Autumn Budget 2021: The Impact on Employment and Immigration

The autumn 2021 budget highlights changes in both employment and immigration sectors. We shall discuss these changes below. 

Employment 

While this budget did not include any significant changes to employment law, there are some key changes to note.  

National living wage 

The national living wage is the lowest hourly amount that an individual aged 23 or over can be paid. The lower national minimum wages applies to employees under the age of 23 and apprentices. From 1 April 2022, these rates shall increase to:

• £9.50 per hour for those over the aged 23 or over
• £9.18 per hour for those aged 21 to 22
• £6.83 per hour for those aged 18 – 20 
• £4.81 for those under the age of 18 and apprentices 

With less than six months before the changes come into effect, employers should begin to consider the financial implications of these increases and ensure compliance with this change. Should employers fail to pay the correct minimum wage, they may face an employment tribunal claim from any affected employee(s). 

Health and social care levy 

As a result of the government’s increased spending and borrowing due to Covid-19, a new Health and Social Care levy has been introduced to increase the amount of tax each employee pays with the levy going to support the NHS and social care bodies. The levy will increase national insurance contributions by a 1.25% from April 2022 which shall be replaced by a new payment, separate to national insurance, of 1.25% in April 2023. 

This increase in tax will leave employers facing an increase in costs and employees with a lower take home salary. As a result, employers may receive questions regarding the benefits they provide and flexible working options. Therefore, employers should review their existing work arrangements and benefits packages to assess if they are fit for purpose, should employees request remote/flexible working. 

Immigration 

The Autumn 2021 budget confirms that the government are continuing with their plans to reform the UK’s immigration system to focus on attracting highly skilled workers to the UK. 

Scale-up visa 

With 49% of the UK’s fastest-growing businesses having at least one foreign-born co-founder and approximately 40% of all fintech employees in the UK being from overseas, the budget recognised the need for innovative businesses to have access to the talented and skilled individuals they need for their business to succeed. As a result, to attract highly skilled individuals and support inward investment, the Scale-up, will launch in the spring of 2022. In order to be eligible to apply for a scale-up visa, individuals must:

• Pass the English proficiency requirement
• Have a high-skilled job offer from an eligible business
• Have been offered a salary of at least £33,000. 

Global Talent Network 

One launched, the Global Talent Network, will proactively find and bring highly skilled people to the UK who specialise in key science and technology industries. Through working with businesses and research institutions, the network will identify the skills needed in the UK and source talent from overseas to provide these skills. Initially, the network shall focus on the Bay Area and Boston in the US and Bengaluru in India. 

High Potential Individual Route 

The High Potential Individual Route will be open to individuals who have graduated from a ‘top global university’ to come to the UK. While the government has yet to confirm the institutions that will be considered a ‘top global university’, and whether the route is for certain sectors only, it has clarified that eligible individuals will not require a job offer or sponsorship from a registered employer. This route may provide a path to permanent settlement in the UK. 

Global Business Mobility Route

Appearing to combine the Intra-Company Route and the Representative of an Overseas Business route, this route is aimed at businesses with no UK presence who would like to establish themselves in the UK. Via this route, businesses will be able to:

• Send multiple workers to the UK
• Second workers abroad to a UK business with whom they have a high value contract of investment
• Send employees and graduate trainees to the UK entity of an overseas company. 

Much like the current skilled worker visa, it is anticipated that this route will require employees to be monitored by the Sponsor Management System. 

How we can assist

Should you have an immigration or employment law query please contact a member of our team via email at contact@davenportsolicitors.com or telephone via 02079036888.

The material contained on this website contains general information only and does not constitute legal or other professional advice and should not be relied upon as such. While every care has been taken in the preparation of the information on this site, readers are advised to seek specific legal advice in relation to any decision or course of action.