The United Kingdom has announced elevated salary requirements for workers who want to enter the country under the Skilled Worker route starting April 4, 2014. As previously announced, the minimum salary requirement is set to soar from £26,200 to £38,700, accompanied by an increase in going rates.
A Ministerial Statement has now confirmed the exact date of implementation.
Home Secretary James Cleverly outlined the changes in the House of Commons in December, revealing that individuals seeking working visas must now earn £38,700, a substantial increase from the previous £26,000. Cleverly expressed the government's aim to decrease net annual immigration by 300,000 in the coming years, although a precise timetable was not provided.
The government also plans to abolish the 20% pay reduction that employers are permitted to provide employees on the list of shortage occupations.
Exemptions from the Salary Increase
The minimum salary threshold increase will not impact individuals already on the Skilled Worker route when the change takes effect. This exemption applies to those making new applications, such as changing employment, extending their stay, or applying for Indefinite Leave to Remain. The Health and Care visa route and roles covered by national pay scales, including teachers, will also not be subject to the salary hike.
Understanding Going Rates
All eligible Skilled Worker roles are categorized under specific 'occupation codes,' each assigned a minimum salary, known as the going rate. Currently based on the 25th percentile of the Office for National Statistics Annual Survey of Hours and Earnings (ASHE) 2021, pay must meet both the minimum salary threshold and the going rate for the role.
Upcoming Changes for New Arrivals
From April 4, 2024, new arrivals in the Skilled Worker route will see a notable change in going rates. The rates will escalate from the 25th percentile to the median (50th percentile) for each occupation code, using ASHE data from 2023 instead of 2021. This adjustment will result in a significant increase for numerous occupation codes. For existing Skilled Worker route applicants before April 4, 2024, the going rates will remain at the 25th percentile for each occupation code. However, they will be based on the latest ASHE 2023 data, leading to some increases but not as pronounced as for new arrivals.
Impact on Shortage Occupations
Certain occupations, currently enjoying a 20% reduction in salary thresholds, are outlined in the Shortage Occupation List. Under the proposed changes, this list will be rebranded as the Immigration Salary List (ISL). The 20% discount will be discontinued, and the Migration Advisory Committee (MAC) will review the list's composition in alignment with increased salary thresholds.
While there will still be a discount for jobs on the ISL, potentially reaching 80% of the new £38,700 threshold, the going rate in many cases may still surpass this threshold. As the Skilled Worker visa undergoes substantial changes, employers face uncertainties regarding the retention of the current new entrant rate, which provides a lower threshold and discounted going rates. This rate benefits graduates, individuals under 26, and young professionals like accountants and solicitors working towards professional registration.
