For UK businesses that sponsor skilled workers, it is crucial to understand the salary requirements for their sponsored employees. The salary that an applicant needs to paid is not constant; rather it’s dynamic and must be calculated by applying the immigration rules and Home Office guidance. This ensures compliance with immigration rules, as any inaccuracies in calculating the salary may lead to a refused visa application or a potent enforcement action against the sponsor for non-compliance with the sponsor guidance regulations.

HOW MUCH IS THE MINIMUM A SKILLED WORKER CAN BE PAID?

There are three primary benchmarks that help determine the salary requirements for a Skilled Worker:

• General Threshold: The basic starting point, set at £26,200 annually.
• Hourly Rate: The minimum hourly wage, standing at £10.75.
• Going Rate: A rate determined by the specific occupation code (SOC) of the job.

Let’s dive into each of the above benchmarks to identify the complexities that dictate the salary requirements for the Skilled Worker visa.

UNDERSTANDING GENERAL THRESHOLD:

While £26,200 is the standard minimum annual salary for Skilled Workers, however there are certain exceptions! The salary can be as low as £20,960 if the worker secures “tradeable points.” This means applicants will be able to trade characteristics, such as their qualifications, against a lower salary. The most likely scenario being job offers in shortage occupations or holders of specific PhD qualifications.

However, the General Threshold is influenced by additional factors:

• The relevant SOC code: Each job has a specific code, which can impact the salary bracket.
• Have you checked whether they are eligible for a reduced salary? Yes, Certain criteria can make an applicant eligible for a reduced threshold.
• How much is the salary based on the number of hours expected to be worked? The expected working hours will affect the final salary (i.e. The salary rates in the occupation codes should be prorated)

CALCULATING SALARY BASED ON THE GOING RATE

Every job role in the market has a value, often referred to as the “going rate”. The going rate aligns salaries with industry standards and specifies the average salary for that role. Each job or role has its specific SOC code, which is featured on the Government’s list of eligible occupations under the Immigration Rules. This SOC code also lays down the ‘going rate’ for the job role in question.

A. How to select the correct occupation code?

An essential resource for employers is the government’s list of eligible occupations under the Immigration Rules. This list not only provides the going rate for various roles but also sets out the minimum salary benchmarks for new entrants, and other workers in different levels.

It is equally important to determine the correct SOC code. Opting for a non-listed code means the role isn’t eligible for sponsorship under the skilled worker route. Notably, an incorrect SOC code will lead to worker’s visa likely being refused. Mistakes in choosing the occupation code can be rectified if genuine. However, if the Home Office suspects the wrong code was intentionally chosen to bypass sponsorship rules—especially if the correct code wouldn’t align with the required salary or skill level—they could suspend the employer’s sponsor licence whilst they investigate further. Hence, always be prepared for the Home Office to review and confirm the SOC by examining the job description for the position being filled.

The list of occupation codes is regularly updated, it’s crucial to ensure that SOC codes used in the past are still eligible for sponsoring a new worker.

B. Checking Eligibility for Salary Reductions:

Any workers who has a PhD in a relevant filed, or the position is on the shortage occupation list or when the worker is a “new entrant” can be paid between 70% and 90% of the usual going rate for the role, in such cases the salary is at least £20,960 per year. This flexibility in the salary requirements are facilitated by the ‘tradeable points’ regulations.

A candidate will be considered as a new entrant if they are under 26 years of age at the time of making their visa application, and they are either:

• Sponsored in a postdoctoral research position, or
• Applicant is working towards a recognised professional qualification in a UK-regulated profession.

As such, anyone relying on the new entrant rate must be able to show that they meet the above criteria.

However, new entrants have a limitation; they can remain under this category for a maximum of three years. Beyond this period, they would no longer be a ‘new entrant’. So when it comes to extension of his Skilled Worker visa the employer will need to ensure that the worker’s salary has risen above to align with the experienced worker rate, to qualify for an extension.

STEM vs. Other PhDs: Holders of Science, technology, engineering, and mathematics (STEM) PhDs benefit from a lowered salary requirement of £20,960. On the other hand, those with PhDs in subjects relevant to the job role must meet a minimum salary of £23,580.

CALCULATING SALARY BASED ON HOURLY RATE

The emphasis on salary calculation isn’t limited to the annual figure; it extends to hourly rates as well. The minimum hourly pay is £10.75. Sponsors must determine the minimum salary considering the working hours. It’s vital since SOC code rates are set at a 37.5-hour week. So, if a worker’s contractual hours vary, salary adjustments by prorating the going rate must be made to ensure they remain eligible. This adjustment becomes all the more critical when salaries are exactly at the minimum threshold for a role.

To conclude, while navigating the complexities of Skilled Worker visa, calculating salary demands careful attention to detail and adherence to evolving regulations. The process may seem like a puzzle, but by understanding the three crucial components—the general threshold, the going rate, and the hourly rate—applicants and employers can simplify the path toward a successful visa application. Always stay informed about changes in occupation codes and eligibility criteria to ensure a smooth and compliant journey.