Upcoming Immigration Rule Changes Set to Bolster UK Construction Industry
Construction Roles Added to the Shortage Occupation List
Effective from August 7, 2023, the UK construction sector is poised for a substantial uplift with the inclusion of additional roles in the Shortage Occupation List (SOL). This development, announced in the 2023 Spring Budget, demonstrates the government's commitment to meeting the pressing labour shortages in various business sectors, notably construction, by facilitating overseas recruitment.
The new additions to the SOL are as follows:
- Bricklayers and masons
- Roofers, roof tilers and slaters
- Carpenters and joiners
- Plasterers & dry liners
- Construction and building trades not elsewhere classified.
Why is this good news?
The SOL is a catalogue of roles in demand where UK employers cannot find sufficient local workforce, and it makes sense to address these shortages with migrant labour.
Roles listed on the SOL are eligible for the Skilled Worker visa and benefit from advantageous immigration conditions, granting employers swifter access to a broader range of qualified workers.
Workers in a SOL-designated role can earn 80% of the standard rate for their job and still be eligible for a visa, and they also enjoy reduced visa application fees.
How Can Employers Leverage These Changes?
These changes mean that construction companies now have an expanded opportunity to sponsor overseas workers for various roles. However, employers should know that the procedure involves more than just job advertisement, candidate identification, and job offering.
Employers seeking these eased regulations must first gain Home Office approval to sponsor overseas employees. This necessitates applying for a Home Office Sponsor Licence, assuming one has not already been granted.
How does a construction business obtain a Home Office Sponsor Licence?
If the construction business satisfies the necessary criteria and has the required compliance mechanisms in place, obtaining a Home Office Sponsor Licence is relatively straightforward, involving the following steps:
Document Gathering & Preparation The organisation will need to collate several documents to support the application Review/Create Systems and processes should be created/adapted to meet UKVI's stringent Sponsor Duties Application Form & Payment Company/employer completes an online application form and makes payment Send Documents to UKVI The stipulated supporting documents are sent to UK Visas and Immigration within five days of the UK work sponsorship application payment being made UKVI Reviews Application UK Visas and Immigration may undertake a compliance visit as part of their sponsorship licence application consideration Application Outcome Notification Notification of the Home Office sponsor licence application is usually received via email within 6 to 8 weeks, unless Priority Service was purchasedWhat are the costs of applying for a Sponsor Licence?
Applying for a Home Office Sponsor Licence involves certain financial commitments, one of which is the application fee. This fee is determined by the size of the organisation, and it is a prerequisite for entering into the sponsorship process.
The application fee varies depending on the size and revenue of the business, these are as follows (at the time of writing):
- If your organisation is categorised as small: £536.00
- Organisations falling under the medium or large category have an application fee of £1,476.
A company is usually considered a small sponsor if at least 2 of the following apply:
- the annual turnover is £10.2 million or less
- the total assets are worth £5.1 million or less
- the company has 50 employees or fewer
It's important to note that this fee is purely for the application of the Sponsor Licence and does not include other potential costs related to hiring overseas workers, such as the Immigration Skills Charge or fees associated with individual Certificates of Sponsorship.
Finally, remember that the Sponsor Licence is valid for four years, after which you'll need to renew it. The cost of renewal matches the initial application fee.
The Additional Costs in Sponsoring Overseas Talent
Aside from the Sponsor Licence application fee, businesses should consider several additional costs when hiring international talent by utilising the UK Skilled Worker visa.
1. Immigration Skills Charge (ISC): The ISC is payable by the employer for each foreign worker they sponsor.
- The charge is £1,000 per year (i.e. £3,000 for a 3 year visa, £5,000 for a 5 year visa) for medium and large sponsors
- £364 per year (i.e. £1,092 for a 3 year visa, £1,820 for a 5 year visa) for small sponsors.
The ISC is designed to fund training for UK workers and is payable upfront for the total visa duration when assigning a Certificate of Sponsorship (CoS).
2. Certificate of Sponsorship (CoS) Fee: For each overseas worker you sponsor, you need to assign a CoS. The CoS is essentially an online work permit.
- The cost for a CoS is £199.
3. Visa Application Fee: This is the fee the worker and any dependant family members must pay when applying for a visa. The fee varies depending on the type of visa and where the applicant is applying from. Some companies choose to cover this cost to make their offer more attractive, but it is not mandatory.
Indicative visa fees (per person) for Skilled Worker and dependants visas are below, although they are subject to change:
Applications from outside the UK (e.g. new hire, never had a work visa):
Job is on the Shortage Occupation List
- Visa valid for up to 3 years: £479.00
- Visa valid for up to 5 years: £943.00
- Optional priority service: £220.00
Job is NOT on the Shortage Occupation List
- Visa valid for up to 3 years: £625.00
- Visa valid for up to 5 years: £1,235.00
- Optional priority service: £220.00
Applications from inside the UK (e.g. if they are already sponsored and changing employer or extending their work visa):
Job is on the Shortage Occupation List
- Visa valid for up to 3 years: £479.00
- Visa valid for up to 5 years: 943.00
- Optional priority service: £500.00
Job is NOT on the Shortage Occupation List
- Visa valid for up to 3 years: £719.00
- Visa valid for up to 5 years: £1,423.00
- Optional priority service: £500.00
4. Immigration Health Surcharge (IHS): The IHS allows visa holders to access the UK's National Health Service.
The current rates:
- Adults: £624 per year (i.e. £1,872 for a 3 year visa, £3,120 for a 5 year visa)
- Dependants under 18: £470 per year (i.e. £1,410 for a 3 year visa, £2,350 for a 5 year visa)
Like the visa application fee, some employers opt to cover this cost to enhance their offer, though it isn't required.
Expected fee increases
In a recent announcement made in July 2023, the UK government has disclosed plans to raise certain visa-related fees. This measure is part of a broader strategy to fund public sector pay rises.
While the complete details are still to be released, the key changes include:
- Immigration Health Surcharge (IHS) to increase from £624 to £1,035 for each year of the visa for adults, and £776 per year for under 18s.
- Work visa application fees to increase by 15%
- Certificate of Sponsorships (CoS) to rise by at least 20%
- Notably, the fees for the Priority Service will be standardised regardless of whether applications are made within or outside the UK. This may result in a significant cost increase for applications submitted outside the UK to align with the higher domestic fee of £500 (subject to further increases).
The UK Government has confirmed that there will be an increase in immigration fees; however, the precise date when these changes will take effect remains unconfirmed, with speculation pointing to no later than the end of January 2024. Therefore, it would be advantageous for companies to act swiftly and utilise the current lower fees while they still apply.
These impending increases underline the importance of including immigration costs in your business's workforce planning. Expert advice can ensure that you are fully informed of all potential financial implications, helping you to navigate these changes successfully.
Accounting for Salary Expectations: Meeting or Exceeding Minimum Requirements
On top of the previously mentioned expenses, it is important to note that there's also a mandatory salary threshold to fulfil when hiring from abroad. The offered salary must meet or exceed the minimum requirement set for the particular visa category or Standard Occupational Classification (SOC) code. However, occupations on the Shortage Occupation List (SOL) do benefit from a 20% discount on the salary threshold, which can make hiring foreign talent more financially feasible.
Regardless of whether the position is on the SOL or not, the salary must meet the necessary requirements. For example, at the time of writing, for a Skilled Worker visa, the minimum salary for a role on the SOL is £20,960 per annum or the 'going rate' for the job, whichever is higher.
The 'going rate', or on the amount on the SOC code is often higher than the visa category salary requirement, however this is negated when a role is on the SOL.
Please see below a break down for the construction roles which will appear on the SOL from 7 August 2023, these are estimated and to be confirmed once the new SOL rates are published.
SOC Code Title | Salary Requirement on SOL (£) | SOL Going Rate (80% of the “going rate”) (£) | Minimum Salary to be paid (£) |
Bricklayers and masons | 20,960 | 19,120 | 20,960 |
Roofers, roof tilers and slaters | 20,960 | 16,160 | 20,960 |
Carpenters and joiners | 20,960 | 18,000 | 20,960 |
Plasterers and dry liners | 20,960 | 19,200 | 20,960 |
Construction and building trades not else classified | 20,960 | 17,760 | 20,960 |
In addition to the above which are shortly to be added to the SOL, the below are already on the list:
SOC Code Title | Salary Requirement on SOL (£) | SOL Going Rate (80% of the “going rate”) (£) | Minimum Salary to be paid (£) |
Welding trades – only high integrity pipe welders | 20,960 | 18,480 | 20,960 |
It is essential to consider this cost while budgeting for recruiting international talent, as failure to meet these minimum salary requirements can result in a refusal of the sponsorship licence or the individual's visa application.
Remember, while these costs may seem daunting at first, the value and skills that overseas talent can bring to your organisation can far outweigh the initial investment. If you are unsure about navigating these requirements or need tailored advice on UK immigration policies, Immtell is here to help.
Beyond the 5-Year Sponsorship: The Next Steps
It's important for businesses to understand that the usual sponsorship for an individual period is a five-year commitment. Following this, the sponsored employee, assuming all conditions are met, can apply for Indefinite Leave to Remain (ILR). This transition allows the individual to enjoy unrestricted work rights, removing any further immigration-related responsibilities or costs from the sponsoring company.
Furthermore, any time the individual has previously spent in the UK under a qualifying visa (including the Skilled Worker or previous Tier 2 (General) whilst working for another sponsor) can be counted towards the five-year requirement, potentially shortening the sponsorship duration and responsibility for the current employer.
What Action Should Construction Companies Take Now?
Adding more construction roles to the Shortage Occupation List is a pivotal moment for construction companies to tap into the international talent pool and fill the scores of open vacancies. Here's a guide to steps you should consider immediately.
1. Evaluate your needs: The first step is to understand your current and future talent needs. Do you have gaps in your workforce that overseas workers could fill? These could be in the newly added roles or others that are already on the Shortage Occupation List or the wider eligible roles permitted under the UK Skilled Worker visa.
2. Understand the Sponsor Licence process: If you haven't already, familiarise yourself with the process and requirements of obtaining a Home Office Sponsor Licence. This will allow you to sponsor foreign employees and is crucial for accessing overseas talent.
3. Apply for a Sponsor Licence: The application process for a Sponsor Licence takes time. Considering that it could take up to 8 weeks (longer if they decide to conduct a pre-licence audit) for the Home Office to process the application if you believe your company will benefit from overseas recruitment, apply as soon as possible.
4. Budget for the costs: As mentioned earlier, applying for a Home Office Sponsor Licence and sponsoring workers involves certain costs. Budgeting for these ahead of time can prevent any unpleasant surprises.
5. Plan your recruitment strategy: Start considering how you'll recruit overseas talent. This might include working with international recruitment agencies or exploring online platforms. Remember, the changes to the SOL offer you a broader pool to recruit from, so plan accordingly.
6. Compliance matters: Be mindful that sponsoring overseas workers comes with compliance duties. You must maintain certain records and report specific information to the Home Office. Failure to do so can lead to losing your licence and your sponsored workforce!
Lastly, seeking professional advice can be invaluable in navigating these new opportunities. At Immtell, we specialise in UK immigration services, and we're here to help you at every step, from obtaining your Sponsor Licence to ensuring compliance and helping successful candidates get their work visas. Don't hesitate to Contact our team for personalised advice tailored to your company's needs.