MAC asked to review salary thresholds, related questions

23 Jul 19

UNITED KINGDOM

IMPACT – MEDIUM

What is the change? The U.K.’s Home Secretary has asked the Migration Advisory Committee to review salary thresholds for foreign workers.

What does the change mean? The MAC will review current salary thresholds and related questions, including the best way to calculate thresholds, whether thresholds should vary by region and the circumstances under which exceptions should be granted.

  • Implementation time frame:Ongoing.
  • Business impact: Changes to salary thresholds would potentially affect any number of companies employing foreign workers.
  • Next steps: The Home Office asked the MAC to complete its review by January of 2020. The Government would then determine which recommendations, if any, to adopt as policy.

Background: In December of 2018, the Government published a white paper proposing a new immigration system. The White Paper set the minimum salary for workers in the skilled-workers route at £30,000 per year, but officials said they would continue to consult stakeholders to determine whether that was the best threshold. In a letter last month, Home Secretary Sajid Javid asked the MAC to review (1) the best mechanism for calculating future salary thresholds, (2) the proper levels of salary thresholds, (3) whether the U.K. should introduce regional salary thresholds, and (4) whether some workers should be exempted from salary thresholds.

Analysis & Comments: Business groups have warned that a £30,000 salary threshold could lead to a skills shortage, especially in sectors with comparatively low wages, including social services and healthcare. A flat £30,000 threshold could also have an impact on regions of the U.K. with comparatively low wage rates. And while the MAC has previously recommended that existing salary thresholds should be retained, the Government’s request to review its impact in a post-Brexit environment indicates that the Home Office is willing to consider the concerns U.K. businesses have expressed regarding its earlier immigration White Paper.

Source: Deloitte LLP. Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 1 New Street Square, London EC4A 3HQ, United Kingdom.