How major changes in the UK immigration system will impact businesses

If you are in an organisation that employs overseas workers 2024 will be a year of change for you. In December last year the British government announced a raft of measures designed to reduce net migration. These were introduced following the release of data showing that net migration reached record levels of 745,000 in 2023 and a subsequent Conservative Party commitment to bring this down.

While numerical targets have been abandoned, the phrase is often used to describe the desired outcome of reducing numbers to ‘manageable levels’. Net migration was unusually high in 2022 and 2023, primarily because of an increase in international student numbers, high demand for workers in the health and care sector and one-off schemes for Ukrainians and the establishment of a route for Hong Kong British National Overseas status holders.

Still, with a general election looming and immigration remaining a key issue for many voters, the government is pushing ahead with measures designed to restrict the flow of foreign students, workers and their dependants coming to Britain. Below is an explanation of those measures that will impact employers the most.

Skilled worker visa minimum salary threshold

Currently, to meet the criteria to qualify for a general skilled worker visa most applicants must be paid a minimum of £26,200 a year (the threshold does not apply to health and care workers). In spring this year that figure is set to increase significantly, to £38,700. This will, in effect, price many employers out of the international recruitment market because the new threshold is higher than the average salary for full-time employees.

It is estimated that the new threshold will only affect around 30 per cent of skilled worker visa applicants as it does not apply to care workers and senior care workers, while those in health or teaching roles have salaries set using nationally agreed pay scales.

Shortage occupation list

The shortage occupation list (SOL) identifies jobs deemed essential for the nation’s economic and social wellbeing, in which labour shortages persist. Migrants can take up these roles earning lower wages than the general skilled worker salary threshold – on average, 20 per cent less. A person applying for a job included on the SOL benefits from reduced visa application fees and a streamlined process, while the employer benefits by being able to pay less than the average salary for the position.

There have been long-standing concerns that this system encourages British businesses to rely on cheaper overseas labour and leads to exploitation of workers. Around 700 cases of modern slavery have been identified in the care sector, for example, and many of the victims were able to come to the UK to work in SOL roles.

For these reasons fundamental changes are due. The SOL will be renamed the immigration salary list and the independent Migration Advisory Committee (MAC), which advises the government on immigration policy, will advise on which job roles remain on the list.

The 20 per cent salary discount is also expected to be scrapped. This, in effect, increases payroll costs for these positions by up to one fifth. The new list is expected from late spring.

Family dependants of health and social care visa holders

In the year to September 2023, Britain issued visas to 101,000 care workers and senior care workers and to 120,000 dependants accompanying them, about a quarter of whom were in work. In December 2023 British home secretary James Cleverly announced that care workers would no longer be able to bring dependants with them.

Consequently, from spring 2024, people arriving in the UK to work as social care workers are no longer permitted to bring children or a partner with them. For care providers, this will likely limit the pool of available talent, as those with families will be less likely to apply for roles.

Care Quality Commission registration

Any care providers in England must be regulated by the Care Quality Commission if they wish to sponsor workers undertaking any activity. It remains unclear whether care providers in Scotland, Wales and Northern Ireland will need to be regulated by their equivalent bodies to do the same.

Graduate visa route

On 1 July 2021, the UK government launched the graduate visa route to allow international students on a student visa to remain living and working in the UK after they graduate. The visa, designed to encourage ‘the brightest and best’ international students and their dependants to stay in the UK, allowed the holder flexibility as they could work in any role without sponsorship or a salary threshold.

Recent analysis by Neil O’Brien, Conservative MP and former health and social care minister, suggests graduate visa holders are taking low-paid gig economy jobs not ­only to recoup the fees paid to study in Britain, but to earn enough over the two-year period of the visa to send ­remittances home and then to manipulate the system to move to other jobs and eventually apply for permanent residence.

Considering these concerns, the government has asked MAC to review the graduate visa “to ensure it works in the best interests of the UK and to take steps to prevent abuse”. The review will run until late 2024 and its outcome could have a significant effect on employers who use the route for hiring.

Immigration health surcharge rise

The immigration health surcharge is a fee paid by skilled worker visa holders. From 6 February it increased by more than 60 per cent from £624 per year to £1,035 per year. For children, the rate rose from £470 to £776 per year.

Increases to civil penalties for illegal working

Last year the Home Office launched a crackdown on undocumented workers, which included a 50 per cent rise in the number of immigration raids on businesses. From this month, fines on those found to be employing undocumented workers will triple from £15,000 to £45,000 for a first offence and from £20,000 to £60,000 per breach for repeat offenders.

The onus is firmly on businesses to ensure their workers have the correct documentation. Ignorance is not a defence. Fines will be issued even if the employer claims to have been hoodwinked by fake documents and dishonest declarations.

2024 will be a year of change for any business that employs overseas workers and the list of changes given here are unlikely to be the last. Expect more measures to be introduced and keep abreast of industry and legal news to make sure you stay on track.

Yash Dubal is director of A Y & J Solicitors

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