Migration Advisory Committee recommends sweeping changes to Shortage Occupation List

Although at first glance these recommendations appear radical, the Migration Advisory Committee (MAC) has identified that the role of the Shortage Occupation List (SOL) has significantly diminished under the Skilled Worker (SW) route in comparison with the pre-Brexit Tier 2 (General) route.

SOL occupations were exempt from resident labour market testing (RLMT) requirement applicable to Tier 2 (General), saving sponsors effort and time on recruitment exercises that would likely be fruitless. Under the SW route, there is no formal RLMT necessary.

In its current form, the SOL may be used to pay overseas workers in shortage occupations less than the going rate in the UK labour market, and this can result in unjustifiable salary undercutting and exploitation of overseas workers. The MACs view is that the SOL is no longer fit for purpose, and that whether, and how, immigration policy should be used to address skills shortages should be considered afresh, possibly in conjunction with other bodies competent to examine labour market issues.

What has the MAC recommended?

The MAC has considered that only a small number of low-wage occupations should be included on the UK-wide or Scotland SOL following its review, if the Government chooses not to abolish the SOLs entirely. These are occupations where the going rate is lower than the general SW threshold of £26,200.

The MAC prefers entire abolition of the SOL, since giving low-wage occupations access to the SW route carries the following risks:

• Exploitation of migrant workers due to their immigration status being tied to their employer, making them vulnerable to unacceptable working conditions;
• The presence of low-wage workers (especially those accompanied by family members) resulting in a net fiscal cost to the UK;
• Lack of use in practice, due to the administrative burdens and application fees being too high for low-wage employers to shoulder.

Although not specifically mentioned by the MAC, the risk of impoverishment is also higher for low-wage sponsored workers, for example where a sponsor requires them to repay immigration-related costs.

The MAC has made a total of 13 recommendations across six themes.

UK-wide Shortage Occupation List

The following UK-wide SOL has been recommended for implementation as soon as possible:

Scotland-only Shortage Occupation List

The following occupations are recommended for a Scotland-only SOL. No occupations are recommended for a Northern Ireland-only or Wales-only SOL.

Reclassification requests

The MAC has recommended that sommeliers are reclassified within their existing SOC Code, 9273 (Waiters and waitresses) as an RQF 3+ role, provided the individual has three or more years’ full-time experience in the role. This would allow sommeliers to be sponsored under the SW route. This role is not recommended for inclusion on the SOL, and the MAC has warned employers against using this addition to sponsor waiters and waitresses.

A request to enable ceiling fixers (SOC code 8149, Construction operatives n.e.c.) has been refused due to insufficient evidence being provided by stakeholders on the training requirements for this role.

SOC2020 equivalent recommendations

The current SOL review is based on the 2010 version of the Standard Occupation Classification (SOC) for the UK. This is because of unresolved data issues with the 2020 version of the SOC.

To assist the Home Office to recalibrate the SOL once it is able to adopt SOC2020, the MAC has set out which SOC2020 codes it considers to be equivalent to the SOC2010 codes recommended for inclusion on the SOL.

Recommendations for the role of the SOL in the immigration system

Three recommendations are made in this area:

• To remove the SOL going rate discount (currently set at 80% of the going rate for the occupation) and to make all occupations ineligible for the SOL if they are on a national pay scale, or where the going rate is above the general salary threshold for the SW route;
• To allow asylum seekers who have the right to work to be able to work in any occupation, rather than them only being able to undertake roles on the SOL; and
• To update the sponsorship requirements for the Creative Worker route, to:
  
  • Remove reference to the SOL;
  • Remove the resident labour market testing requirement;
  • Allow any SW route occupation to be eligible for sponsorship; and
  • Add a minimum salary threshold for the route.

Recommendations for future Shortage Occupation List reviews

Five recommendations are made in this area:

• If the Government is against allowing employers to pay below the SW general salary threshold, the SOL should either be abolished or heavily reformed;
• If the Government wishes to retain the SOLs in their current form, the MAC would propose to conduct a minor review in Spring 2024 unless otherwise directed;
• If the SOL remains in place, that the name is changed to ‘Immigration Salary Discount List’ to accurately describe its function;
• For the MAC not to consider RQF Level 1-2 occupations in minor SOL reviews, unless the Government confirms an alternative approach; and
• For the Government to confirm by the end of January 2024 that it will move to SOC2020 and for the occupation-based salary thresholds for the SW route to be updated in the Spring 2024 Immigration Rule changes. The MAC recommends suspending SOL reviews until these changes have been made.

What impact would these recommendations have in practice?

The impact of the recommendations will depend on the extent to which they are adopted by the Government, but some possible factors are discussed below.

Higher salary and application fee costs for sponsoring Skilled Workers

If the Government implements the reduced scope of the SOL without abolishing the list entirely, sponsors will generally be expected to pay a higher salary and application fees to sponsor workers under SW-eligible occupations. Sponsors of workers in occupations remaining on the SOL may in some cases be allowed to benefit from the lower general salary threshold of £20,960 that applies to shortage occupations, unless the going rate or hourly rate calculation is higher than this.

If the list is abolished altogether, the current discount on the general salary threshold for shortage occupations will be removed, meaning that unless a discounted salary option otherwise applies, sponsors will need to pay at least the going rate for the occupation, £10.75 per hour or £26,200, whichever is highest.

Review of salary rate discounting across Skilled Worker route tradeable points options

It is also possible the Government will review the logic for discounting salary rates for other SW tradeable points options, as these also currently undercut prevailing going rates.

There may be a justification for discounting salary under the new entrant option, as SW going rate thresholds reflect are set at the lowest quarter of the salary bands for the relevant occupations, and new entrants may receive lower than this in the market due to their lack of experience.

Immigration Skills Charge exemptions

The Government may see fit to review the justifications for exempting certain occupations from paying the Immigration Skills Charge.

Removal of reference to Shortage Occupation List in Creative Worker category

The Creative Worker category currently exempts sponsors of creative workers in SOL occupations from the requirement to be satisfied they will not be displacing a suitable settled worker by recruiting a migrant worker. Removal of this requirement would lift an administrative burden from sponsors which the MAC does not feel is effective in protecting the resident labour market and would be more in line with the abolition of RLMT under the SW route.

Work rights for asylum seekers

It would seem unlikely that the Government will accept the recommendation to allow asylum seekers with work rights to carry out any job rather than shortage occupations only, as this might be seen as a factor encouraging irregular migration. We anticipate some form of occupational restriction will remain in place for this group.

What are the next steps?

The Home Office will now consider the report and publish its response. Changes to the Immigration Rules implementing the Government’s position will then follow, most likely in the regular Spring updates to the Rules in 2024.

If you are an employer with questions about the report, please get in touch with a member of our Immigration Team. You may also wish to consider signing up for our next Immigration Law Academy, which is being held on 15 and 16 November 2023.