Raising The Bar: New UK Immigration Rules Increase Salary Thresholds For Sponsored Workers

New Immigration Rules came into force in the UK on 4 April 2024 which affect employers who sponsor workers under the Skilled worker or Global Business Mobility: Senior or Specialist Worker routes.

Skilled Worker changes

Broadly, the main changes are:

• The minimum salary threshold for this route has been increased from £26,200 to £38,700 per year;
• The way that the minimum occupation-related going rate salaries are calculated has been amended.  Instead of being calculated by reference to the 25th percentile of all wage earners in a particular occupation, it is now being calculated by reference to the 50th percentile (median) of all wage earners in a particular occupation.  This means that those being sponsored under the Skilled Worker route will now need to be paid an annual salary of more than either £38,700 or the bottom fifty per cent of all those working in the relevant occupation, whichever is the higher;
• The Standard Occupational Classification (“SOC”) codes used for determining whether a role meets the required skills threshold and the salary that must be paid to someone being sponsored to work in an occupation covered by that code have been updated to SOC 2020 from SOC 2010.  Transitional provisions have been put in place to enable individuals who are currently sponsored under the deleted occupation codes to be able to extend or apply for indefinite leave to remain (“ILR”) in the UK;
• The Shortage Occupation List (“SOL”)  has been replaced by a new Immigration Salary List (“ISL”).  This is significant as there are currently fewer jobs on the ISL than were included on the SOL;
• The supplementary employment provisions have been liberalised.  Skilled Workers are now permitted to undertake supplementary employment in any occupation that is eligible under the Skilled Worker route.

Transitional arrangements

Where an individual is sponsored under a Certificate of Sponsorship (“CoS”) assigned before 4 April 2024, they will continue to be able to benefit from a minimum salary threshold and going rate salaries calculated by reference to the 25th percentile while they continue to remain in the UK under the Skilled Worker category.  However, in order to take account of inflation since the original thresholds were implemented, the minimum salary threshold is being raised to £29,000, which will apply when a CoS is assigned to these individuals on or after 4 April 2024. The minimum occupation-related going rate salaries are also being adjusted in line with the most recent salary data, which has resulted in a significant increase in the salary levels. Again, these will apply where an individual who currently has immigration permission to remain in the UK on the basis of a Skilled Worker CoS assigned before 4 April is then issued with a new CoS after this date.

It is important to note that these changes will only apply to Skilled Workers when they come to submit applications to extend their stay or change employment in the UK, or apply for ILR.  Furthermore, those in the UK under the Skilled Worker category will only be able to rely on salaries calculated by reference to the 25th percentile if their applications are submitted before 3 April 2030.  All those applying under the Skilled Worker category after this date will have to comply with the new, 50th percentile, salary requirements.

Global Business Mobility: Senior or Specialist Worker changes

Broadly, the main changes are:

• The minimum salary threshold for this route has been adjusted for inflation and has therefore increased from £45,800 to £48,500 per year;
• The minimum occupation-related going rate salaries will continue to be calculated with reference to the 25th percentile, again adjusted in line with the most recent salary data.

The High Earner threshold has been maintained at £73,900

Transitional provisions will apply to those already in the UK under the Senior or Specialist Worker category, or who make their initial applications on the basis of a CoS assigned before 4 April 2024, provided the application is made before 3 April 2030. These work in a similar way to the transitional provisions for the Skilled Worker route, including allowing individuals in the deleted occupation codes to be able to extend their stay in the UK.

What this means for UK employers

Immigration considerations

In the short term, UK employers do not need to take any action in relation to their workers who are currently sponsored under the Skilled Worker or Senior or Specialist Worker routes. For those UK employers sponsoring individuals under the Senior or Specialist Worker route, they simply need to be aware that the minimum salary thresholds for this category have been increased in line with inflation.

However, in the medium term to long term, UK employers will need to ensure that, where they are looking to extend the stay of a current sponsored worker, to sponsor a worker who is already in the UK under the Skilled Worker category or to assist a Skilled Worker with their application for ILR, they take into account the inflation-adjusted minimum salaries.

Where UK employers are looking to employ migrant workers who are being sponsored under the Skilled Worker category for the first time, they will need to ensure that the salaries that they are offering meet the significantly higher minimum salary thresholds for the Skilled Worker category.

Employment considerations

Employers should also ensure that, if they do sponsor a worker under the Skilled Worker category on the basis of these new salary thresholds, this does not inadvertently lead to discrimination issues caused by a sponsored worker being paid more than a local worker.

This is because, if the only reason a local worker is paid less is due to the fact that they are not a sponsored worker subject to the minimum salary thresholds, the local worker could bring a claim in the Employment Tribunal for direct race discrimination.  Whilst it is not possible to defend a direct discrimination claim on the basis of "objective justification", employers may be able to succeed in defeating any such claim on the basis that the difference in treatment is due to the requirements of the UK Immigration Rules and not due to a specific race or nationality. It remains to be seen whether an Employment Tribunal would accept that argument.

There is also the potential for equal pay issues to arise if employees of different genders are paid different salaries for the same work, although we believe that such a claim could be defended in this scenario if the only reason for the difference was compliance with the UK Immigration Rules.

In reverse, if an employer decides not to hire someone because they require a sponsor licence and would need to be paid more than the local workforce, this would create a discrimination issue without an obvious defence.