In April 2024, significant increases to the qualifying salary thresholds for the Skilled Worker and Global Business Mobility routes came into effect. This policy shift has profound implications for both employers and international graduates in the UK. As the Home Secretary has confirmed there will be no reversal of these increases, understanding the details of salary discounts and their application is crucial for navigating this new landscape.
Understanding the New Salary Thresholds
The recent changes have introduced new salary thresholds that employers must meet when hiring through the Skilled Worker and Global Business Mobility routes. The key adjustment is a notable increase in the qualifying salary rates, which has raised concerns about the affordability and feasibility of hiring new entrants, particularly those at the start of their careers.
New Entrants Salary Discounts: The new entrants category, as outlined in Appendix Skilled Worker of the immigration rules, offers a discount on the general salary threshold. Specifically, there is a 20% discount, setting the new threshold at £30,960. Additionally, the going rate discount is applied at 30% below the new median (50th percentile) rate, which effectively keeps these rates in line with the previous 25th percentile rate. This discount is designed to make it more feasible for employers to hire individuals just starting their careers.
Who Benefits from These Discounts?
The new entrant salary discounts are designed to benefit:
- Young applicants under the age of 26 at the time of their application.
- Individuals transitioning from student or graduate routes to the Skilled Worker route.
- Postdoctoral scientific researchers and higher education teaching professionals.
- Applicants working towards a professional qualification or full registration with a UK-regulated profession.
Students who hold a bachelor’s degree or higher, including PGCE and Professional Graduate Diplomas, as well as those on the graduate route, can also benefit. However, they must ensure their permission is either current or expired less than two years before the application date.
Impact on Employers and Applicants
The increased qualifying salary rates, particularly the shift to the 50th percentile for the going rate, means employers are more likely to hire candidates who already have higher salaries. This could potentially limit opportunities for new entrants, who might face difficulty in meeting the new higher salary thresholds once their discounted rate period ends.
For employers, the new entrant category provides temporary relief from these higher salary demands. However, this discount is available for only up to four years. After this period, employers will need to pay salaries that exceed the 50th percentile for their profession, potentially leading to challenges such as wage inflation and discrimination claims.
For applicants, especially those just starting their careers, the new entrant discount offers a critical opportunity. However, they face the challenge of advancing quickly to meet the higher salary thresholds to ensure continued sponsorship and eligibility for settlement.
Challenges and Considerations
The increased salary thresholds may deter some employers from hiring new entrants, fearing the future cost implications. This could lead to a decrease in opportunities for international graduates and impact the UK’s attractiveness as a destination for higher education.
The Home Secretary’s decision to retain the graduate visa indicates an effort to support international graduates, but the current salary thresholds and the four-year limit on new entrant discounts may still pose significant obstacles. Advocates and stakeholders may need to push for more flexible rules to better accommodate the needs of employers, graduates, and the higher education sector.
As both employers and international graduates adjust to these new salary thresholds, understanding and utilizing the available discounts is essential. While the new entrant category offers some respite, careful planning and awareness of the potential long-term implications are necessary. The UK higher education sector and international graduates may benefit from continued advocacy for more flexible immigration rules to ensure a balanced and fair approach to hiring and career progression.