From 12th April 2023, the Home Office updated the minimum salary requirements for those under the Skilled Worker and the Health and Care Worker routes. This may come as a surprise to many as the UK government decided to reduce the salary requirements and skill level when the new Skilled Worker visa category was introduced in December 2020.
The Home Office has a long history of increasing the salary requirements for work visas, so individuals should not be surprised by this change. Below we discuss the increases to the salary requirements.
What Are the Salary Changes?
The Home Office has made changes in the following areas:
● Increasing the minimum salary requirements for Skilled Worker and Health and Care Worker visas
● Increasing the hourly rate that someone has to be paid for Skilled Worker and Health and Care Worker visas
● Reducing the working hours when using the `going rate` as a salary minimum
What Are the Minimum Salary and Hourly Rate Changes?
Previously, the minimum salary was £25,600 per year for all applicants unless they held a PhD in a subject relevant to their role, then the salary minimum was £23,040 per year. New Entrants, those with a PhD in STEM subjects that are relevant to their role, and those in shortage occupations or health and educational roles had to meet a minimum salary of £20,480 per year.
The below table now shows the minimum salaries for individuals that fall into each of the above categories from 12th April 2023:
This minimum salary increase represents an increase of 2.3%, which may not seem like a massive increase but it is unclear why the Home Office used this figure. The current increase in salaries for those working in the private sector was 7% and 4.8% for those in the public sector between November 2022 and January 2023, according to the Office for National Statistics.
This calls into question, whether the Home Office will be using the 2.3% figure going forward, also as there has not been an increase for over 2 years, will this be an annual increase or is this a one off.
The second change that the Home Office have made is increasing the minimum hourly rate from £10.10 per hour to £10.75 per hour. This applies to all roles except those in the health and education roles, who remain exempt from this requirement.
This represents an increase of 6.4% per hour, and is 3.2% higher than the minimum wage for those aged 23 and over. Unlike the minimum wage, the minimum hourly rate does not differ depending on an applicant’s age.
If an individual submitted their application prior to this date, they do not need to meet the new minimum salary requirements until they extend their visa.
What Are the Changes to Working Hours and How Does That Affect Their Salary?
Prior to 12th April 2023, the `going rate` depended on the Standard Occupational Classification (SOC) code minimum salary, based on 39 hours per week for most SOC codes (with some exceptions applying to some codes).
The Home Office reduced the working hours, from 39 hours per week to 37.5 hours per week. Furthermore, some SOC codes had their minimum salary increased whilst working fewer hours. Post the pandemic, the Office for National Statistics confirms that working hours have fallen from an average of 37.3 hours per week to 36.6 hours per week, which may explain the reason for the Home Office’s decision to decrease the weekly working hours.
This however, could disproportionately affect sectors where individuals work longer hours, such as those in the Health care, retail and leisure sectors. The Trade Unions Congress states that chefs work an average of 39 hours per week and health care practice managers work on average 57 hours per week. The SOC code states the `going rate` as an annual salary for 37.5 hours per week and the hourly rate (for those working longer hours).
Some individuals will need to meet a higher salary threshold. For example, if someone works 39 hours and their SOC code minimum is £23,595 per year for a 37.5 hour week, we will need to work out their salary using the hourly rate and their actual working hours. In this example, the individual’s `going rate` would be £24,538.80 per year, not £23,595.
However, the Home Office has also made some positive changes, by also reducing the `going rate` on some SOC codes. For example, restaurant and catering establishment managers and proprietors have seen their `going rate` salary reduced by 10.5%, however, all individuals need to meet the `going rate`, hourly rate and visa minimum salary.
As with the other changes, if their visa application was submitted prior to the 12th April 2023, they do not need to meet the new going rate, until they extend their visa.
If you have any questions about the new salary requirements, please contact us at WestBridge and we will be happy to assist you with making sense of the new rules.