Podcast: Immigration changes in 2024 – how HR can prepare

Introduction

Robert Shore: Hello, and welcome to the XpertHR podcast. XpertHR is a comprehensive source of leading practice, employment law and benchmarking information for HR professionals, providing solutions and expertise for every HR role, challenge and opportunity. You can find us any time of the day or night at www.xperthr.co.uk.

My name is Robert Shore, and I am delighted to be welcoming back to our podcast today Louise Haycock, partner and immigration solicitor at law firm Fragomen, and a contributor for us here at XpertHR. [0:00:36.3]

Louise Haycock: Hi. Lovely to be back.

The state of immigration in the UK

Robert Shore: Louise, in a moment you’re going to be talking us through the latest immigration developments and issues affecting HR professionals, and let’s begin with a little retrospection. Tell us about UK immigration in 2023. [0:00:51.7]

Louise Haycock: Well, the big news at the end of the year were the net migration statistics that were published in November. And these showed record high figures of 745,000. There was a 54% rise in work visas but notably for the health and care sector there was a rise of 155%.

Now, as expected, there were fewer of these as granted on humanitarian grounds in the year ending September 2023. Of course, in 2022 we saw a huge number of people coming from Ukraine and Hong Kong and so on. Now, those figures attracted a lot of publicity. And what we saw was a quick reaction from the Government to stem the tide of public opinion. In early December there were a number of measures announced with a pure aim of cutting that net migration figure.

Robert Shore: Yes. But weren’t there already measures likely to impact the net migration figures? [0:01:43.8]

Louise Haycock: Well, you’re quite right. There was evidence that that figure was already in decline. Plus, from 1 January 2024 many students were no longer able to bring their dependents. Now, only those studying at PhD or doctorate level or a research-based higher degree can bring their partners or their children.

Now, the second factor which was already likely to reduce that net migration figure was the huge hike to the fees payable. Visa fees rose by between 15 and 20% in October 2023 and the health surcharge, which is paid on most applications per person per year, is expected to rise to £1,035 for most main applicants.

Now, although that cost can be passed onto the individual, many companies offer to cover it as part of their recruitment or mobility package, and for many it will just simply be unaffordable.

The UK system, of course, was already one of the most expensive in the world. So if you take the skilled worker category, which is the main visa type used by business to sponsor workers, a business can expect to pay £9,500 when they sponsored an individual for five years in January 2023. Now, if we look at that in February 2024, that figure is over £11,800 if there are no other discounts available. That’s a whopping 24% increase. And it’s likely that that’s going to impact the attractiveness or the viability of moving people to the UK, and that will have had a knock-on effect to the net migration figure anyway.

Additional Government measures to curb migration

Robert Shore: I see. That is quite a significant increase, isn’t it? So what other measures did the Government announce to curb net migration? [0:03:24.7]

Louise Haycock: So the Home Secretary announced a five-point plan in early December. We don’t have the full details as yet. But they include care workers no longer being able to bring their dependents. The salary threshold used to calculate whether or not somebody qualifies for a skilled worker visa will increase from £26,200 to £38,700 and the going rate will increase from the 25th percentile to the median. Those on health and care visas and some educational visas will be exempt.

The Migration Advisory Committee will also be tasked to putting together a salary discount list, which will ultimately replace the shortage occupation list. And they’ll also be asked to review the usage of the graduate route. Partners of British nationals, or those who are settled in the UK, will also need to meet a minimum income threshold of £38,700, albeit that that’s going to be introduced in stages.

So unquestionably, these measures are going to reduce net migration. But I guess the question remains, at what cost to business, and of course society as a whole?

Business impact

Robert Shore: Okay, so tell us about that then. What is the issue for business? [0:04:32.4]

Louise Haycock: Well, these are huge rises to the salary required to qualify under the skilled worker category, and a very short period. And businesses have really relied on that skilled worker route, particularly since Brexit, to fill shortages whilst they’re upskilling resident workers. The rise is so great that it’s really going to impact all sectors, but particularly construction, manufacturing and hospitality, and there are going to be roles that are no longer eligible for sponsorship because of the salaries that are paid.

Now, the good news is the Government has confirmed that the new rate won’t apply to those who are already sponsored, and of course that’s a huge comfort to individuals. But businesses do still need to plan their pipeline for talent and know who it is that they can sponsor.

They also want confirmation that the new entrant discounts will be maintained, particularly as they are key to graduate programmes, which of course they’re recruiting for already, as well as having a much better understanding of the salary discount list as well.

How businesses can prepare

Robert Shore: So, what can businesses do to prepare, then? [0:05:33.2]

Louise Haycock: Well businesses, of course, are going to need to plan ahead for those changes, which are due in spring, most likely in April. They should look at their data to see who and what roles will be impacted. So whilst they can identify those roles paying under £38,700 quite easily, assessing the median salary for any given role is much more difficult.

Businesses, of course, can look at head count planning, so by bringing those forward before the rules are brought in. But they should also consider workforce planning, so looking at whether wages could be increased or whether vacancies could be filled through the resident labour market.

And of course looking at whether those upskilling programmes that they are already running have been successful and how they can potentially be accelerated.

Robert Shore: So it sounds as though communication is going to be key in all of this. [0:06:20.9]

Louise Haycock: As with all change management, communication to all of the stakeholders is going to be critical. And it will vary, of course, who you are speaking to. So sponsored workers and those holding graduate or youth mobility visas within your business are going to need some reassurance. Line managers and recruiters will need to know that they can plan the workforce. Talent and reward will need to know to consider pipeline talent and compensation. And the board is going to need to know that it’s all under control.

Changes related to business visitors

Robert Shore: Yeah. And what about business visitors? What changes did we see last year in regard to that? [0:06:55.0]

Louise Haycock: Well, the first and possibly biggest change was the pilot of the electronic travel authorisation. So it’s much like the US ESTA. It’s a digital permission to allow individuals to travel to the UK. It was going to be required by all non-visa nationals wishing to visit the UK, not those who hold a visitor visa or other permissions such as work-sponsored visas. And it’s not required for British or Irish nationals.

Initially, this was just for Qatari nationals but from 1 February the rollout went to nationals of Bahrain, Jordan, Kuwait, Oman, Saudi Arabia and the UAE.

Now, this is an application for individuals. There’s actually no requirement for businesses to track it. But it would seem prudent to make sure your business travellers are aware, and that could be through information sessions or information so they don’t find themselves unable to travel.

The second important and very positive change was around the permitted activities for business visitors. Remote work is now explicitly permitted, provided it’s not the primary purpose of a trip to the UK. Now, the United Kingdom had lagged behind in this area, and whilst not the full digital nomad permit that we’ve seen in other jurisdictions, this is a very important step in the right direction.

Another key change is that business visitors in an intra-company transfer setting will be able to work directly with clients, provided that it’s incidental to their employment overseas, and that the activities are required as part of a delivery of service being delivered by the UK business.

Immigration changes to expect

Robert Shore: What about the coming year? What changes should we expect? [0:08:27.9]

Louise Haycock: Well, aside from the salary thresholds and the costs, we’ve also seen the expansion of the youth mobility scheme. From 31st January nationals of Uruguay are able to apply, plus 30-35-year-olds from Australia, Canada and South Korea will also be eligible where they haven’t been before. Australians and Canadians will also be able to obtain a three-year permission. Those initially granted for two years are going to be able to extend, and the quota for those from Japan will increase. So in short, far more people are going to be eligible for that visa type.

There will also be continued digitisation. Biometric residence cards, which all expire on 31st December 2024, will no longer be used but instead will be evidenced via an e-visa, which you can see through an online portal. The right to work, of course, continues to evolve, with most checks now able to be performed online and many companies opting to use streamlined tools and IDSPs.

Fines also increase for employers, and now first-time offenders could be fined up to £45,000, and £60,000 for repeat offenders.

The big news, of course, will be the election. Now, last December the post of the immigration minister was split, and there is now a minister solely dedicated to legal migration.

Wealth immigration had been seen to decline in importance as an electoral issue. The migration statistics have suggested that all parties need to have a very clear strategy and vision about their goals to support business, and of course to attract top talent, so we do expect to see those policies evolving in the coming weeks and months.

Robert Shore: Well, thank you very much for that, Louise, for that excellent overview of changes. And it brings us to the end of this edition of the podcast. Just to thank Louise again – thank you.

Louise Haycock: Thank you very much for having me.

Robert Shore: And until next time.