Home » UK employers race for staff visas ahead of new immigration rules

UK employers race for staff visas ahead of new immigration rules

UK employers are racing to submit visa applications for skilled staff ahead of changes by Rishi Sunak’s government to immigration rules that will sharply increase the costs of hiring overseas.

Immigration lawyers said some clients were already withdrawing job offers because they would need to pay much higher salaries to people recruited on skilled worker visas from April. This is on top of a big increase that took effect this week in the fees charged for overseas staff to use the NHS.

Other companies have brought forward hiring plans and renewed visas for existing employees ahead of time, in an effort to secure their status before costs rise. At the same time, the Home Office is stepping up scrutiny of employers in a clampdown on visa fraud and labour abuses.

Lawyers said the changes — part of government reforms aimed at cutting inward migration by 300,000 a year ahead of the next election — had resulted in a logjam of applications and a daily fight to secure the few slots on offer for fast-track processing.

“There is a last-minute rush to get in under the wire,” said Nicolas Rollason, head of business immigration at law firm Kingsley Napley.

The Home Office said it did not recognise claims of delays, adding: “All applications for certificates of sponsorship, which meet government requirements, are fulfilled within our published service timelines.”

But Chetal Patel, head of immigration at Bates Wells, said employers were “panicking” as time ran out to hire on current salaries, and writing clauses into contracts so they could claw back visa fees if recruits left jobs early.

Uncertainty over the details of the new rules has heightened businesses’ concerns. In December, home secretary James Cleverly said the main salary floor for skilled worker visas would rise from £26,200 to £38,700 from April.

The increase could price out employers in sectors such as hospitality and manufacturing who use the system to fill roles ranging from chefs to welders.

“We are seeing an impact. People are losing jobs,” said Ben Sheldrick, managing partner at Magrath Sheldrick. He cited one client who had dropped plans to hire a specialist jeweller from India, and others who were rethinking graduate recruitment.

But in many higher-paid professions, the salary threshold specific to a worker’s role will rise even more sharply. At present, the Home Office publishes a “going rate” for each occupation eligible for skilled visas, set at the 25th percentile of the UK earnings distribution.

Employers must match this going rate if it is higher than the £26,200 floor. The Home Office now plans to bring salaries in line with median full-time earnings for each occupation “to deter employers from over-relying on migration”.

It is also reviewing a “shortage occupation list” of roles where employers are allowed to pay 20 per cent less than the usual going rate, which will be rebadged as an “immigration salary list”.

Lawyers said in many cases the new rules would in effect restrict the visa system to high-paying London firms and senior staff, at the expense of regional businesses, start-ups and recent graduates.

Naomi Hanrahan-Soar, partner at Lewis Silkin, cited a recruiter in Northern Ireland struggling to fill more than 100 engineering roles. “These are on big projects but, because they are regional, they simply do not meet the new salary threshold,” she said.

A rise of more than 40 per cent in the salary floor for programmers would be “problematic” for tech start-ups in a tougher fundraising environment, Rollason said. “If they try to extend the [funding] runway by reducing salaries for someone with equity in the business . . . they will have little flexibility.”

The changes also create an acute dilemma for professional services firms, which recruit large numbers of international students from UK universities.

Overseas students can work in Britain on a graduate visa for two years and on a salary 20 per cent below the usual minimum for skilled worker visas until the age of 26. But even if the Home Office maintains this discount, employers would in future have to pay them much more than British counterparts after a few years in the job.

This is a problem even in sectors such as accountancy and consulting, where starting salaries at smaller companies fall far short of the eye-watering sums on offer at the top global players.  

But it could change the face of professions such as architecture, where London-based practices have traditionally drawn recruits from all over the world while selling services in international markets.

“It will be a car crash,” said Stephen Drew, a recruiter and founder of job website Architecture Social.

An architectural assistant who had studied for five years, but was not yet qualified, could earn about £30,000 in London — above the current going rate for a visa, but well below the likely new level. Even experienced architects often come to the UK on low salaries initially while gaining local accreditation, Drew said.

Karen Phillips, human resources director at Building Design Partnership, a London-based practice with 10 studios worldwide, said the cosmopolitan nature of the workforce brought “diversity of thought in design”, as well as language and technical skills.

Oliver Lowrie, co-founder of practice Ackroyd Lowrie, which hired two architects on skilled visas last year, questioned the merits of a policy that — on Home Office estimates — will cut net migration by just 15,000 annually.

This will barely dent overall net migration, which totalled 672,000 in the year to June. But it is equivalent to almost a quarter of the skilled worker visas issued in the last year outside the health and care sectors.  

“London is one of the design capitals of the world . . . we’re a magnet for talent,” Lowrie said. “We export skills, the top practices make a third of their revenues overseas. The current ecosystem is good — there’s no point cutting the legs off.”