UK Migration Advisory Committee reviews the shortage occupation list

Are significant changes ahead for the skilled worker route?

As a result of numerous factors, including Brexit, Covid-19 and the wider UK economy, there has been a significant impact on the labour market with workforce shortages across the economy. This goes some way to explain the number of foreign workers being at the highest it has ever been.

Over the last decade, hospitality and the professional and scientific sectors have had the strongest growth in employees, whereas there has been slow growth in agriculture, construction, and retail and wholesale. 

Bi-annual review

Following the Migration Advisory Committee's review in 2020 of the shortage occupation list, it recommended a bi-annual major review of the list, to which the government agreed. However, the recommendation was that a major review should not take place before 2022 to enable enough time for evaluation of the new immigration system and to allow the labour market to recover from the Covid-19 pandemic. 

The MAC has now completed the major review of the shortage occupation list (SOL) with the view and recommendation that no employer should be able to pay below the "going rate". The home secretary wrote a summary letter as well as the Home Office publishing the 130-page report.

SOL's purpose

Being on the SOL has several advantages for sponsors. It allows employers to pay 80% less of the going rate. UK Visa and Immigration does not require the same recruitment compliance of shortage roles. And it involves lower application fees.

The MAC approach

The migration committee started its review with the assumption that no occupation remains on any SOL, except for care workers and senior care workers. It put out a call for evidence to stakeholders. If no evidence from stakeholders for an occupation was received, it was not considered. Where evidence was received for an occupation focusing on a particular devolved nation, they only considered this occupation for inclusion on that particular devolved nation SOL. Any England-specific evidence was considered in relation to the UK-wide SOL. 

The UK government departments outlined their objections to the initial recommendations and believe that the SOL is a marketing tool to attract potential workers from overseas (although they provided no evidence of this), the going rate for an occupation is not universal across job titles within an occupation or across different nations and regions of the UK, and the visa fee reduction on the SOL is more than a "negligible benefit" (although they did not provide evidence that the visa fee reduction of approximately £50 per year provided by the SOL is a major benefit).

MAC's recommendations

The general consensus is that the MAC have recommended to the government that the SOL is either abolished or heavily reformed. 
Since the removal of the resident labour market test (RLMT), the MAC believes that the benefits of the SOL has become limited. Previously, it meant that employers could waive the RLMT requirement and there was no work visa cap for recruitment on the SOL occupations. 

Now, the only benefits are the reduced salary threshold and slightly reduced fees. As well as this, and contrary to the belief of many stakeholders, applications under the SOL are not dealt with any faster than standard applications under the SW route.

More suggestions

One of their suggestions is that the government changes the name of the SOL to the immigration salary discount list (ISDL) to correctly reflect its function on in the immigration on system.

The MAC has also suggested the removal of the going rate discount, which is designed to prevent undercutting of resident workers and to prevent exploitation. They recommended that all occupations on a national pay scale, alongside those where the going rate exceeds the general threshold, are made ineligible for the SOL.

Furthermore, the SOL makes a minor difference with regards to fees. With the minimum salary threshold, a £50 higher annual visa fee is less than 0.25% of annual pay (even smaller for those on higher salaries). In addition, it is common practice for sponsors to cover these costs. 
Stakeholders have posed the argument that the possibility of allowing a discount on the going rate allows for inequality to be perpetuated rather than addressed. The MAC believes that focus should be shifted onto initiatives improving female representation in those occupations and ensuring equal pay across genders for the same work. 

Finally, lower skilled roles encompassing Regulated Qualifications Framework (RQF) 1-2 roles were considered. Previously, roles within this RQF 1-2 bracket, where acute shortage existed, were included on the SOL in order to "bypass" the minimum skills threshold. Evidence was submitted for 65 occupations which the MAC reviewed for inclusion. Fifty-three of these did not meet the minimum criteria for consideration, while the remaining 12 were considered in detail. None demonstrated a need for inclusion on the SOL by providing the necessary high bar of evidence and, as a result, were not recommended to be added to the SOL. 

Occupation review

There were 92 occupations that were eligible for review, as 53 occupations were triaged out of consideration. 

At the conclusion, MAC recommended only eight UK-wide roles be included on the SOL, these categories were: 3111 laboratory technicians (only those with three-plus years' experience); 3217 pharmaceutical technicians; 5312 bricklayers and masons; 5313 roofers, roof tilers and slaters; 5319 construction and building trades NEC (only "retrofitters"); 6139 animal care services NEC (with specific limitations); 6145 care workers and home carers; and 6146 senior care workers.

The MAC has also recommended the reclassification of sommeliers, who are currently under the SOC code 9273 for waiters and waitresses. The MAC recommend reclassifying “sommeliers” to RQF 3+ within the existing SOC code of 3542 for business sales executives, but with the caveat of "must have" three or ,more years of experience. 

The MAC also raised the question whether the government wishes to expand the skilled worker route to include low-wage RQF 3+ jobs and it wants the government to address this ahead of any further SOL reviews. The MAC's suggestion is that if the government opposes allowing low-wage employers to pay below the general threshold for the skilled worker route, then the SOL should be abolished or heavily reformed to address this issue.

Osborne Clarke comment

At this stage, we recommend employers stay abreast of the changes given the impact on visa costs, compliance requirements and possible salary adjustments needed and plan for the likely changes which will result from the report.

We expect the salary thresholds to be updated in April 2024 and SOC 2023 to be fully adopted. Businesses will, therefore, need to be aware of any new salary requirements and budget accordingly for any new hires and visa extensions needed.

However, what remains to be seen is following the significant overhaul recommended of the system, what is the future of the skilled worker route? When the points-based system was implemented, it was emphasised that it would prioritise visas for those who were considered essential for the UK economy based on skills, education and salary. 

This has rapidly disappeared with no "points" assessment being undertaken. Will the recommendation to remove the only remaining element (the preference to shortage occupation roles), the governments push to include lower-skilled jobs and lower salaries be the final nail in the coffin for the system as we know it? Or, is this a sensible response to the labour issues the UK face? If so, is it time for an employer-led approach to overseas recruitment rather than government, almost like the former Work Permit Scheme?