New Immigration Rules introduce substantially higher salary thresholds to reduce net migration

The long-anticipated Statement of Changes HC 590 to the Immigration Rules was finally published on 14 March 2024. In line with the Home Secretary’s 5-point plan to reduce net migration to the UK, the new Rules will substantially increase the minimum salary thresholds and ‘going rates’ for the Skilled Worker route from 4 April 2024, and increase the Family Route minimum income thresholds from 11 April 2024. These are the most significant changes to be introduced to the Worker route since the Brexit changes of 1 December 2020. Further details on these changes, as well as what employers need to do now, are outlined below.

Skilled Worker route

New salary thresholds and ‘going rates’: Effective 4 April 2024

• For all Certificates of Sponsorship (COS), aka work permits, assigned on or after 4 April 2024, the Skilled Worker salary threshold will increase to £38,700 per year (a huge increase from £26,200 per year currently) OR the ‘going rate’ for the role (i.e. market rate), whichever is higher.
• ‘Going rates’ are determined by the Occupation Code sponsorship type for each role. The new ‘going rates’ are calculated with reference to the current “median” salary levels (i.e. at the 50th percentile), using Office for National Statistics (ONS) 2020 data. This will have a significant impact on many sponsored roles. Currently, the going rates are based on ONS data from 2010 and calculated at the 25th percentile. This means that roles will have to meet a ‘going rate’ which is much higher than the new £38,700 per annum threshold. To take just one example, Occupation Code 2423 for Management Consultants and Business Analysts will now be referred to as Occupation Code 2431, and its median going rate based on 2020 ONS data is £48,000 per year based on a 37.5 hour week. This is an increase from the current going rate of £32,000 per annum, based on the 25th percentile of 2010 ONS data, and is much higher than the new general threshold of £38,700 per year.
• Tradeable points are available for the following circumstances:
  • Option B: Applicants who hold a PhD in a subject relevant to the job can benefit from a lower salary threshold of £34,830 per year (an increase from £23,580 per year now) OR 90% of the going rate for the Occupation Code (based on 50th percentile of the 2020 codes), whichever is higher.
  • Option C: Applicants who hold a PhD in a STEM subject relevant to the job can benefit from a lower salary threshold of £30,960 per year (an increase from £20,960 now) OR 80% of the going rate for the Occupation Code (based on 50th percentile of the 2020 codes), whichever is higher.
  • Option D: Applicants with a job on the Immigration Salary List (which will replace the Shortage Occupation List) can benefit from a lower salary threshold of £30,960 per year (up from £20,960 currently) OR the going rate for the Occupation Code (based on 50th percentile of the 2020 codes), whichever is higher. Importantly, there is no going rate discount at all for roles under the Immigration Salary List, which means in practice the applicable salary will almost always be higher than the £30,960 minimum.
  • Option E: Applicants who are ‘new entrants’ to the labour market (such as recent graduates or young people early in their careers who must meet specific eligibility requirements) can benefit from a lower salary threshold of £30,960 per year (up from £20,960 currently) OR 70% of the going rate for the Occupation Code (based on 50th percentile of the 2020 codes), whichever is higher.

• Those with a Skilled Worker Certificate of Sponsorship assigned before 4 April 2024 will benefit from transitional provisions in place until 3 April 2030 if they extend their current roles before then in respect of tradeable options F, G, H, I and J (see below for full details). Although the official cut-off date is 4 April 2024, the Sponsor Management System will be unavailable from 7pm on 2 April 2024 until 9am on 4 April 2024. This means that all Certificates of Sponsorship will need to be approved and assigned by no later than 7pm on Tuesday 2 April in order to benefit from the current salary thresholds.

Exemptions to new Skilled Worker median salary thresholds

Health and Care Worker Category

There is a new Health and Care Worker category. Roles in this category are exempt from the new median salary requirements – however, they will need to meet going rates in the 25th percentile.

Health and Education codes where going rates are based on national pay scales

Under Option K, jobs listed in a health or education occupation code will need to exceed both £23,200 per year (an increase from £20,960 per year, but not as large an increase as in other roles), and the going rate (based on national teachers’ pay scales). Further details on the impact of the recent immigration changes on the education sector can be found here.

Transitional provisions for Skilled Workers where the CoS is assigned before 4 April 2024

As mentioned above, transitional provisions will apply until 3 April 2030 for anyone with a Certificate of Sponsorship assigned before 4 April 2024, who is extending their current permission with the same sponsor under the Skilled Worker route. However, when they come to extend, they will also be subject to higher salary thresholds, albeit not as high as the new salary or going rates.

Tradeable points options F, G, H, I and J cover the various transitional salary thresholds for this group. For most applicants, unless they benefit from a PhD relevant to the role (Options G and H) or new entrant provisions (Option J) or their role is on the new Immigration Salary List (Option I), they will need to meet a new minimum salary of £29,000 per year and the 25th percentile of going rates based on the updated SOC 2020 codes. This is higher than the current threshold of £26,200 per annum and the 25th percentile of the SOC 2010 figures, so employers will need to ensure they can meet the higher rates before they assign a COS at extension stage.

The Explanatory Memorandum to the Statement of Changes suggests that the transitional lower salary thresholds will also apply to change of employment applications (i.e. when an existing sponsored worker switches to a new employer), however the wording of the Statement of Changes itself suggests that for most Occupation Codes this is only applicable to applicants who applying to work with the same sponsor. Therefore, we are seeking further clarity on this point.

For Settlement applications, all Skilled Worker visa holders whose COS was assigned before 4 April 2024 will need to meet the new rate of £29,000 per annum and the 25th percentile of going rates based on the SOC 2020 codes. The tradeable options G, H, I and J will not be available for Settlement applications.

There is a separate table of Occupation Codes which is only applicable to Occupation Codes for Skilled Worker applicants granted permission as a Skilled Worker under the rules in place before 4 April who have held continuous permission as a Skilled Worker since then (such as nannies and au pairs).

Replacement of the Shortage Occupation List with the new Immigration Salary List

As mentioned above, the Shortage Occupation List has been replaced by a new Immigration Salary List (ISL). This list is not intended to list all roles in which there are a shortage of workers – rather, it is only intended to be a list of roles for which the Government considers it sensible to offer a discounted salary threshold.

The new Immigration Salary List is therefore shorter than the previous Shortage Occupation List and does not contain roles in several key sectors which routinely experience labour shortages in the UK (such as roles in the tech sector). As part of the Government’s 5-point plan to reduce net migration to the UK, the 20% discount to ‘going rates’ for these roles has been removed and there is now only a discount to the overall salary threshold (£30,960 per year instead of the £38,700 per year general threshold).

The Migration Advisory Committee (MAC) recently carried out a “rapid review” of the Shortage Occupation List. In his response, the Home Secretary accepted most of the recommendations in full, except he has included two Occupation Codes relating to fishing on the new ISL, against the MAC’s recommendations. The Government has accepted that there are concerns about exploitation in this sector and has stated that further support is needed to address these. These Codes will therefore remain on the new ISL temporarily from 4 April, until the MAC carries out its full review of the ISL. The Government intends to commission the MAC to carry out the full review over the remainder of 2024.

One piece of good news for the Creative sector is that the Home Secretary’s response states that the Government will not apply a salary threshold to the Creative Worker route, as this would be “incompatible with the diverse and often short-term nature of roles within the creative industries.” Instead, where there is no code of practice in place, the Government will require that workers coming into the UK under these routes are making a unique contribution to the UK’s cultural life. They will also remove the Resident Labour Market test (RLMT) under this route.

However, the Government did not respond to the MAC’s recommendation to allow asylum seekers to be permitted to work in any job rather than only in occupations on the ISL, or to wider questions about the utility of the ISL now that the 20% discount is no longer available. While roles on the ISL benefit from a lower general salary threshold of £30,960, in reality, the ‘going rates’ for most of the roles in the ISL will render this concession practically useless, as employers will need to pay the new going rate based on the 50th percentile of 2020 rates – and this rate is almost always higher than £30,960 per annum.

Currently sponsored Skilled Workers whose role was on the Shortage Occupation List but is not on the new ISL will be able to rely on the lower ISL thresholds if they are sponsored for a role which was eligible under the rules applicable at the time of their application, provided they are applying for a role with the same sponsor. This concession does not appear to extend to those applying to switch sponsors but we are seeking to clarify this point.

Expansion of the scope of “supplementary work”

An unexpected change in the new Immigration Rules is the expansion of the definition of “supplementary work” to include all occupations which are eligible under “Appendix Skilled Workers”.

Currently, Skilled Worker visa holders can only carry out supplementary work if the additional work is on the Shortage Occupation List or is in the same profession and at the same professional level as the role for which they are sponsored. They also need to ensure that supplementary work does not exceed 20 hours per week and is outside of their contracted hours – these restrictions relating to the time per week still apply, but Skilled Workers will now be able to undertake a wider variety of work within these time restraints. This will allow them to undertake a role in an entirely different field to their current role, provided that they only do so for up to 20 hours per week and outside of the contracted hours for their sponsored role.

Global Business Mobility Route

Senior or Specialist Worker routes

• The salary threshold for the Senior or Specialist Worker route is also increasing to £48,500 per annum (up from £45,800 per annum), OR the going rate for the Occupation Code, whichever is higher.
• The ‘going rate’ will remain in the 25th percentile of earnings, but of the new 2023 rates.
• Transitional provisions apply until 3 April 2030 for individuals with a COS under this route assigned before 4 April 2024, but only for applicants who are applying to extend in the same role with the same sponsor. Applicants under this route are not eligible for Settlement in the UK.

Graduate Trainee route

• The salary for the Global Business Mobility: Graduate Trainee route will increase from £24,220 per year to £25,410 per year OR 70% of the going rate (at the 25th percentile, using 2023 figures), whichever is higher.

Creative Worker routes

As explained above, the Home Secretary has rejected the MAC’s recommendation to apply a minimum salary threshold to the Creative Worker route. Rather, a new requirement for the Creative Worker to make a unique contribution to creative life in the UK will be introduced. No Resident Labour Market Test (RLMT) will be required.

Increase in income requirements for the Family routes – from 11 April 2024

• As expected following the Government’s 5-point plan to reduce net migration to the UK, from 11 April 2024, the minimum income requirement will increase from £18,600 per year to £29,000 per year for spouse / partners of British and settled nationals. This is part of a phased approach, with further increases to this requirement anticipated in the future.
• There will no longer be a requirement to show additional income for each child joining the application.
• Transitional provisions will remain in place for individuals who submit their application before 11 April 2024 – these applicants will need to meet current income requirements and will not need to meet the higher thresholds which will come into effect on 11 April, provided that they submit a successful application before this date.
• Exceptions to the new minimum income requirement will be available for some circumstances such as if there are insurmountable obstacles for family life with a partner continuing to live outside of the UK.
• Further details can be found here.

Changes to English language requirements

Applicants on many UK visa routes, including the Skilled Worker route, need to meet the English language requirement. An international GCSE will now be acceptable as one of the ways this can be evidenced.

10-year Long Residence route changes

The 10-year residence route allows applicants to apply for Indefinite Leave to Remain in the UK / Settlement after ten years’ continuous residence in the UK, which can currently be split across various routes with little restriction.

However, under the new rules, applicants will need to have held their current visa permission type for at least one year, and time spent in the UK as a visitor or a short-term student will no longer count towards the 10 years of residence required in the UK.

In addition, the absence limits (currently allowing up to 18 months of absence outside the UK for the 10-year period, with no more than six continuous months’ absence at a time) will be brought into line with the general “continuous residence” absence limit of “no more than 180 days in any 12 month period”, throughout the entire previous 10 years.

What does all of this mean for employers?

• Post 4 April, employers will need to pay much higher salaries in order to sponsor workers.
• Sponsors should urgently consider bringing forward assigning COS before 7pm on 2 April if possible, to take advantage of the current lower salary thresholds. The Sponsor Management System will be unavailable from 7pm on 2 April until 9am on 4 April, so effectively all COS must be assigned by 7pm on 2 April to benefit from current salary thresholds.
• If you need to apply for a Defined Certificate of Sponsorship (DCOS) (for out of country Skilled Worker roles) or an Undefined Certificate of Sponsorship (for in-country Skilled Worker roles), in order to assign a COS before 7pm on 2 April, you must do so as soon as possible as there are long delays in obtaining both types of COS. Priority requests can be submitted for in-country Undefined Skilled Worker COS requests, however there are only 60 slots available per day from 9am, and the current auto-response states that there are over 1000 requests, and the 60 slots are filled by 9am. DCOS requests are also being delayed and in some cases taking two-four weeks to come through instead of one-two working days.
• Employers should audit their existing Skilled Worker population to ensure the necessary budget is available to pay the higher general threshold and going rates applicable when these individuals need to extend their visas, or apply for Settlement in the UK.
• If you decide to pay a sponsored worker more in order to meet the new Skilled Worker salary thresholds, or if you need to consider terminating employment in the future because you can no longer afford to pay the new Skilled Worker rates applicable at extension stage, do remember to take employment law advice first as this may result in discrimination claims.
• When assigning a COS post 4 April, sponsors must ensure that they are using the correct general salary threshold for the various tradeable points options and correct occupation-related going rates. The new Codes are complex and failure to assign a COS correctly can result in a visa refusal of your sponsored worker. We can help you navigate through these salary requirements to ensure you are compliant.
• Consider if any alternative personal immigration options are available for migrant workers who cannot meet the new salary thresholds. Contact our personal immigration team for a consultation if applicable.

Please contact our Immigration and / or Employment teams to discuss any questions you have about this update or if you need assistance with a sponsored worker, family, or other type of UK immigration work application. In addition, our Immigration team will be holding a Webinar shortly to discuss the new Rule changes.