Gary McIndoe is managing partner at Latitude Law
Since the UK left the EU, restrictions on employing overseas workers have been lifted to allow businesses to access the skilled staff they need. The number limit was lifted and the resident labor market test requirement was also removed. Most importantly in the sector, the minimum levels of competence and qualification were lowered, from RQF6 to RQF3. This has allowed, since 2020, the sponsorship of all the main construction trades, from carpenters to masons, electricians to roofers, plumbers and dryers.
“The government has recently announced that visa application fees will rise by 15 per cent later in 2023 and the surcharge will increase”
Other practical barriers to sponsorship that might have existed a few years ago have also been reduced, most notably the minimum wage requirement, which at its current rate of £26,200 is within industry norms for most jobs. This, however, must be balanced against the relatively high cost of setting up your company for sponsorship through the licensing process, and then the cost of individual sponsorship certificates, associated visa fees, immigration skills and health surcharges.
The end result for most companies, however, is the need to hire from a limited pool to fulfill contracts. For many, this means considering overseas worker sponsorship; an increasing number of construction companies are obtaining licenses to access wider talent pools in Europe and beyond.
In recent changes to immigration rules announced in July, the government has made further changes that offer savings on application fees by adding a number of occupations to the Shortage Occupation List (SOL) . This list is periodically reviewed and updated following the recommendations of the Migration Advisory Committee. The roles listed in the SOL are suitable for sponsorship under the Qualified worker routewith certain advantages linked to this sponsorship.
As of August 7, 2023, the following trades are considered shortage occupations:
- Popsicles and popsicles
- Ceilings, tiles and slates
- Plasterers
- “Building and construction trades not elsewhere classified”
These additions add a number of trades to the shortage list. Please note, however, that some roles are excluded as they are ‘classified elsewhere’, such as plumbers and electricians, who must follow the standard sponsorship route.
How does the SUN make a difference?
The difference used to be huge as it removed the resident labor market test requirement. Now that you’ve gone through the sponsorship board, is it really that much easier to sponsor a shortage occupation?
Once the right role and worker have been identified, companies will need to consider their salary, which must meet immigration standards. For most skilled workers, a minimum wage or general threshold of £26,200 per annum or £13.44 per hour is required, unless the identified role has a ‘continuity rate’ above the threshold, in which case it will apply the highest rate. The participation rate varies based on the role identified for sponsorship.
For SOL jobs, a lower minimum wage applies. For these roles, the general salary threshold is just £20,960 per annum or £10.75 per hour. If the workplace has a higher operating rate, only 80 percent of the operating rate is payable.
Applying the above to masons under standard occupation code 5312, the current rate of £23,200 is below the general threshold of £26,200 to start with, which meant that £26,200 was the salary required for sponsorship. As a shortage occupation, the general threshold is reduced to £20,960 or 80% of the prevailing rate (so 80% of £23,200, which is £18,560, is lower than the general threshold), so s ‘a minimum of £20,960 applies.
As well as benefiting from lower salary thresholds, those who are sponsored into a shortage employment role pay lower visa application fees to the Home Office. Fees are currently £479 for sponsorships up to three years and £943 for sponsorships over three years. Compare this to roles that are not included in the SOL, paying fees of £719 and £1,423 respectively. All applicants must also pay an immigration health surcharge. Regardless of whether the role is a shortage occupation or not, employers are also likely to have to pay an immigration skills charge, unless the worker qualifies for an exemption. These fees add up quickly.
It should be noted that the government has recently announced that visa application fees will increase by 15% later in 2023 and the surcharge will increase from £624 to £1,035 per year of sponsorship for adults. Therefore, the rates are high and are expected to increase further.
There is an advantage: companies can hire skilled workers sponsored by another organization to carry out part-time (up to 20 hours per week) shortage employment to carry out complementary work alongside their main sponsored function, without having to offer sponsorship themselves.
Sponsorship is not a cheap or easy solution to staffing problems. However, it is a useful tool in the armory of construction companies facing recruitment and retention issues.
