Does the shortage-occupation list make a difference in construction?

Gary McIndoe is managing partner at Latitude Law

Since the UK left the EU, restrictions on employing overseas workers have been lifted in an effort to allow businesses to access the skilled staff they need. A cap on numbers was lifted, and the requirement for resident labour market testing was also removed. Most importantly in the sector, the minimum skill and qualification levels were lowered, from RQF6 to RQF3. This has, since 2020, enabled sponsorship across all the main building trades, from carpenters to bricklayers, electricians to roofers, plumbers to dryliners.

“The government has recently announced that visa application fees will be increased by 15 per cent later in 2023 and the surcharge will rise”

Other practical barriers to sponsorship that may have existed a few years ago have also receded – most notably, the minimum salary requirement, which at its current rate of £26,200 is within industry norms for the majority of trades. This, however, must be balanced against the relatively high cost of setting your business up for sponsorship via the licensing process, and then the cost of individual certificates of sponsorship, attendant visa fees, immigration skills and health surcharges.

The bottom line for most firms, however, is the need to recruit from a limited pool to fulfil contracts. For many, this means considering sponsoring overseas workers; an increasing number of construction companies are getting licensed in order to access wider talent pools in Europe and beyond.

In recent immigration rule changes announced in July, the government has made further changes that offer a saving on application fees, by adding a number of trades to the shortage-occupation list (SOL). This list is reviewed regularly and is updated following recommendations from the Migration Advisory Committee. Roles listed on the SOL are suitable for sponsorship under the Skilled Worker route, with certain advantages attached to such sponsorship.

Since 7 August 2023, the following trades are considered shortage occupations:

  • Bricklayers and masons
  • Roofers, tilers and slaters
  • Plasterers
  • ‘Construction and building trades not elsewhere classified’

These additions add a raft of trades to the shortage list. Note, however, that some roles are excluded, as they are “elsewhere classified”, such as plumbers and electricians, who must continue to go down the standard sponsorship route.

How does the SOL make a difference?

The difference used to be massive, as it removed the requirement for resident labour-market testing. Now that has gone across the sponsorship board, is a shortage occupation really that much easier to sponsor?

Once a suitable role and worker has been identified, businesses will need to consider their salary, which must comply with immigration rules. For most skilled workers, a general minimum or threshold salary of £26,200 per annum or £13.44 per hour is required, unless the role identified has a ‘going rate’ higher than the threshold, in which case the higher going rate will apply. The going rate varies depending on the role identified for sponsorship.

For jobs on the SOL, a lower minimum salary applies. For these roles, the general salary threshold is just £20,960 per year or £10.75 per hour. If the job has a higher going rate, only 80 per cent of the going rate must be paid.

Applying the above to bricklayers under Standard Occupation Code 5312, the going rate of £23,200 is below the general threshold of £26,200 to begin with, which meant that £26,200 was the salary required for sponsorship. As a shortage occupation, the general threshold reduces to £20,960 or 80 per cent of the going rate (so 80 per cent of £23,200, which is £18,560, lower than the general threshold), so a £20,960 minimum applies.

In addition to benefitting from lower salary thresholds, those being sponsored to undertake a shortage-occupation role pay lower visa application fees to the Home Office. Fees are currently £479 for sponsorship up to three years and £943 for sponsorship exceeding three years. Compare this to roles that are not contained on the SOL: fees of £719 and £1,423 respectively are payable. All applicants must also pay an immigration health surcharge. Regardless of whether the role is a shortage occupation or not, employers will also likely need to pay an immigration skills charge, unless the worker can benefit from an exemption. These fees add up quickly.

It should be noted that the government has recently announced that visa application fees will be increased by 15 per cent later in 2023 and the surcharge will rise from £624 to £1,035 per year of sponsorship for adults. So fees are high and are set to rise further.

One benefit exists: businesses may recruit skilled workers sponsored by another organisation to undertake a shortage-occupation role on a part-time basis (up to 20 hours per week) to undertake supplementary employment alongside their main sponsored role, without the need to offer sponsorship themselves.

Sponsorship is not a cheap or easy fix to staffing problems. It is, however, a useful tool in the armoury of construction businesses grappling with recruitment and retention issues.

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