UK: The Government's Five-Point Plan To Reduce Net Migration

What is the Government's five-point plan to reduce net migration, and how will it affect your ability to employ/sponsor migrant workers?

On 4 December 2023 the UK Home Office announced several radical changes to the immigration rules on legal migration which are likely to have significant implications for UK employers engaged in sponsoring migrant workers. The Skilled Worker route in particular has been targeted with a view to reducing the number of migrants coming to the UK from spring 2024.

While the full details on these changes (including the precise date on which they will come into force) are yet to be confirmed, here we look behind the headlines and consider what the changes will mean for employers, and how employers could make best use of the time between now and spring 2024 to benefit from the existing regime while it lasts.

Key Reforms in Brief

Jump in the Skilled Worker 'General Salary Threshold'

This minimum earnings requirement (which cannot be reduced pro-rata for part time working) will increase by nearly 50% from the current £26,200, to £38,700. We anticipate that this will result in the 'going rate' for a role regularly being exceeded by the 'general salary threshold', whereas at present it is more commonly the other way around. The Home Office has indicated that the discount for 'new entrants' (current minimum salary threshold is £20,960 per year) will continue to exist. However, it is not entirely clear whether it will continue to reduce the requirement to 70% (such that it would be £27,090 under the new rules). The new entrant rate is typically available to workers aged 26 or under at the date of their visa application, those switching from a Student route visa on completion of their course, and those switching from a Graduate route visa, as well as some other limited circumstances. It should also be noted that migrant workers can only benefit from the new entrant discount for a maximum of four years (not long enough of itself for them to become potentially eligible for settlement, in a standard case).

Overhauling the Shortage Occupation List

At present, roles that appear on the Shortage Occupations List also benefit from a discount to minimum pay requirements. This is less generous than for 'new entrants' (see above) at 80%, and like the new entrant discount it applies to both the general salary threshold and the 'going rate' requirement. In their announcement, the Government has indicated an intention to abolish the Shortage Occupations List and replace it with an Immigration Salary List, which will contain job-specific salary thresholds for roles that are difficult to fill. The Migration Advisory Committee will be asked to compile the list of such roles. So we cannot be certain what the new pay requirements will be for those roles that remain classified as in short supply from Spring 2024, but we do know that the discount to 80% of usual pay requirements will end.

Health and Care Worker Visa Reforms

The Health and Care visa is a sub-category of a Skilled Worker visa aimed at staff working in the care sector (e.g. nurses and carers). The main advantages of this visa are that it is exempt from the Immigration Health Surcharge (currently £624 per year for adults, but rising to £1,035 from January 2024) and subject to a reduced visa processing fee.Jobs sponsored under the Health and Care route will be exempt from the jump in the general salary threshold; however, workers will no longer be able to bring their family members to the UK, and shortage occupations will also be impacted by headline 2 above in respect of the 80% rule ending. According to Home Office data, only 25% of such family members are currently employed in the UK, suggesting that the rest are a burden on the state. It remains to be seen whether this restriction could be bypassed by applying for a regular Skilled Worker visa instead of a Health and Care visa, but in many cases the minimum pay requirements and burden of the Immigration Health Surcharge may render that impossible.

Among other changes to this category, there is a new requirement for sponsors to be registered with the Care Quality Commission before they will be able to sponsor workers for a Health and Care visa. Most will already be registered, but for some employers this will be a big change and a significant oversight burden which might otherwise not apply.

Graduate Visa

This visa was introduced as part of a range of immigration measures to address the labour shortages caused by Brexit. One of its main goals was to ensure that the UK remained attractive to foreign students, many of whom sought certainty regarding their ability to work in the UK after completing their studies here.

Presently, the Graduate visa allows those who have successfully completed their course in the UK on a Student route visa to switch to a two-year or three-year Graduate visa, enabling unsponsored and largely unrestricted work in the UK. In most cases, the period provided by this visa enables holders to secure permanent employment in the UK and obtain sponsorship on the Skilled Worker route.

The current Government is now questioning the benefits of this route for the UK and will ask the Migration Advisory Committee to review it and propose measures to address abuse. Although this does not necessarily mean the route will be completely closed, as was the case with the Post-Study Work visa, various restrictions may be introduced to limit the number of graduates extending their stay in the UK using this avenue or indeed to restrict the ability to bring dependants.

Jump in minimum income requirement for family reunification

Spouses applying to come to the UK under the family route have had to demonstrate either a minimum annual income of £18,600, or savings of no less than £62,500, since the rules were introduced in 2012.

The minimum income threshold will be increasing to £38,700 a year. While there is no indication as to what (if anything) will happen the savings threshold, it is possible that it could rise to £112,750 if the current income-based formula is retained.

These changes will make a UK spouse/partner visa unattainable for many families. Even though there will still be provisions allowing for a spouse visa to be granted without the required level of income in exceptional circumstances, the threshold for this is very high, and the application process will certainly not be quick. The ultimate impact for employers may be a significant reduction in the numbers of spouse/partner visa holders available for unsponsored employment in the UK.

How will these changes apply to those already in the UK?

The good news is that these changes will have no retrospective application, as confirmed by the Home Office. This means that those migrants who are already in the UK or will have arrived in the UK before the changes are in force will be able to extend their visas in the same category under the rules as they are today. Notably though, this protection will not apply to switching immigration categories, for example, moving from a spouse visa to a Skilled Worker visa or vice versa. This means many would benefit from switching category earlier than planned, to avoid the new rules that will otherwise apply to them if they do so after Spring 2024.

What steps can employers take now?

Let's explore the potential steps in the same order as the changes outlined above:

- As the changes will not apply retrospectively, it is advisable for businesses to take a moment to think about any gaps in their workforce that may need to be filled with foreign workers, so that any recruitment decisions could be made sooner rather than later. Skilled Worker visa applications could then be made before the new rules come into force, to benefit from the current regime which is expected to continue to apply to these applicants until they attain indefinite leave to remain and no longer require a work visa at all.

- The same considerations apply to the Shortage Occupation roles. Current shortage roles may be reclassified such that they will no longer benefit from a reduced salary threshold. It may therefore be best to bring forward Skilled Worker visa applications for any roles/applications that are dependent on Shortage Occupation status and/or the current reduction in salary requirement that it affords.

- For those applying under the Health and Care category and those who are already in the UK on this visa, consideration should be given to making applications for family members to join them before spring 2024, as it is not clear whether dependants of those who came to the UK on the visa before the changes will still be permitted to join them after the changes take effect.Employers not registered with the CQC and who don't anticipate a longer term need to sponsor workers on this visa, should consider making their remaining visa sponsorships for new hires before spring 2024, so that they avoid delays and complications associated with seeking registration.

- It is an opportune moment to assess whether workers currently employed on a Graduate or Student route visa should transition to Skilled Worker sponsorship. Given the anticipated increase in the 'new entrant' salary threshold in spring 2024, it may be advisable to apply to switch any Students and Graduates to a Skilled Worker visa while the current lower salary threshold is still effective.

- While the Government has indicated that the changes will not have retrospective effect, there have been conflicting messages from government officials as to whether the new income threshold of £38,700 will apply if someone is extending a spouse visa that was granted under the old rules.

Subjecting applicants who have already established family life in the UK under the current rules to the increased income requirement could be challenged as amounting to a disproportionate interference with the right to family life. It remains to be seen whether such a challenge wll be

As with the other changes, however, if you do not hold a spouse visa already, it is advisable to consider making an application before spring 2024 if you are a foreign spouse of a British/Irish national, non-British national settled in the UK, or EEA national with Pre-settled or Settled Status under the EUSS (assuming your relationship began after 31 December 2020).

Note of caution

The Home Office is attuned to the fact that some sponsors may try to exploit this window of opportunity, and we are already seeing a tougher approach from the Home Office to the assessment of applications for Defined Certificates of Sponsorship. Notably, the Home Office is requesting detailed justification for the new sponsorships, as well as information about the existing sponsored workers; effectively using some sponsor's application for a Defined Certificate of Sponsorship as an opportunity to conduct a 'mini-audit', exposing unprepared businesses to potential compliance action if they are unable to satisfy the Home Office with their responses.

These reforms signal a concerted effort by the UK government to recalibrate immigration policies, meaning that businesses must swiftly adapt, adjusting recruitment strategies to account for these new more stringent immigration measures.

Strategic planning and prompt action now, to leverage opportunities under the existing rules within the available timeframe will be a key to success for many employers.

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.