By Gurjit Pall, immigration solicitor, Thorntons (www.thorntons-law.co.uk)
With a general election looming, the UK Government has embarked on a host of changes to the immigration system that will have far-reaching implications for employees and employers alike.
One of the most controversial proposals is plans to increase the minimum salary threshold on 4 April 2024 for Skilled Worker visas from £26,200 to £38,700 per annum.
When implemented, it will have an especially detrimental effect on the hospitality sector which continues to struggle with Brexit and the ongoing challenges posed by the COVID-19 pandemic. According to the Office for National Statistics, there were 112,000 vacancies in the hospitality sector at the end of 2023.
Known for its diverse workforce, the hospitality sector attracts professionals from around the world, contributing to its vibrancy.
Currently, employers in the hospitality sector who hold a valid UK sponsor licence can sponsor international workers in many roles, for example as a chef or bar manager, under the Skilled Worker visa route at the minimum salary rate of £26,200 gross per annum.
From spring, however, employers will have to pay sponsored workers in these roles a minimum salary of at least £38,700 gross per annum – an increase of nearly 50% – to meet the requirements. As part of the transitional arrangements, the UK government has confirmed that where a sponsored worker is currently on the Skilled Worker visa route or applies before these changes come into effect, they will be able to rely on the current visa rules. These arrangements offer businesses one last opportunity to benefit from the current salary requirements by assigning a Certificate of Sponsorship to a worker on or before 3 April 2024 and the sponsored worker would have up to three months to submit a visa application.
Over the longer term, the elevated salary requirement for the Skilled Worker visa route will make it more challenging for businesses, particularly smaller ones, to attract and retain a skilled workforce. It may also have a disproportionate impact on businesses in more remote locations, such as those in the Highlands, which will struggle to keep pace with more metropolitan businesses where salaries are greater to mitigate against the higher cost of living.
The repercussions of Brexit, the lingering impact of the COVID-19 pandemic, and economic uncertainties are already causing closures across the UK, with more than 6,000 pubs, clubs and restaurants shutting their doors last year.
The plans to increase the salary minimum threshold for Skilled Workers will be a further bitter blow, particularly following recent changes to international student visas. Since 1 January 2024, international students are no longer permitted to sponsor family members to the UK – unless they are studying on a postgraduate research course or a course with government-funded scholarships. With student family members permitted to work full-time hours in the UK, restrictions on their numbers will ultimately reduce the talent pool for employers.
UK hospitality employers concerned about the effect of immigration changes should reconsider their hiring plans and speak to their advisers. Acting now could avoid the expected increase in operational costs around sponsoring international workers and provide certainty at a time when the sector needs it most.
