This article was updated in May 2023.
April 2023 saw significant changes to the minimum rates of pay for employees sponsored under a Skilled Worker sponsor licence. These changes come in the same month that the National Living Wage and National Minimum Wage go up.
We have updated this blog as more detail emerged, with the most recent update on 11 May 2023.
If you run a sponsor licence and sponsor workers, it is important to keep on top of these changes to avoid breaching your sponsor licence duties. And of course, the National Minimum Wage increases apply to all employees, whether or not they are sponsored.
The pre-April 2023 position
There are various minimum pay rates which you must adhere to if sponsoring workers under a Skilled Worker sponsor licence. You must pay the ‘going rate’ according to the job code under which you are sponsoring someone, as set out in Appendix Skilled Occupations.
There is also a general salary threshold which holds good for up to 48 hours per week. Pre-April 2023 this was set to £25,600 for an ‘experienced worker’ or £20,480 if a reduction applied, such as if the job was on the Shortage Occupation List, or if the applicant qualified as a New Entrant.
There was also a minimum hourly rate to adhere to: pre-April 2023 set to £10.10.
The National Living Wage, pre-April 2023, for people over the age of 23 was £9.50. The £10.10 minimum rate for sponsorship would therefore always take precedence over the National Living Wage.
Post-April 2023 changes
The revised minimum rates of pay relating to sponsorship took place in the same month that the National Living and Minimum Wage increase.
The National Living Wage increased considerably, to £10.42 (and to £10.18 for 21- to 22-year-olds, and £7.49 for 18-20 year olds). However, the National Living Wage is eclipsed by the new minimum hourly rate, for sponsored workers, as explained below.
Changes to the going rate
But first the going rate. The going rates went up for some jobs and down for others. To give a few examples: chefs went down from £9.32 to £8.77, whilst sales managers went up from £17.46 to £18.00 per hour. Make sure you check the latest going rate before sponsoring someone.
Changes to the general salary threshold
The general salary threshold increased from £25,600 to £26,200 for an experienced worker. If your worker is a ‘new entrant’, if the job is on the shortage occupation list, or in certain other scenarios, then the new threshold is £20,960, up from £20,480.
Changes to the minimum hourly rate
The general salary threshold can in principle apply for work of up to 48 hours per week. However, in practice, it seems you could not sponsor an experienced worker on a 48-hour week at £26,200, as you would not meet the new minimum hourly rate of £10.75 (up from £10.10). Note that the new £10.75 hourly rate is more than the new National Living Wage of £10.42.
The new £10.75 rate applies to a certificate of sponsorship assigned on or after 12 April 2023. Therefore, a certificate assigned prior to this date would not necessarily need to meet the £10.75 threshold, but the (revised) National Living Wage rate of £10.42 will apply in all cases (at least for those aged 23 and over).
Ensuring you pay the correct minimum rates of pay is essential to staying on the right side of the Home Office.
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