate salary for each job, both at “new entrant” and “experienced” rates. If the going rate salary is higher than the minimum salary threshold then the individual must be paid at least the going rate salary applicable to their role. 

The SOC Code scheme 2010 applies until 3 April 2024. This is based on salary data compiled by the Office of National Statistics in 2021. With effect from 4 April 2024, the Home Office will rely on SOC Code scheme 2020, which uses 2023 salary data. This, of itself, means that in many cases the going rate salary for jobs in most SOC Codes will increase as there has been wage inflation in the period between 2021 and 2023. 

Further, in a number of cases, the four digit SOC Code for the role will also change so sponsors will need to ensure that they check that they are using the correct SOC Code when they assign a Certificate of Sponsorship on or after 4 April 2024. A small number of jobs will also no longer be eligible for sponsorship for new applications (although individuals may extend their immigration permission if they are currently sponsored to undertake one of these roles, provided that they remain with the same employer in the same role). 

In addition to this change, from 4 April 2024 the going rate salaries will, in most cases, be based on the 50th percentile of salaries for roles within that SOC Code, rather than being based on the 25th percentile (as is the case pre-4 April 2024). This will result in some very significant increases to the going rate salaries for certain roles and is likely to have a particular impact on employers based outside of London and the South East, start ups and smaller companies, which are less likely to be able to pay salaries at the 50th percentile rate. 

Will the going rate salaries be discounted in any cases? 

The going rate salaries will be discounted by 10% for these with a PhD relevant to their role, by 20% for those with a PhD in a STEM subject relevant to their role and by 30% for those who are new entrants (subject to the four year maximum). However, the salary paid may not be reduced below £15.88 per hour so in some cases the full discount to the going rate will not apply. 

What is the impact of the abolition of the Shortage Occupation List and the introduction of the new Immigration Salary List? 

Currently, pre-4 April 2024, around 30% of all jobs eligible for sponsorship under the Skilled Worker route are on the Shortage Occupation List. Benefits include the fact that there is a lower minimum salary threshold for roles on the Shortage Occupation List and a 20% discount is applied to the going rate salary.

With effect from 4 April 2024, the Shortage Occupation List will be replaced with the new Immigration Salary List. Just over 20 SOC Codes are included on this list, mainly in the pharmaceutical, construction, agricultural and care sectors. There are no longer any IT or tech roles on the list. Importantly, a reduced minimum salary threshold of £30,960 per year will apply to roles on this list but the 20% reduction to the going rate salary will no longer apply.

What are the transitional arrangements? 

There are a number of complex transitional arrangements which apply for all applications submitted on or before 30 April 2030. Broadly, these transitional arrangements will apply to those whose previous application was decided in accordance with the Immigration Rules in force prior to 4 April 2024.  In the future, sponsors wishing to employ someone who is already in the UK under one of the sponsored routes will need to check carefully if the individual benefits from the transitional arrangements as some individuals will still benefit from the transitional arrangements, even if they applied for their immigration permission on or after 4 April 2024. 

If individuals benefit from the transitional arrangements, reduced minimum salary thresholds will apply to them when they apply for further permission to stay, switch sponsors or apply for indefinite leave to remain. Lower going rate salaries will also generally apply. 

Have there been changes to the supplementary employment rules? 

There has been a significant change as, from 4 April 2024, Skilled Workers will be permitted to undertake supplementary employment for up to 20 hours a week in any eligible SOC 2020 occupation code. This means that they will not be limited to roles on the Immigration Salary List or jobs at the same profession and at the same professional level as their sponsored job, as is the case up to 3 April 2024 (and remains the case for other routes). 

Employers which are not the sponsor but employ someone to undertake supplemental employment will need to ensure that any employee they recruit on this basis is complying with the terms of the Skilled Worker leave. In addition, as part of the right to work check they must obtain a letter or other evidence from the employee’s sponsor confirming:

  • the individual is still working for their sponsor.
  • the job description and occupation code; and
  • the individual’s normal working hours.

Individuals undertaking supplementary employment are only able to undertake this additional work outside of the contractual hours which apply to their sponsored role and this will need to be monitored carefully. 

Our current understanding is that this change only applies to those who are granted immigration permission as a Skilled Worker under the Immigration Rules in place since 4 April 2024.