Waves of Change: A Guide to the Latest UK Immigration Law
The UK government unveiled plans to reduce net migration in December of last year, a pivotal component of the new Immigration – Legal Migration and Border Strategy.
In this ever-evolving domain of immigration law, businesses must stay well-informed to adapt effectively, especially in uncertain times. Having the most up-to-date information is crucial for businesses to adequately prepare for potential changes in the immigration landscape.
This article provides a summary of the imminent shifts and upcoming developments in immigration law set to unfold in 2024. This article will highlight the implications for employers and provide tips and advice to be compliant.
Introduction
The UK has witnessed unprecedented levels of immigration since the onset of the pandemic. According to the latest official estimates, net migration for the year ending in June 2023 reached 672,000—an increase compared to pre-pandemic volumes. In December 2023, the UK government made a series of announcements aimed at lowering immigration, introducing the Legal Migration and Border Strategy – a five-point plan designed to reduce net migration.
In navigating the uncertainties of the current times, it is imperative for businesses not only to stay informed but also to grasp the imminent changes. This is particularly crucial for those currently employing or planning to recruit workers from outside the UK.
Changes in Immigration Law
Increase in Immigration Health Surcharge
Introduced in 2015, the Immigration Health Surcharge (IHS) serves the purpose of ensuring migrants contribute to the costs of healthcare provided by the NHS. As of February 6, this year, the fee has seen a significant 66% increase:
For adults, the fee for each year the individual holds their visa increased from £624 to £1,035
Students, student dependants or leave to remain under the Youth Mobility Scheme and children under the age of 18, now see a IHS fee escalation from £470 to £776 for each year the individual holds the visa.
While the IHS is an annual cost for each year the visa is held, it is a mandatory fee payable at the point of application and the entire amount is expected to be paid upfront as a lump sum alongside other visa fees.. This upfront payment could pose a potential barrier for individuals if employers do not cover the cost. To address this, employers might contemplate establishing arrangements for employees to repay the HIS over a defined period, allowing the business to recover sponsorship costs throughout the employee’s tenure. This approach may also involve implementing clawback arrangements safeguarding the business in the event of the employee’s early departure. Notably, Health and Care workers are exempt from these fees.
Skilled worker minimum salary increase
The salary threshold for skilled worker visa applications is set to rise by almost 50%, surging from £26,200 to £38,700. This increase will be effective from 4 April 2024. Sponsors must adhere to the going rate for the job if it surpasses the new minimum threshold.
Health and care workers including doctors, nurses, care workers and those on national pay scales (e.g. teachers), will remain unaffected by this salary threshold increase. While this change aims at maintaining wage parity, this change presents challenges for businesses. Particularly businesses that are heavily reliant on sponsoring low-paid skilled workers.
The 30% lower minimum salary requirement remains intact for individuals aged 26 and under, as well as post-doctoral researchers. Initially, uncertainties surrounded the transitional arrangements for existing Skilled Worker visa holders. However, recent updates confirm that the £38,700 salary threshold, set to take effect on April 4, 2024, will not apply to those already holding a Skilled Worker visa or those who have applied for one by the stipulated date. This clarity offers reassurance to individuals currently in the skilled worker visa category.
Skilled Worker Visa: scrapping of the Shortage Occupation List
This list comprises roles identified by the UK Government to be in short supply within the domestic labour market. Qualifying roles presently benefit from a 20% salary discount to the going rate for a Skilled Worker visa. However, come April 4th, this list and the 20% salary discount for shortage occupations will end. Instead, it will be replaced by the Immigration Salary List with a noticeable reduction in the number of qualifying roles. Employers relying on the 20% salary discount for roles on the Shortage Occupation List will face increased costs as this discount is set to be removed.
The Migration Advisory Committee will advise on which job roles will remain on the list to benefit from a lower salary threshold. Employers may face challenges in recruiting talent for certain positions. Understanding the new criteria and salary structures will be crucial. Affected employers should also reassess their workforce planning and recruitment strategies based on the updated list.
The reduction in the number of roles on the Immigration Salary List may lead to gaps in the workforce for certain industries. Employers should proactively address these gaps by exploring alternative recruitment strategies or upskilling existing staff.
Right-to-work penalties
Employers are required to perform right-to-work checks on their employees for many years. Failing to do so, may face a civil penalty if they are employing illegal workers. Penalties for employing an illegal worker have tripled since 13 February 2024. The maximum civil penalty increased from £20,000 to £60,000 and the starting point for the first breach has increased from £15,000 to £45,000. These significant increases make it more important than ever to have strong processes in place. It is important for employers to familiarise themselves with the updated code of practice on preventing illegal working.
Family applications – Increased minimum income
The current minimum salary threshold for a family visa is £18,600. This is set to rise to £38,700. The increase will be implemented gradually starting with an initial rise to £29,000 on April 11, 2024. A further increment to £34,500 will follow later this year and ultimately reach £38,700 in early 2025. It has been confirmed the new thresholds will not apply to those already in the UK on a family visa when the rules change. However, the phased nature of this increase introduces financial pressure to employees seeking to bring family members to the UK.
Employers should be aware of these personal challenges, as they may affect employee well-being and work performance.
Employers should be proactive in communicating these changes to affected employees and offering support. This may include providing information on legal resources, assistance with visa application, or counselling services to address any concerns. Employers may also need to revisit their employee benefits packages to ensure they are competitive and considerate of the increased financial requirements for family sponsorship. This could involve exploring additional benefits or allowances to support affected employees.
Youth Mobility visa
The YMS allows young adults from 18 years of age from participating countries to experience life in the UK for a limited period. Since 31 January 2024, Andorra and Uruguay also now participate in the scheme. This adds to existing participating countries which are Australia, Canada, Iceland, India, Japan, New Zealand, Taiwan, South Korea, Hong Kong and Monaco. The age limit for nationals of Australia, Canada and South Korea applying to come to the UK under this scheme will increase from 30 to 35 years in line with nationals of New Zealand.
Employers may take advantage of this expansion as individuals on a YMS have unrestricted work conditions. However, they cannot work as a professional sportsperson or undertake certain types of self-employment. Unlike Skilled Workers, they do not require visa sponsorship.
What employers should be doing now
Employers should anticipate heightened recruitment costs and factor these increases into their budgets when seeking talent outside of the UK. Businesses also need to ensure they have a consistent approach to what visa costs the business will cover on behalf of workers. Businesses may want to limit their risk and consider implementing clawback agreements which require the worker to repay a portion of the visa costs if they leave employment within a set period after visa approval.
The substantial increase in civil penalties for employers is a stern move by the Home Office against illegal working in the UK, which could prove financially crippling for many SME employers. To minimise risks, employers should ensure they have established robust systems, conduct regular internal audits of their right-to-work records, and assess related HR procedures and systems.
Sources:
Update on Skill Worker minimum salary increase
Right to work penalties are set to triple in February 2024
Is the end of the shortage occupation list
UK government announces new measures to cut migration
Reducing Net Migration Factsheet – February 2024
Five-point plan to cut UK immigration raises fears of more NHS staff shortages
Changes to legal migration rules for family and work visas in 2024