Skilled Worker Salary Discount for New Entrants

What is a Skilled Worker New Entrant?

On April 4, 2024, significant changes to the Skilled Worker visa route were implemented in the government's strategy to reduce net migration. According to the new rules, visa applicants must now have a salary of either £38,700 per year or the going rate for the occupation code SOC 2020, whichever is higher.

The minimum "going rate" for a role can perform worse from the 25th percentile to the 50th percentile, meaning it now aligns with the median salary for a UK worker.

"New entrants" applying for the Skilled Worker visa are eligible for a salary discount. Employees should be aware of the specifics of the new entrant discount, eligibility criteria, and how they can benefit from it.

The government rules define a "new entrant" as someone nearing the start of their career and meeting the criteria specified below, rather than someone making their first Skilled Worker visa application or entering the UK for the first time.

New entrant criteria

• Under 26 years of age at the date of visa application.
• Postdoctoral researchers in specific occupation codes (SOC 2020).

• Working towards complete registration or chartered status with a relevant professional body.
• Working towards complete registration or chartered status with the relevant professional body for the sponsored job.
• Individuals with student or graduate leave to remain who recently completed a qualifying course:
  • UK bachelor’s degree
  • UK master’s degree
  • UK PhD or other doctoral qualification
  • Postgraduate Certificate in Education
  • Professional Graduate Diploma of Education
• Individuals whose most recent permission was under the Graduate route, which is either current or expired less than 2 years before the date of visa application.

Tradeable Points System

When applying for the Skilled Worker visa route, you need to score a minimum of 70 points to qualify and make a visa application under the existing rules. 50 points are gained based on the mandatory categories for sponsorship, skill level, and English proficiency. The other 20 points are tradeable points related to salary.

Under options E and J of Appendix Skilled Worker, new entrants can achieve 20 additional tradeable points in two ways.

Option E

For new skilled workers entering the UK workforce, 20 points can be awarded if the salary equals or exceeds £30,960 per year and 70% of the going rate for the SOC 2020 occupation code.

Option J

Option J applies to individuals previously granted permission as Skilled Workers under the immigration rules that were in effect before April 4, 2024. It also applies to those with continuous permission as Skilled Workers eligible for further sponsorship as new entrants. The applicant must have a salary equal to or exceeding £23,200 per year and 70% of the going rate for the SOC 2020 occupation code.

4-Year Time Limit for New Entrants

New entrants are eligible for discounted salary requirements for four years. This time limit includes any previous permissions under the Skilled Worker route or its predecessor, Tier 2, and time spent on the Graduate visa route.

An applicant cannot qualify as a new entrant for only part of their visa application period. If the total time as a Tier 2 migrant, Graduate, or Skilled Worker exceeds four years, they will no longer be eligible for the new entrant discount and need to score tradeable points in another way.

It is impossible to obtain permission for a shorter period than the period for which an employer sponsors the applicant. However, suppose an applicant has time remaining under the 4-year limit and would otherwise qualify as a new entrant. In that case, the Home Office may be flexible in revising the dates on the Certificate of Sponsorship, allowing the applicant to qualify as a new entrant.

This would require agreement from the sponsor and a recalculation of the Immigration Skills Charge and Immigration Health Charge. The Home Office would also have discretion over whether to approve this request.

Both UK employers and applicants must plan accordingly. Once the four-year limit is reached, workers must meet the standard salary threshold to continue their stay under the Skilled Worker visa route. For example, suppose an individual has already spent two years as a new entrant on the Graduate route. In that case, they can only benefit from the discounted salary for an additional two years as a Skilled Worker.

Example Scenario

Consider a candidate who has held permission as a Graduate for two years and now seeks a Skilled Worker visa for three more years. Since they can only qualify as a new entrant for two additional years, the Certificate of Sponsorship (CoS) should be issued for only two years at the discounted salary. After this period, the worker must meet the complete salary requirements of their SOC code if they wish to extend their stay. Employers must plan for this transition by ensuring their budget accommodates the increased salary once the new entrant discount expires.

Benefits for Employers

Employers can benefit from the tradeable points option by sponsoring candidates at 70% or 80% of the standard rate. This enables employers to access skilled global talent at a reduced salary rate. This flexibility provides a financial advantage, allowing employers to secure qualified candidates at a lower rate than typical Skilled Worker visa requirements.

The salary rates for new entrant skilled workers remain close to the same level as when they were previously set at the 25th percentile.

Employer Considerations

While the new entrant salary discount provides cost savings, it is limited to a four-year period, including any time spent on a Tier 2 route, Graduate route or a Skilled Worker visa. Employers need to consider the duration remaining for any prospective employee who has already held new entrant permission, as they may not be eligible for the entire four years.

Employers should proactively plan for future salary increases once the new entrant discount expires because they must meet ongoing sponsorship obligations at the standard rate. This includes applying for and assigning a new CoS to the worker at the total rate when required. The Skilled Worker visa application will be refused if the new salary does not meet the relevant minimum salary threshold.

Furthermore, employers must still comply with the same regulations required to ensure compliance with their sponsor licence responsibilities, such as maintaining accurate HR records and keeping the Sponsor Management System up to date. Failure to do this could result in a sponsor licence revocation or suspension.

Worked Example

Consider an applicant who previously held permission on the Graduate route for two years and now applies for a Skilled Worker visa for three more years. Since the maximum allowable period as a new entrant is four years, they can only benefit from the salary discount for an additional two years.

For example, software development (occupation code 2134) requires a minimum salary threshold of £34,580 for a 37.5-hour workweek, representing 70% of the total going rate of £49,400.

Employers must issue a Certificate of Sponsorship for two years at the £34,580 rate. After this period, the employee must transition to the standard Skilled Worker visa without the new entrant discount.

Therefore, employers must plan to meet higher salary thresholds to extend the visa, often requiring a significant salary increase to align with the total going rate for continued sponsorship.

Considerations for Skilled Worker New Entrant Route

The new entrant route offers employers and skilled workers flexibility in the early career stage. However, the long-term implications must be considered because new entrants must transition to higher salaries after the four-year limit, which will require planning.

Suppose you need guidance on new entrant rules, the skilled worker visa process, or advice on minimum salary requirements. Our legal team can help businesses and individuals at every stage of the process. QC Immigration provides support with sponsor licences, Certificates of Sponsorship (CoS), compliance, and personalised immigration advice. Contact us today to discuss your needs.