UK Enterprise Immigration: Expert Employee visa wage hike on 4 April 2024 – what employers must know

The Dwelling Workplace introduced quite a few immigration-related modifications in December 2023, together with a major improve in minimal wage thresholds for Expert Employee visas.  The finer element, within the type of new Immigration Guidelines, shall be revealed on 14 March with many of the modifications coming into impact on 4 April 2024. Within the meantime, that is what employers ought to plan for within the lead as much as ‘massive-hike’ day:

Improve in going fee wage thresholds for particular person occupations

Consideration has largely been centered on the rise within the common wage threshold for Expert Employee visas from £26,200 (based mostly on the 25^th percentile beneath ONS Annual Survey of Hours and Earnings (ASHE) information from 2021 to £38,700 (based mostly on the 50^th percentile beneath ONS ASHE information from 2023). Nevertheless, on the identical time, the going fee wage thresholds for particular person occupations (excluding Well being and Care employee roles) will even improve from the 25^th percentile to the 50^th percentile to match median full-time wage information for equal jobs in 2023. In consequence, relying on the function, the minimal wage payable for a Expert Employee visa could also be considerably larger than £38,700. On the identical time, the Dwelling Workplace mentioned will probably be changing from the SOC 2010 to SOC 2020 occupational coding system from April 2024 so as to have the ability to replace the going wage charges for occupations to the most recent information.

For instance, the occupation code for Programmers and Software program Improvement Professionals (SOC 2010 code 2136) at the moment specifies a minimal wage of £34,000 (decreased to £27,200 as a result of it’s on the Scarcity Occupation Record).  The estimated 50^th percentile fee for a similar occupation code is £49,430 (SOC 2020 code 2134) (based mostly on provisional ONS ASHE 2023 information discovered right here), which signifies that anybody making use of beneath the Expert Employee route for one of these function on or after 4 April will have to be paid within the area of £49,430 each year except they’re lined by a transitional association.

Transitional preparations

The Dwelling Workplace has mentioned that these already sponsored beneath the Expert Employee route earlier than the brand new Immigration Guidelines come into pressure on 4 April needs to be exempt from the elevated thresholds.  This could imply that current sponsored staff beneath the Expert Employee route can proceed to be sponsored on the present 25^th percentile wage threshold (or above) even when they should apply to vary their function or sponsor, prolong their permission to remain or apply for indefinite depart to stay within the UK on or after 4 April. Their wage charges are, nonetheless, more likely to improve on the identical fee as resident staff so they are going to subsequently be topic to the up to date twenty fifth percentile fee (normally a comparatively modest improve) utilizing the most recent pay information (ASHE 2023) after they subsequent make a Expert Employee visa software (that is according to present observe).

New Immigration Wage Record (ISL)

The Migration Advisory Committee (MAC) has revealed its fast evaluate of suggestions to the Dwelling Workplace on occupations to be included in an interim ISL which is because of exchange the Scarcity Occupation Record from 4 April. The headlines from that evaluate are: 

• Solely 21 occupations eligible beneath the Expert Employee route have been really helpful for inclusion on the ISL, which signifies that quite a few roles on the present Scarcity Occupation Record (varied engineering and IT occupations in addition to vets, architects and actuaries) won’t be included and can subsequently not be eligible for wage threshold reductions or decreased software charges. The roles really helpful for inclusion on the brand new ISL are so restricted that it’s unlikely to be of curiosity to most companies exterior the development and healthcare sectors. The total listing of suggest occupations could be discovered right here.

• If a task is included on the ISL, then moderately than the earlier 20% low cost utilized to the going fee wage threshold, the minimal wage payable for Expert Employee sponsorship shall be £30,960 (apart from Well being and Care Employee roles which can have a decrease threshold at £23,200) or the going fee for that function (to be renamed the “occupation-specific threshold”), whichever is larger.

• If a task is just not on the ISL, the minimal wage payable for Expert Employee sponsorship is £38,700 (£29,000 for Well being and Care employee roles) or the occupation-specific threshold for the function being sponsored, whichever is larger.

• Because the occupation-specific thresholds are growing from the 25^th percentile to the 50^th percentile (excluding Well being and Care Employee roles which stay on the 25^th percentile), the MAC has really helpful excluding from the ISL all roles the place the occupation-specific threshold shall be above the final wage threshold of £38,700 (as these roles should nonetheless meet the occupation-specific threshold, even when included the ISL). For instance, electrical engineers (SOC 2020 code 2123) are on the Scarcity Occupation Record and subsequently have a reduced going fee threshold of £31,440 (25^th percentile). Nevertheless, the rise to the 50^th percentile signifies that their occupation-specific threshold shall be not less than £53,500 (based mostly on ASHE 2023 information). As £53,500 is larger than the brand new common wage threshold of £38,700 (and being included on the ISL not supplies a reduction in opposition to the occupation-specific threshold), there isn’t any profit to electrical engineers (or equally paid roles) being included on the ISL.

• The brand new common wage threshold will imply that the Expert Employee route turns into unavailable for a lot of occupations, notably these on the RQF 3 to five stage, as a result of even the ISL-reduced threshold of £30,960 shall be above the salaries paid for the overwhelming majority of staff in that occupation.  By means of instance, veterinary nurses (SOC 2020 code 3240), have a median wage of £24,400 however even when that function have been to be positioned on the ISL, the ISL-reduced threshold to sponsor that function would nonetheless be £30,960, and so typically the function wouldn’t qualify for sponsorship.

• In maybe the one piece of optimistic information, the MAC has really helpful that asylum seekers who’ve been granted permission to work ought to now be allowed to work in any job eligible beneath the Expert Employee route moderately than being restricted to roles on the present Scarcity Occupation Record. This may give employers a barely bigger pool of candidates to select from given the recruitment challenges which might be more likely to observe the wage threshold will increase beneath the Expert Employee route.

• The MAC continues to make no suggestions for wage reductions for employers within the areas or exterior London.  These employers are subsequently more likely to be hit hardest by the wage threshold will increase if they’re depending on sponsoring non-British/Irish staff to fill labour shortages within the UK.

We might want to wait till the brand new Immigration Guidelines are revealed on 14 March to see if the Dwelling Workplace adopts the MAC’s suggestions (though it normally does). The MAC has mentioned that the interim ISL shall be changed following a fuller evaluate later in 2024, as a part of which it intends to hold out intensive stakeholder session, together with a name for proof, stakeholder roundtables, and a renewed evaluation of labour market circumstances in opposition to the brand new wage thresholds.

New entrant decreased wage fee

Below the present Immigration Guidelines, these beneath the age of 26 or holding Graduate or Pupil visas (amongst others) on the time of their Expert Employee visa software can profit from a considerably decrease wage fee of £20,960 or 70% of the going fee within the related occupational code, whichever is larger. The MAC evaluate seems to substantiate the Dwelling Workplace’s earlier intention to keep up a brand new entrant wage low cost for these in the beginning of their careers however we don’t but know whether or not the extent of low cost shall be of any sensible profit or whether or not it’s going to apply to the brand new common wage threshold (£38,700) or the (typically larger) occupation-specific threshold.  In any occasion, even when a decrease new entrant fee can be utilized for Expert Employee visa functions on or after 4 April, it will probably solely be relied upon for a restricted interval (as much as two years within the case of these switching from the Graduate visa route). After that interval, the upper wage charges in place from 4 April will apply to any prolonged interval of sponsorship with out the advantage of any transitional association. Employers ought to nonetheless subsequently think about sponsoring eligible staff in the beginning of their careers (notably these at the moment on Graduate and Pupil visas) beneath the Expert Employee route earlier than 4 April, the place doable.

Planning forward for these switching into the Expert Employee route:

Employers ought to assess the immigration standing and salaries of present staff and any candidates on non-Expert Employee visas (for instance Graduate, Youth Mobility, Pupil, Dependant, Partner/Associate or Ukraine Scheme visas) as quickly as doable.  If there’s a want for these people to modify into the Expert Employee route at any level (even when their present visa expiries are usually not imminent) and they are going to be employed on medium to decrease vary salaries, it’s extremely doubtless that they won’t qualify for sponsorship beneath the deliberate larger wage thresholds and employers ought to subsequently think about whether or not they are often sponsored beneath the Expert Employee route earlier than 4  April. If their functions are submitted earlier than 4 April, it’s going to additionally imply that future extensions of their visas will solely want to fulfill the decrease wage thresholds beneath the present Immigration Guidelines.

Any employers trying to sponsor staff or candidates earlier than 4 April from inside the UK ought to urgently evaluate their Certificates of Sponsorship in-country allocations.  If a request for an additional allocation is required, this will take a while to course of and demand for the restricted precedence service slots to expedite such requests is larger than ever.

The impression of those modifications is wide-ranging – for those who want help or have any questions referring to UK visa functions, Certificates of Sponsorship allocation requests or different enterprise immigration issues, please contact your typical Squire Patton Boggs enterprise immigration group member or Annabel Mace, associate and Head of UK Immigration. As well as, please register for our webinar UK Enterprise Immigration – What’s in Retailer for 2024? on 20 March at 12:30 p.m. GMT after we will cowl all related UK immigration modifications within the pipeline together with the up to date Immigration Guidelines being revealed on 14 March 2024.