In April 2024, significant changes were made to the salary thresholds for the Skilled Worker visa route in the UK. The general salary threshold increased from £26,200 to £38,700, alongside rises in various concessions, including those for new entrants and PhD holders. Additionally, the ‘going rates’ for certain roles were adjusted, aligning salaries with the 50th percentile of the Annual Survey of Hours and Earnings (ASHE) rather than the previous 25th percentile.
Impact on Employers: Higher Salary Requirements for Sponsorship
As a result, many businesses in different sectors now need to offer above-average salaries to secure Skilled Worker visa sponsorship. This change has led to some companies adjusting salaries upwards to retain sponsored workers and continue attracting international talent. However, these salary adjustments could potentially create issues related to equal pay within their workforce.
Equal Pay Concerns: Are Employers at Risk?
One of the key challenges arising from these salary threshold increases is the potential for equal pay disputes. If a business decides to pay a sponsored worker more than a UK resident worker for the same role simply to meet the new Skilled Worker visa salary requirements, it could open the door to equal pay claims by resident workers under UK law.
What Does UK Law Say About Equal Pay?
The UK’s equal pay laws are governed by the Equality Act 2010. These laws primarily address pay differences that arise due to gender, requiring that men and women performing equal work receive equal pay. Equal work can be defined in three ways:
- Like Work: The roles are practically the same.
- Work Rated as Equivalent: The jobs have been rated as equivalent in a job evaluation study.
- Work of Equal Value: The roles require similar levels of effort, skill, and decision-making.
If a pay disparity exists between a man and a woman performing the same role, an employment tribunal will consider these factors to determine if the work is equal and whether a pay discrepancy is justified.
What Does the Increased Salary Threshold Mean for Equal Pay?
With the higher salary thresholds, employers may feel pressured to increase salaries for Skilled Worker visa holders while keeping the salaries of resident workers at current levels. This could, theoretically, create pay disparities within the organisation. However, for an equal pay claim to succeed, a claimant would need to prove that a pay discrepancy exists and that it is based on gender—a challenging task when the pay rise is due to visa requirements.
Even if a claimant can establish a pay disparity, employers have a potential defence: the ‘material factor defence’. Employers can argue that the pay difference is due to a legitimate aim, such as retaining sponsored employees whose departure could negatively impact the business.
How Could a Labour Government Change the Dynamics?
With a new Labour government in power, changes to employment law, including the expansion of equal pay protections, could affect how these salary threshold increases are interpreted. The Labour government has indicated plans to extend equal pay protections to include race-based claims, aligning them more closely with gender-based claims.
If implemented, this could make the interaction between the Skilled Worker visa salary requirements and equal pay law more complex. Employers may face claims from resident workers alleging race discrimination if they increase salaries for overseas workers but not for resident employees. However, proving such a claim would be difficult, given the diverse makeup of the settled workforce.
The Cost of Equal Pay Claims for Employers
Regardless of the legal merits, defending against equal pay claims can be costly and time-consuming for employers. As the salary threshold changes remain in place, more such claims could emerge, leading to a challenging environment for businesses that sponsor skilled workers. To mitigate risks, employers may need to balance the costs of raising salaries for all employees with the risks of not offering competitive pay to sponsored workers.
How Our Leading London Law Firm Can Help
Navigating the complexities of Skilled Worker visa sponsorship and equal pay laws requires expert guidance. Our specialist immigration solicitors and expert immigration team are here to provide strategic advice, ensuring your business remains compliant while retaining top international talent. For assistance with Skilled Worker visa applications, contact our leading London law firm today.
FAQs
1. What is the current salary threshold for a Skilled Worker visa in the UK?
As of April 2024, the general salary threshold for a Skilled Worker visa in the UK is £38,700. This increase applies to most applicants, with additional concessions for new entrants and those holding PhDs.
2. Can an employer pay a sponsored worker more than a UK resident worker?
Yes, an employer can pay a sponsored worker more if necessary to meet the salary threshold for a Skilled Worker visa. However, this could potentially lead to equal pay claims if the pay disparity cannot be justified.
3. What is equal pay under the Equality Act 2010?
The Equality Act 2010 requires that men and women receive equal pay for equal work. Equal work includes roles that are the same, rated as equivalent, or of equal value. Claims can be made if a pay difference is based on gender.
4. How might a Labour government change equal pay laws?
The Labour government has proposed expanding equal pay protections to include race-based claims, which would align the laws for gender and race pay disparity claims. This could affect employers’ obligations when adjusting salaries for sponsored workers.
5. How can employers defend against equal pay claims?
Employers can use the ‘material factor defence’ to justify pay differences, such as arguing that the disparity is a necessary response to business needs, like retaining key sponsored workers.
For tailored advice on the Skilled Worker visa and equal pay matters, reach out to our specialist immigration solicitors today. Let our expert immigration team help you navigate the complexities of the UK’s immigration system.