Labour’s plans for business immigration

Written by Pam Sidhu, partner and head of business immigration of Wilkes

With a Labour Government now in power, businesses are anticipating incoming changes to the UK's immigration policies.

Labour's agenda focuses on reducing net migration by bolstering the skills of the domestic workforce and implementing tighter controls on immigration.

But what does this really mean?

Timeline for change

In the run-up to the election, Labour pledged to introduce new employment legislation within their first 100 days of entering government. In doing so, Labour have agreed to consult with businesses across the UK before passing any legislation.

However, given the complexity and scale of their business immigration policies, we expect any changes to be rolled out more gradually with changes likely taking effect by 2025.

Pam Sidhu, partner and head of business immigration, said: “The Conservatives already introduced some seismic changes to immigration law and policy in the few months leading up to the election.

“Therefore, it would be premature for the Labour Government to make further radical changes too quickly without assessing the impact of the changes already introduced.

In April 2024, the general minimum salary threshold for skilled worker sponsorship visas was increased by 48 per cent to £38,700, and we are yet to see the full impact of this on recruitment strategy across sectors and regions in the UK.”

Key proposed reforms

Labour's business immigration strategy includes several critical measures designed to align immigration with the development of domestic skills:

Reduce net migration: Labour plans to impose “appropriate restrictions on visas” by reforming the points-based immigration system. An idea being floated currently is a resident labour market test (which was removed in January 2021) may potentially be re-introduced, which will require employers to show they have first tried to recruit a UK citizen/settled worker in the UK before hiring migrant workers who require sponsorship.

Improve the domestic workforce: Different parts of government will put in place “skills improvement plans” to train UK-based workers.  This could be seen in sectors such as health and social care, IT, construction and engineering and employers will be required to create detailed training plans to curb reliance on overseas workers.

Enforcement against non-compliant employers: Employers who breach immigration rules or employment laws will face bans on hiring from abroad. Labour is set to impose stricter penalties for non-compliance with the minimum wage and other employment regulations.

Strengthening the Migration Advisory Committee (MAC): MAC will work closely with the Labour government to ensure that immigration policies meet the UK’s skills and economic needs.

This includes reviewing the increased minimum salary requirements for Skilled Worker sponsorship visas and addressing sector-specific workforce challenges.

Review of skilled worker sponsorship visas

Skilled Worker sponsorship visas allow individuals to stay in the UK to do an eligible job with an approved employer, however the employer must be approved by the Home Office and provide the individual with a certificate of sponsorship.

In addition, the employer must pay a minimum annual salary of £38,700 or the “going rate” for the particular job (whichever is higher), subject to certain exceptions.

It is expected that the government are to instruct MAC to conduct a review of the minimum salary requirement that was increased under the Conservatives. MAC will investigate the effects of the increase on net migration figures so the minimum salary requirement could be subject to change.

Under the Conservatives, action was taken to reduce the number of dependants entering the UK on student visas and with sponsored care workers. As of January 2024, most international students have been unable to bring family members with them to the UK and Labour are expected to retain this position.

Action for employers

Review your hiring process: Employers who are currently engaged in recruiting overseas workers may wish to identify and address any potential delays in recruiting before the rules change.

Assess your training needs: Employers may wish to determine skills gaps within their workforce and develop improvement plans. Labour’s Growth and Skills levy may offer funding opportunities for these initiatives.

Ensure ongoing compliance: Employers should adhere strictly to the minimum wage, Working Time Regulations and other employment laws to avoid penalties and potential loss of sponsor licences.  Sponsorship compliance is likely to become more strict.

Monitor your current practices: Employers should ensure that all current human resources practices relating to hiring overseas workers are compliant with current and forthcoming regulations.

Conclusion

Labour's proposed changes to business immigration rules signal a significant shift towards upskilling the UK workforce and reducing reliance on overseas workers. While the full impact of these changes will unfold over some time, businesses should start preparing now to navigate the forthcoming changes.

For more information or to discuss anything business immigration related, please contact our Partner and Head of Business Immigration, Pam Sidhu, on 0121 233 4333 or by email at psidhu@wilkes.co.uk