UK: Skilled Worker Salary Rate Transitional Arrangements

Changes to the Immigration Rules regarding salary can make extension and settlement applications nerve-wracking for Skilled Workers and sponsor licence holders.

For those originally granted as either Tier 2 (General) migrants or Skilled Workers and who have had continuous permission under Tier 2 (General) or as a Skilled Worker ever since, it is possible to rely on the transitional arrangements in relation to salary. These arrangements ease the salary requirement in various ways, enabling people who started on the route to remain and settle on it, even where sponsoring employers cannot keep up with increases and other changes to the salary Rules.

Skilled Worker Salary Rate Transitional Arrangements

There are four transitional arrangements:

1. In certain circumstances, guaranteed allowances can be relied on;
2. In certain circumstances, the general salary requirement is reduced to £20,800;
3. For migrants in certain occupation codes, the going rates are reduced;
4. In certain circumstances, the requirement to be paid at least £10.75 per hour is disregarded.

Each of these arrangements is found in the Immigration Rules in Appendix Skilled Worker. It is important to look closely at each arrangement to determine whether it applies in the individual Skilled Worker's circumstances. Of course, Skilled Workers will also need to meet the rest of the requirements in addition to the transitional arrangement they wish to rely on.

Guaranteed Allowances

Usually, a Skilled Worker's salary will only include guaranteed gross basic pay. It is only possible to include other payments where the sponsor confirms that they are guaranteed and will be treated the same as a gross basic pay for tax, pension and NI purposes.

The exception in the transitional arrangements allows those originally granted permission as Tier 2 (General) migrants to continue to include other allowances where all the following conditions are met:

• the date of application is before 01 December 2026;
• they are applying to extend with the same sponsor;
• the allowances are guaranteed;
• the allowances will be paid for the duration of the applicant's permission (one-off bonuses are not included and cannot be prorated); and
• the allowances would be paid to a local settled worker in similar circumstances (such as the London weighting).

This arrangement is helpful in a range of circumstances where guaranteed allowances have been relied on, and replacing them with an increased basic salary is difficult or undesirable for employers.

Case study: Carla entered the UK as a Tier 2 (General) migrant in 2019, working as a university lecturer. Her salary has always included a housing allowance which was guaranteed to be paid for the duration of her contract, but was not treated the same as gross basic pay for tax purposes. The housing allowance was also paid to all other lecturers at her university, regardless of their nationality or immigration status. Carla intends to stay with her current employer. She will therefore be able to continue to rely on this housing allowance to meet the salary requirement at the extension and settlement stages, even though the Skilled Worker Rules otherwise prohibit allowances to cover accommodation costs.

General Salary Requirement

Since 12 April 2023, the general minimum salary requirement has been set at £26,200 per annum. The second transitional arrangement makes it possible for those originally granted permission as Tier 2 (General) migrants to rely on a lower general salary of £20,800 where the following conditions are met:

• The date of application is before 24 May 2023; and
• The certificate of sponsorship was assigned before 24 November 2016.

Note that this arrangement does not lower the going rate, so it will only assist an applicant where the going rate is lower than the general salary threshold.

This arrangement is now of limited application, given the fast-approaching deadline of 24 May 2023. However, those to whom it does apply will now have been on the Tier 2 (General)/Skilled Worker route for more than five years. This arrangement may therefore make an indefinite leave to remain application possible where otherwise the salary requirement would have prevented it.

Case study: Jeremy entered the UK as a Tier 2 (General) migrant in 2015, working as a fitness instructor. He was paid £20,850 per annum when he entered. His employer's business has not flourished, and it has been impossible to increase Jeremy's pay since 2015, but they have continued to require his services. The current going rate for fitness instructors is £15,700. Therefore, Jeremy will be able to extend or settle as a Skilled Worker in the UK while continuing to earn £20,850, so long as he does so before 24 May 2023.

Going Rate Requirement

Under the third transitional arrangement, it is possible for those originally granted permission as Tier 2 (General) migrants to rely on a lower going rate where the following conditions are met:

• The date of application is before 01 December 2026;
• The applicant is and has always been sponsored in one of the following occupation codes:
  • 2113 Physical scientists;
  • 2119 Natural and social science professionals not elsewhere classified; or
  • 2311 Higher education teaching professional.

In these circumstances, the following going rates will apply:

Note that these going rates are based on a 40 hour working week (and must be prorated for other working patterns). This is distinct to the standard going rates, which are now based on a 37.5 hour working week.

This arrangement will be helpful for those in the above occupation codes, where employers are unable to raise wages in line with the going rate.

Case study: Xavier is a Seismologist. He entered the UK as a Tier 2 (General) migrant in November 2020. He has a new job lined up and would like to apply to change his employer. His new job will be in the same occupation code. The relevant going rate is therefore £23,200 because Physical Scientists are on the Shortage Occupation List, and he meets the requirements for reliance on the third transitional arrangement. However, Xavier does not meet the criteria for the second transitional arrangement because his certificate of sponsorship was not assigned before 24 November 2016. He must therefore be paid the current general salary of £26,200 rather than the going rate, because it is the higher amount.

Hourly Rate Requirement

Under the forth transitional arrangement, it is possible for those originally granted permission as Skilled Workers to disregard the £10.75 hourly rate requirement where the following conditions are met:

• The applicant originally applied for permission before 06 April 2021;
• They have had continuous permission as a Skilled Worker since this application was granted.

This arrangement assists the relatively small group of Skilled Workers who originally applied before the hourly rate requirement was introduced.

Case study: Leila applied for permission as a Skilled Worker in January 2021, to work as a sheet metal worker. Her hourly rate is £10.65 for a 37.5 hour week. She has held permission in this category and occupation code ever since. On 12 April 2023, the hourly rate increased to £10.75 for a 37.5 hour week. Her employer does not want to increase her salary when she extends her visa later this year. Leila can rely on the forth transitional arrangement, and so her lower hourly rate will not impact her application.

For a wider explanation of the salary rules beyond the transitional arrangements, my colleague's blog posts on salary rates and recent increases to the salary rates for Skilled Workers will assist.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.